Kirby McInerney is committed to protecting shareholder rights and investments through shareholder derivative litigation – actions brought on behalf of the company to remedy wrongs inflicted by the company’s officers and directors. When management fails to take the steps necessary to protect the interests of the company and its shareholders through mismanagement, wasting of corporate assets, or self-dealing, shareholders have a right to hold officers and directors liable for violations of the duties of care and loyalty.
In these cases, shareholders often do not seek monetary damages, but rather seek to protect their long term investment in the company by imposing corporate governance and management reforms which ensure that corporate structures, internal controls, and policies are consistent with the law and best practice. The goal of such litigation is to preserve corporate assets, improve transparency, and restore accountability.
Corporate misconduct harms not only shareholders, but also the financial markets by driving down stock prices, decreasing shareholder value, and creating mistrust among investors. At Kirby McInerney, our shareholder derivative litigation practice seeks to protect and enhance the rights of shareholders by holding boards of directors and executive officers accountable for their actions, inspiring investor confidence in the financial markets and protecting companies and shareholders from further harm.
KM has a long history of activity in the corporate governance arena. In 1988, the Firm was responsible for a substantial recovery for shareholders in connection with the Kohlberg Kravis Roberts & Co. takeover of RJR Nabisco that inspired “Barbarians at the Gate.” In that case, KM established that investment bankers advising target boards have duties running directly to target shareholders. In 2003, Hollinger's principal shareholder, Tweedy Browne, engaged KM to eliminate what was referred to as the Black Discount, which required the removal of Hollinger's CEO, Conrad Black. KM set in motion a series of sophisticated, little-employed legal tactics which ultimately led to the ousting of Mr. Black, resulting in Hollinger's stock price doubling and an increase of more than $100 in Tweedy's holdings.
Representative of KM’s recent work is the Firm’s representation of lead plaintiff Skandia Life Insurance Co. Ltd. in In re Pfizer Inc. Securities Litigation, a shareholder derivative action targeting the Board of Directors and senior executives of Pfizer Inc., shortly after the company agreed to pay $2.3 billion in criminal and civil fines related to off-label promotion of certain drugs. Plaintiffs alleged that Pfizer’s senior management and Board breached their fiduciary duties by, among other things, allowing unlawful promotion of drugs to continue even after receiving numerous “red flags” that Pfizer’s improper drug marketing was systemic and widespread. Through KM’s efforts, the Pfizer directors agreed to a $75 million settlement that included the restructuring of the drugmaker’s compliance program and pay structure.
Merger & Acquisition Investigations
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