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Sources praise Latham’s “rare combination of size and good, consistent product,” also noting the “‘sophistication’ of the work done by the practice” with “notable strengths in shareholder litigation.”

Chambers Global 2020

Shareholder & Derivative Litigation Defense

Latham & Watkins has one of the leading shareholder derivative litigation defense practices in the nation.

The firm’s deep bench of experienced securities litigation lawyers counsel and defend clients in every aspect of the complex intersection of corporate governance and derivative liability.

By making a formal “demand” on a corporate board or filing a derivative suit claiming that a demand would be futile, shareholders seek to compel a company — public or private — to sue its officers and directors, auditors, partners, subsidiaries and anyone else who allegedly damaged the company.

Derivative litigation often presents complex corporate control and governance issues and potential conflicts. Latham’s securities litigators have extensive experience in counseling clients through the traps and winning or settling cases with a minimum of corporate disruption.

The team handles all stages of derivative litigation, including:

  • “Books and records” pre-suit discovery
  • Advising boards in responding to shareholder demands
  • Guiding internal investigation of allegations
  • Establishing a record of the board’s exercise of sound business judgment
  • Representing special litigation committees
  • Defending the targets of derivative suits, officers, directors and professionals

When shareholders sue, alleging wrongful refusal of a demand or demand futility, Latham’s securities litigators frequently win dismissal on the pleadings, defeating shareholder standing before any discovery is taken. Where appropriate, early stage cashless settlements with no compensatory payment by any corporate or individual defendant are often negotiated.

The team’s extensive experience in derivative disputes has guided clients to successful resolution of derivative claims involving every alleged type of corporate wrongdoing, including alleged fraud, board failure of oversight, breach of fiduciary duty, cross border claims, professional malpractice, restatements, corporate waste, and violation of securities laws and other laws.

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