BFA’s Corporate Governance practice empowers investors to protect their interests and drive meaningful change within public companies. We represent institutional and retail investors—pension funds, retirement systems, and individuals—seeking to enforce fiduciary duties, improve governance, and hold boards and executives accountable.
Enforcing Accountability, Enhancing Value
We believe shareholders deserve transparency and accountability from the companies they invest in, and leverage the full spectrum of legal tools to advance shareholder rights, from statutory books and records requests to derivative and direct litigation. Our attorneys are adept at uncovering critical information and developing innovative legal strategies that address conflicts of interest, excessive compensation, and other governance failures. We focus on cases with the potential for significant impact, whether through monetary recovery or structural reforms.
Deep Experience, Thought Leadership
BFA’s team includes recognized leaders in Delaware corporate law and trial-tested litigators with experience before the Delaware Court of Chancery and Supreme Court. Our attorneys regularly provide educational programs and thought leadership on fiduciary duties, shareholder rights, and the intersection of governance principles with securities law, helping clients navigate an evolving corporate landscape.
Collaborative, Client-First Approach
We work closely with clients to understand their governance philosophies and objectives, ensuring that our strategies align with their broader goals. BFA’s non-hierarchical, team-oriented culture fosters open dialogue and robust deliberation, resulting in pragmatic solutions and superior outcomes.
Driving Lasting Change
Our commitment to integrity and selectivity means we pursue only those cases that can deliver meaningful results for investors and the market. Whether seeking to recover losses or implement governance reforms, BFA is dedicated to achieving lasting solutions that benefit shareholders and the public.
If you wish to learn more about corporate governance or would like to discuss a potential derivative action, please email us at BFACorporateGovernance@bfalaw.com.
Frequently Asked Questions about Corporate Governance Actions
A derivative action is a lawsuit brought by one or more stockholders on behalf of a company to address harm caused to the company—typically by its directors, officers, or controlling stockholders. While a company’s board of directors will typically control litigation on behalf of a company, the directors would have a conflict of interest if they were, for example, being asked to sue themselves. To address this issue, in some circumstances, courts will allow a stockholder to stand in the place of company management, and bring claims on behalf of the company itself.
Derivative actions allow stockholders, including retail investors, to hold corporate leadership accountable when their actions (or inaction) have harmed the company in certain ways. These cases can address alleged misconduct, recover financial losses for the company, and promote long-term corporate integrity and transparency through court-supervised governance reforms.
A Section 220 demand is a formal request under Delaware law (specifically, Title 8, Section 220 of the Delaware General Corporation Law) that a stockholder can make on a Delaware corporation. Section 220 demands allow record holders and beneficial owners of stock in any Delaware corporation to confidentially inspect certain company books and records when they have a legally important reason for doing so. Section 220 demands can be used to investigate potential wrongdoing by the company’s board of directors or to value the stockholder’s stock in the company (among other things).
Investors often use this tool to investigate potential legal claims before filing a lawsuit.
Any current stockholder of a Delaware corporation may submit a Section 220 demand. A legally sufficient Section 220 demand must be submitted with proof of the stockholder’s ownership and it must state a legally sufficient purpose for making the inspection.
Section 220 demands may be submitted by both record holders that hold stock directly in their own name, or beneficial owners who hold the stock in “street name.”
Section 220 applies specifically to Delaware corporations, but investors may still have inspection rights in other types of Delaware entities—for instance, Title 6, Section 18-305 of the Delaware Limited Liability Company Act gives LLC members a default inspection right in records of the LLC.
Section 220 demands provide access to certain formal company records, including minutes of the meetings of the company’s board of directors, annual financial statements, and other specific formal documents. In some circumstances, Section 220 can also allow stockholders to review additional company records when doing so is particularly important to the stockholders’ investigation.
A controlling stockholder is a person or entity that has the power to control what a company does by owning a significant percentage of the company’s stock and having influence over the company’s management. When multiple stockholders work together to exert “control” over a company, that is referred to as a “control group.”
A person might be a controlling stockholder if they own 51% of a company’s stock, and can use their votes to control the election of every member of the board of directors. They could also be a controlling stockholder if they own 33.33% of the company’s stock, but they have a special contract with the company that allows them to handpick the company’s directors.
When a court finds that someone is a controlling stockholder (or is part of a control group), that stockholder owes special duties to the rest of the company’s investors, and typically has to abide by certain rules to avoid abusing their power over the company.
A conflicted transaction occurs when company insiders—such as executives or members of the board of directors—stand to benefit personally from a corporate decision in a way that does not treat the insiders like the rest of the company’s stockholders are being treated.
When insiders use their authority over a company to carry out a conflicted transaction for their own benefit, they may have violated their fiduciary duties.
“Fiduciary Duties” refers to the legal obligation of company directors and officers to act in the best interests of the company and its stockholders. The people who owe fiduciary duties are sometimes called “fiduciaries.”
When a corporation’s directors and officers take actions that prioritize their own interests over the company’s or the stockholders’, they have violated their fiduciary duties. When a director or officer has breached their fiduciary duties, stockholders have a right to sue to remedy the misconduct.
No. Even retail investors with relatively small holdings have the right to bring a derivative lawsuit on behalf of a Delaware corporation, so long as they have held the stock continuously during the relevant period (among other requirements).
If you suspect that a company’s leadership has engaged in misconduct—such as self-dealing, misleading disclosures, or breaches of fiduciary duty—contact BFA at inquiries@bfalaw.com or by using the form here to discuss the case and your options.
BFA is a leading class action law firm recognized for its legal prowess, tenacious advocacy, proven results, and unwavering commitment to integrity. Our approach is defined by transparency, open communication, and an unwavering commitment to ethical advocacy.
At BFA, we choose quality over quantity. Every potential case undergoes a rigorous evaluation focused on legal merit, recovery potential, and alignment with our clients’ long-term interests. This disciplined approach allows us to dedicate substantial resources to each matter, ensuring that every recommendation is made with integrity and with the client’s reputation at the forefront.
BFA’s litigation team has an unparalleled record, having helped secure over $17 billion on behalf of investors and consumers since our founding, including:
- A settlement on behalf of Tesla, Inc. against certain current and former members of Tesla’s Board of Directors, under which the Director Defendants will return to Tesla and forgo certain future compensation valued at $919 million. This is the largest Stockholder derivative settlement in the history of the Delaware Chancery Court.
- A historic $725 million settlement in a consumer privacy class action against Facebook, the largest recovery in a data privacy class action to date.
- A $420 million resolution on behalf of investors in Teva Pharmaceuticals Industries Ltd., one of the five largest securities settlements ever achieved against a pharmaceutical manufacturer.
For more information on BFA, visit the Why BFA page.
Contact BFA at inquiries@bfalaw.com or by using the form here and submit your information. There is no cost to you. We will review your information and determine whether you may be able to bring a claim.
