Reid Collins Defeats Demurrer Seeking to Dismiss $100 Million Breach of Fiduciary Duty Case
On August 7, 2019, Reid Collins defeated a demurrer filed by Levine Leichtman Capital Partners and the former directors and officers of Pacific World Corporation that sought to avoid over $100 million in liability for defendants’ breaches of fiduciary duty. The claims arose in connection with the defendants’ orchestration of an over $200 million dividend recap transaction that lined their own pockets at Pacific World’s expense. In overruling the demurrer, the Court rejected defendants’ arguments that the claims were untimely and that the company lacked standing to pursue its claims under the Bangor Punta doctrine, which denies stockholders the right to seek damages from former directors for corporate mismanagement. Discovery in the case is ongoing.
Prior results do not guarantee a similar outcome.