Facebook Ruling Highlights Risks Of Flawed Board Processes
Law360 (November 10, 2020, 4:51 PM EST) -- In United Food and Commercial Workers Union v. Mark Zuckerberg and Facebook Inc., a stockholder of Facebook brought a suit seeking damages, on behalf of the corporation, for losses Facebook incurred by pursuing and then abandoning a reclassification of its capital structure.
The reclassification had been proposed by, and would have primarily benefited, the company's controlling stockholder, Mark Zuckerberg. The reclassification was later abandoned at Zuckerberg's request.
On Oct. 26, the Delaware Court of Chancery dismissed the suit, holding that, because a majority of the directors were independent and disinterested with respect to the reclassification, the plaintiff was not excused from...
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