Corporate Governance Law Firm Headquartered in New York City

Justin has had experience forged from practicing at one of the leading large law firms around the globe, Gibson, Dunn & Crutcher LLP, which defends businesses and individuals in bet-the-company litigation concerning corporate governance, derivative litigation, fiduciary duties, mergers and acquisitions, partnership rights, and other types of issues affecting shareholder rights. For example, Justin played a role in representing defendants in Garofalo, et al. v. Revlon, Inc., et al. (D. Del.). And Justin had a role on the trial team in iBasis Inc.’s lawsuit against Koninklijke KPN NV in connection with an alleged inadequate tender offer, which was settled during trial in 2009 before the Delaware Court of Chancery.

Justin’s understanding of accounting, business, corporate strategy, economics, and finance equips him with a lens that separates him from the pack. He brings this understanding to bear in representing plaintiffs or defendants. Demonstrating Justin’s passion for entrepreneurship, he has launched and managed businesses and investment vehicles. These experiences have heavily influenced Justin to represent entities or investors as plaintiffs or defendants and have equipped him with a perspective that many clients have appreciated and admired. His ability to decipher business operations, financial information, and elaborate securities disclosures and filings have enabled him to possess savviness in dealing with experts, economists, and accountants. He is able to distill complicated facts into captivating stories in advocating before judges, juries, arbitrators, mediators, and adversaries.

This rare experience on both sides—representing plaintiffs and defendants—arms the Firm with the tools to represent you, whether you have been a victim of fraud or other types of wrongdoing, want to blow the whistle, or otherwise confidentially report unlawful behavior to regulators, or are facing a lawsuit, investigation, or arbitration.

Here, you will find a wealth of information about the laws addressing corporate governance, fiduciary duties, and mergers and acquisitions litigation and answers to commonly asked questions.

A shareholder derivative action is a lawsuit brought by a shareholder of a company on behalf of and for the benefit of the company itself against the directors or officers of the company. In a derivative action, shareholders “step into the shoes” of the directors and officers of a company and bring litigation that the board of directors would be unwilling to pursue on their own—for example, when the board members are alleged to have participated in the misconduct themselves. A shareholder in a derivative action must typically demonstrate that a litigation demand on the board of directors was wrongfully refused or that making a pre-suit litigation demand would have been futile because of the board members’ self-interest.

Shareholder derivative litigation can recover damages back to the company for financial or reputational harm caused by the alleged unlawful conduct. Such litigation can be used to improve the governance of companies to guard against future harms. The objectives are to recover monetary damages or other consideration from responsible corporate actors—or their director and officer liability insurance policies—for the company’s benefit and to effectuate corporate governance improvements and reforms. The company and its shareholders benefit: the company has funds returned to its coffers, and the shareholders experience better corporate governance.

Any company shareholder can serve as a representative plaintiff in a shareholder derivative action, as long as the shareholder (i) held stock in the company continuously at least from the period when the alleged wrongful conduct began and (ii) continued to hold at least one share through the litigation’s conclusion.

Shareholder derivative actions generally arise from state corporation laws and are often brought in state courts; nevertheless, shareholder derivative actions can be brought in federal court. Many corporations are incorporated in Delaware, so Delaware state law often serves as a model for other state laws.

Companies’ directors and officers owe fiduciary duties to the corporations and shareholders whom they serve. Directors and officers must adhere to requirements established under the corporation’s formation documents—for example, the articles of incorporation and bylaws—and other controlling documents. They must meet obligations imposed by federal and state laws, and they must not engage in the following types of actions: corporate waste of assets; improper use of defensive measures and deal protections for management’s benefits; mergers, acquisitions, and going-private transactions that violate fair process or fair price; misappropriation of corporate assets; lack of independence; self-dealing; insider trading; stock-options backdating; and other types of breaches of fiduciary duties. Directors and officers’ fiduciary duties owed to corporations and shareholders often boil down to the three categories of a duty of loyalty, care, and good faith.

• Duty of Loyalty: Directors and officers owe a fiduciary duty of loyalty to the corporation and its shareholders whom they serve. In essence, directors and officers cannot use their positions of trust and confidence to further their private interests to the detriment of the corporation and shareholders.
• Duty of Care: Directors and officers owe a fiduciary duty of care to the corporation and its shareholders whom they serve. This fiduciary duty requires that directors and officers exercise the amount of care that ordinarily careful and prudent people would use in similar circumstances.
• Duty of Good Faith: Directors and officers owe a fiduciary duty of good faith to the corporation and its shareholders whom they serve. They must act with a genuine attempt to advance corporate welfare and act in its best interests with honesty, fairness, and good faith regarding all activities, such as decision-making functions and oversight of operations.

Shareholder derivative actions often arise when a corporation engages in or is facing a merger or acquisition. These transactions are crucial to a corporation’s operations; indeed, they can be the cessation of the business and shareholders’ rights. Directors and officers can be alleged to violate their fiduciary duties owed to the corporation and the shareholders whom they serve through, for example, insufficiently disclosing or otherwise addressing a bias or self-interest that they have in the transaction, failing to engage in sufficient due diligence for the transaction, failing to maximize shareholder value, failing to properly evaluate the transaction, proposing an unfair transaction, or insufficiently disclosing material information about the transaction to shareholders.

Individuals, businesses, asset managers, financial institutions, government entities, and public or private institutional investors constantly lose out on valuable claims, whether through missed litigation opportunities or even failing to submit a claim form to participate in settlements. We are here to help. The Firm has a streamlined, efficient system to monitor your rights to claims. A claimant’s decision about whether to pursue a class action, mass action, multi-district litigation, individual action, arbitration, or even just submit a claim raises complex questions. Some of them include whether unlawful activity occurred, what are the extent of damages, what are the claimant’s damages and potential recovery, and what course of action will maximize recovery. We implement a methodical, client-specific approach to provide counsel that is based on thorough analysis and strategic recommendations.

Our monitoring system oversees domestic and international markets, business news services, breaking news of corporate developments, and filed class actions and related litigation. Clients and potential clients’ potential damages are estimated. We analyze potential claims, defenses, and the probability of recovery. Then, we present case evaluations to the client or potential client’s decision-makers when damages meet the client or potential client’s threshold and other criteria. We advise clients or potential clients on whether to participate in a class action, file a claim, opt out and file an individual action, or not pursue litigation. And we track settled class actions to help clients and potential clients collect on their claims.

For institutional investors—public or private pension funds, Taft Hartley funds, sovereign funds, mutual funds, hedge funds, endowments, family offices, asset managers, or other types of investment funds—and individual investors, we provide free, confidential, sophisticated, and individualized portfolio monitoring services and tools. Our personalized approach to portfolio monitoring identifies potential recoverable losses. By keeping our clients informed of their rights and recoverable losses, we enable them to be proactive in assessing their strategies and remedies, whether it be to file a class action, move for lead plaintiff, file an individual action or arbitration, or just being an unnamed class member and file a proof of claim out of any recovery. We are dedicated to the rights of our shareholder clients, many of them being guardians of their beneficiaries’ retirement funds. We welcome any questions about our free monitoring services and tools.

Our role is not only to protect your business. We strive to enable it. Possessing the unique blend of prior experience in representing plaintiffs and defendants equips us to craft compliance programs for effectiveness, efficiency, and innovation. Businesses and financial institutions often learn that having an effective, efficient, and innovative legal-monitoring system in place regularly leads to compliance and avoiding legal actions. We provide streamlined, robust, and outsourced monitoring solutions that dramatically cut legal costs. And the Firm provides a lower-cost solution for reviewing documents and data that must be produced during litigation.

By understanding our clients’ business rationale and ultimate objectives, we are able to identify and implement solutions that avoid prohibited behavior and mitigate risk from impermissible conduct. We strive to present practicable and workable advice with honest recommendations and frank assessments of risks and rewards of actions. Compliance programs can entail the following, without limitation: policy development, employee education and training, monitoring and detection, program design and implementation, program evaluation and modification, and risk assessment.

• Garofalo, et al. v. Revlon, Inc., et al. (D. Del.)
• iBasis Inc. v. Koninklijke KPN NV (Del. Ch.)

• Practicing Law Institute, Securities Litigation, A Practitioner’s Guide (Contributor)
• Delaware Business Court Insider, “Lead Plaintiffs’ Shareholdings Draw Chancery Review,” May 22, 2013 (Co-Author)
• Knowledge Group’s Conference, “Latest Trends and Developments in Federal Securities Investigation: What to Expect in 2015 and Beyond,” October 20, 2015 (Speaker and Presenter)

Contact Nematzadeh PLLC by calling (646) 799-6729 or emailing lawyer@nematlawyers.com for a confidential, free consultation. The Firm can align and partner long-term with our clients by formulating creative hybrid legal fees, including contingency fees, success fees, hourly fees, or other types of agreements.