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Securities
Breach of Fiduciary Duty
RICO

Brocade Communications Systems, Inc. v. Reyes et al.

Published: Jan. 17, 2009 | Result Date: Dec. 12, 2008 | Filing Date: Jan. 1, 1900 |

Case number: C-05-2233-CRB Bench Decision –  Dismissal

Court

USDC Northern


Attorneys

Plaintiff

Ralph C. Ferrara


Defendant

Michael D. Torpey
(Orrick, Herrington & Sutcliffe LLP)

Anthony A. De Corso

Norman J. Blears
(Sidley Austin LLP)

Mark E. Beck

Robert C. Friese

Douglas R. Young

Richard Marmaro

Jan N. Little

John M. Potter
(Quinn, Emanuel, Urquhart & Sullivan LLP)

Richard M. Phillips

Jeffrey B. Rudman

Eric A. Gressler


Facts

Plaintiff Brocade Communications Systems filed suit against certain of its former directors, officers and employees, Gregory Reyes (former CEO), Antonio Canova (former CFO), Neal Dempsey (former director), Seth Neiman (former director), Robert Bossi (former Controller), Michael Byrd (former CFO), Mark Leslie (former director), Paul Bonderson (founder and former officer), Stephanie Jensen (human resources chief), and Jack Cuthbert (former officer).

Contentions

PLAINTIFF'S CONTENTIONS:
Brocade contended that it is entitled to damages stemming from a backdating scandal perpetrated by the defendants.

DEFENDANTS' CONTENTIONS:
The defendants moved to dismiss all claims based on statutes of limitations and failure to state a claim.

Result

The court upheld the fiduciary-duty claims asserted against four of the 10 defendants (Reyes, Canova, Dempsey, and Neiman) and the aiding/abetting claim against another defendant (Bossi), but dismissed claims under RICO and the federal securities laws. The court dismissed all claims against the other five defendants (Byrd, Leslie, Bonderson, Cuthbert, and Jensen) based on statutes of limitations.


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