Foley Achieves Dismissal of Suit Challenging Emergent Capital’s Groundbreaking Minimum-Support-To-Sue Bylaw
16 October 2015
Foley & Lardner LLP is pleased to announce that its client, Emergent Capital, Inc. has secured the dismissal with prejudice of a shareholder lawsuit challenging Emergent’s minimum-support-to-sue bylaw, believed to be the first of its kind in the country. The bylaw, proposed by Emergent Chairman of the Board Phillip Goldstein and approved both by Emergent’s Board and by shareholders, requires a shareholder to obtain the consent of holders of at least 3% of Emergent’s outstanding shares before suing the company or its officers or directors on behalf of other shareholders in a class action or on behalf of the company in a derivative action.
The lead plaintiff had sued Emergent and its directors in Florida state court and in federal court in the U. S. District Court for the Southern District of Florida, seeking to have the minimum-support-to-sue bylaw struck down, among other claims.
Not only were all claims dismissed with prejudice, but the lead plaintiff made a public statement that the defendants “acted in good faith and did not engage in any improper behavior in adopting the bylaw at issue or otherwise.”
Emergent Chairman Phillip Goldstein said, “obviously we are very pleased with the result Foley obtained in this case,“ adding that “ there has been a disturbing trend of lawyer-driven knee-jerk strike suits against directors and officers of public companies, and we strongly believe this is a very good bylaw that deters such suits without unduly impeding meritorious representative lawsuits.” Goldstein noted that, “the bylaw does not prohibit a shareholder from filing a direct claim on his or her own behalf; it simply requires a shareholder who claims to represent the company or other shareholders to demonstrate that at least some other shareholders support such a lawsuit before significant costs are imposed on the company.”
Foley litigation partner Mike Matthews stated that, “we were honored to defend the first case nationwide to challenge a minimum-support-to-sue bylaw, and we commend Phillip Goldstein and Emergent’s Board of Directors for having the foresight and fortitude to take decisive action to protect shareholder value.“ In addition to Mr. Matthews, the Foley team included Michael Kirwan, Gardner Davis, and Larry Dougherty.
The court’s dismissal order is available here. The lead plaintiff’s and Emergent’s statements regarding the dismissal of the lawsuit are available here and here.
The lead plaintiff had sued Emergent and its directors in Florida state court and in federal court in the U. S. District Court for the Southern District of Florida, seeking to have the minimum-support-to-sue bylaw struck down, among other claims.
Not only were all claims dismissed with prejudice, but the lead plaintiff made a public statement that the defendants “acted in good faith and did not engage in any improper behavior in adopting the bylaw at issue or otherwise.”
Emergent Chairman Phillip Goldstein said, “obviously we are very pleased with the result Foley obtained in this case,“ adding that “ there has been a disturbing trend of lawyer-driven knee-jerk strike suits against directors and officers of public companies, and we strongly believe this is a very good bylaw that deters such suits without unduly impeding meritorious representative lawsuits.” Goldstein noted that, “the bylaw does not prohibit a shareholder from filing a direct claim on his or her own behalf; it simply requires a shareholder who claims to represent the company or other shareholders to demonstrate that at least some other shareholders support such a lawsuit before significant costs are imposed on the company.”
Foley litigation partner Mike Matthews stated that, “we were honored to defend the first case nationwide to challenge a minimum-support-to-sue bylaw, and we commend Phillip Goldstein and Emergent’s Board of Directors for having the foresight and fortitude to take decisive action to protect shareholder value.“ In addition to Mr. Matthews, the Foley team included Michael Kirwan, Gardner Davis, and Larry Dougherty.
The court’s dismissal order is available here. The lead plaintiff’s and Emergent’s statements regarding the dismissal of the lawsuit are available here and here.
People
Related News
24 April 2024
Press Releases
Nathaniel Lacktman Joins Tampa Bay Wave’s HealthTech|X Accelerator Advisory Council
Foley & Lardner LLP partner Nathaniel “Nate” Lacktman will serve as a member of the Advisory Council for Tampa Bay Wave’s inaugural HealthTech|X Accelerator program, an innovative initiative to support high-potential health technology startups ready to scale in Tampa and beyond.
22 April 2024
Press Releases
Foley Adds IP Partners Ngai Zhang and Drew Schulte, Enhancing Innovative Technology Capabilities
Foley & Lardner LLP announced today that it has bolstered its Innovative Technology Sector and Electronics Practice with the addition of partners Ngai Zhang and Drew Schulte in Washington, D.C. and Miami, respectively.
15 April 2024
Press Releases
Foley Names Andrew Wronski as Manufacturing Sector Chair
Foley & Lardner LLP is pleased to announce that Andrew “Andy” Wronski has been named chair of the firm’s Manufacturing Sector, effective April 15, 2024.