Disputes about how a company is run
Corporate litigation in the narrower sense covers fights over a corporation's internal affairs, such as whether directors met their fiduciary duties, whether a merger or financing was fair to all shareholders, or whether a vote was valid. The law of the state where the company was incorporated generally governs these questions, even if the case is heard elsewhere. That is why a Delaware corporation headquartered in New York may face claims decided under Delaware law, sometimes in the Delaware Court of Chancery. Many charters and bylaws also contain clauses choosing the court for these disputes.
Records and requests that come first
These cases often begin with a demand to inspect books and records, which shareholders can use to investigate before suing. Boards receiving such a demand should respond with counsel, because how the company handles it can shape what follows. Preserve board minutes, materials circulated before meetings, and directors' communications, including personal email and texts used for company business. Directors who disagree with the majority sometimes want separate counsel, and the company's indemnification and advancement provisions, as well as its D&O insurance, should be reviewed early. Responding to a records demand also means deciding what confidentiality protections to require before producing anything.
Setting a course
In a first meeting we identify which state's law applies, where the dispute is likely to be heard, and whether the claims belong to individual shareholders or to the company itself, which affects who may bring them. We also look at what the board did and when, since the process behind a decision often matters as much as the decision in how courts review it. For the company and its directors, the strategy may involve a special committee, a negotiated resolution, or an early motion. For shareholders, it may begin with a records demand rather than a complaint. In closely held companies, these disputes often overlap with employment or buyout disagreements among the owners.
