Venture Capitalists Fall Prey To Fiduciary Suits

Law360, New York (March 22, 2010, 6:26 PM EDT) -- Venture capital firms usually enter a company with an exit plan and a contract to protect themselves from common shareholder lawsuits, but falling valuations in the economic downturn have made venture capitalists targets for breach of fiduciary claims, as two recent cases highlight.

The two cases, filed by shareholders against the directors of Trados Inc. and KOR Electronics Inc., show not only that litigation has resulted from the departure of venture capital investment in companies during the recession, but just what venture capital firms must do...
To view the full article, register now.
Law360 Pro Say Podcast
Check out Law360's new podcast, Pro Say, which offers a weekly recap of both the biggest stories and hidden gems from the world of law.