An extensive body of law has evolved regarding the use of special committees, and Richards Layton has been at the forefront of this emerging area of law from the start. Our lawyers are skilled in addressing the tactical and strategic issues that frequently arise in special committee matters, including the formation of committees, negotiation strategies, and the drafting of transaction documents. We work to mitigate the risks that special committees face and to ensure that committee members satisfy standards of director conduct. By understanding our clients’ goals and concerns, we help them achieve successful business results.
Our lawyers are experienced in advising special committees formed to negotiate transactions where directors may have conflicts of interest, such as certain going-private transactions or financing transactions. In addition, we routinely represent special litigation committees formed in response to stockholder derivative litigation or committees formed to investigate stockholder demands to institute such litigation. Where appropriate, we collaborate fully with company counsel and the committee’s financial advisors to successfully address all facets of these often complex matters.
Conflict Committees
We are well versed in the fiduciary duties of directors and members of special committees, the role and involvement of special committees in connection with potential transactions, and conflict of interest situations. Our numerous conflict committee representations include matters involving acquisitions of assets, potential sale transactions, and conversion of partnership interests. We advise special committees of directors on the complex Delaware corporate law issues and options presented by management buy-out and going-private transactions.
Investigative Committees
Richards Layton has frequently acted as counsel to special committees formed to investigate matters raised in stockholder demands and to recommend appropriate action to the board of directors. For example, we have represented committees of the boards of directors of major corporations formed to investigate those corporations’ historical stock option granting practices and to make recommendations regarding appropriate remedial measures.
We also have represented special committees formed to investigate allegations of securities law violations and illegal insider trading, as well as committees investigating, among other things, allegations of excessive executive compensation, fiduciary self-dealing, stock price manipulation, and other alleged breaches of fiduciary duty.
Special Litigation Committees
Our firm has substantial experience representing special litigation committees formed to address matters involving stockholder derivative claims. Indeed, in 1981 we represented the special litigation committee in the seminal case of Zapata Corp. v. Maldonado, the first case to recognize the availability of the special litigation committee procedure under Delaware law. Since Zapata, we have acted extensively as counsel to special litigation committees, including those chartered to deal with derivative litigation involving corporations.
We have also represented corporate or individual defendants in significant litigation involving special litigation committees in numerous engagements. While many of these matters are confidential, our public representations include Ryan v. Gifford, Perlegos v. Atmel Corp., In re Oracle Corp. Deriv. Litig., and S. Muoio & Co. LLC v. Hallmark Entertainment Investments Co.
We Wrote the Book on Special Committee Practice
Three of our directors wrote Special Committees: Law and Practice, published in 2011 by Oxford University Press. This comprehensive book gives practitioners a thorough working knowledge of special committee law, how to best utilize special committees, and the role of special committee members. Special Committees: Law and Practice is an authoritative reference on this important area of law—and a testament to the depth of knowledge and experience that our firm brings to the practice of special committee law.