Lawyers Employ Rare Legal Vehicle To Deliver Favorable Ruling to Client

     MIAMI—Employing a seldom-used legal vehicle, the KPKB law firm successfully defeated a derivative shareholder lawsuit at very little cost to its client, a major private-equity firm.

     A portfolio company of their client seeking to acquire another synergistic company was sued by a minority shareholder on behalf of all other shareholders, making two major allegations:  that the acquisition improperly diluted her shares and that she was being inappropriately squeezed out under the doctrine of minority shareholder oppression.

     In response KPKB initiated a seldom used legal vehicle, the independent litigation committee, which requires review by a committee of disinterested directors or individuals from the community appointed by a judge to review the allegations of the suit to determine if the maintenance of the suit is in the best interests of the company.

The committee ultimately determined that the lawsuit was not in the best interest of the company.  The court adopted the committee’s recommendation, dismissing the suit with prejudice—a favorable ruling for the KPKB client without the expense of litigation.