On March 3, 2010, Vice Chancellor J. Travis Laster of the Delaware Chancery Court upheld the shareholder derivative complaint alleging over $615 million in insider trading by the Board of Directors of Toll Brothers Inc. (TOL), a large luxury home builder. In upholding the complaint, the Court rejected each of defendants’ arguments, finding that the complaint stated sufficient facts to excuse a pre-suit demand on the Board, that the case was timely filed, and that the insider trading claims were viable. The Court soundly rejected defendants’ arguments that Delaware’s leading insider trading precedent, Brophy v. Cities Service Co., 70 A.2d 5 (Del. Ch. 1949) was outdated and should be overruled.
Schubert Firm Obtains Important Legal Ruling in Toll Bros. Case
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