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Corporations
Shareholder Derivative
Breach of Fiduciary Duty of Loyalty

Milton Pfeiffer v. Bruce E. Toll, Robert I. Toll, Zvi Barzilay, the Estate of Joel H. Rassman, Robert S. Blank, Richard J. Braemer, Paul E. Shapiro and Carl B. Marbach

Published: Dec. 21, 2013 | Result Date: Mar. 15, 2013 | Filing Date: Jan. 1, 1900 |

Case number: 4140-VC Settlement –  $16,250,000

Court

Court of Chancery of the State of Delaware


Attorneys

Plaintiff

Felipe J. Arroyo

Robert C. Schubert
(Schubert, Jonckheer & Kolbe LLP)

Dustin L. Schubert
(Schubert, Jonckheer & Kolbe LLP)

Carmella P. Keener

Ronald A. Marron
(Law Offices of Ronald A. Marron APLC)

Willem F. Jonckheer
(Schubert, Jonckheer & Kolbe LLP)

Kevin Kim

Michael Rosner

Joseph E. Levi

Gregory E. Del Gaizo

Douglas E. Julie


Defendant

Allen M. Terrell

Jonathan D. Martin
(Lewis, Brisbois, Bisgaard & Smith LLP)

Anthony W. Clark

Kimberly LaMaina

A. Gilchrist Sparks

S. Mark Hurd

Christopher Malloy

Michael P. Carroll

Brock E. Czeschin

Edmund Polubinski III
(Davis, Polk & Wardwell LLP)

Ryan D. Stottman


Facts

Milton Pfeiffer, Oliverio Martinez, and William Hall were all shareholders of Toll Brothers, Inc., a Delaware Corporation. They each filed shareholder derivative actions against Robert Toll, Bruce Toll and other Toll Brothers directors alleging that the defendants breached their fiduciary duties of loyalty based on certain sales of Toll Brothers stock.

The actions were later consolidated.

Contentions

PLAINTIFF'S CONTENTIONS:
Plaintiffs asserted claims for breach of fiduciary duty, unjust enrichment, corporate waste, and contribution and indemnification.

DEFENDANT'S CONTENTIONS:
Defendants denied any wrongdoing, or that their wrongdoing caused any harm to Toll Brothers, but decided to settle the matter.

Result

Vice Chancellor Travis E. Laster denied defendants' motions to dismiss and reaffirmed Delaware insider trading law under Brophy v. Cities Service Co., 70 A.2d 5 (Del Ch. 1949). The parties settled for $16,250,000 to be paid to Toll Brothers, including total personal contributions of $6,450,000 by certain of the individual defendants.


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