January 10, 2024

Munger, Tolles & Olson Partner Achyut Phadke Discusses Private Securities Litigation to Watch In 2024

Munger, Tolles & Olson partner Achyut Phadke was quoted in an article titled “Private Securities Litigation To Watch In 2024,” published by Law360.

The article focuses on five closely watched cases and controversies that will be “on the minds of securities litigators” in 2024. Mr. Phadke offered insights, predictions and opinions regarding many of the matters highlighted by Law360.

One of the issues discussed in the article is the enforceability of forum selection clauses, which, if enforced, govern how and where derivative lawsuits can be filed. Ruling in a recent case, the U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of a derivative lawsuit facing GAP Inc. because the company’s bylaws require derivative lawsuits to be filed in Delaware Chancery Court and not in a California federal court. The decision created a circuit split with the U.S. Court of Appeals for the Seventh Circuit, which, unlike the Ninth Circuit, refused to enforce a forum selection clause in a similar suit.

While discussing the GAP matter, Mr. Phadke commented on the potential for more Delaware litigation involving companies based out of Ninth Circuit states like California, at least until the U.S. Supreme Court rules on the forum-selection issue.

Mr. Phadke also opined on investor lawsuits seen in the first half of 2023, in the wake of the collapse of Silicon Valley Bank, Signature Bank and Credit Suisse. In the article, Mr. Phadke observed that many of the banks have a “clear defense” against allegations of securities fraud and were made vulnerable by “unforeseen events” in the market such as a number of successive interest rate hikes.

Finally, Mr. Phadke weighed in on a shareholder dispute in Delaware Chancery Court that could determine whether TripAdvisor Inc. is allowed to reincorporate in Nevada. Mr. Phadke said an “interesting issue for the Delaware courts to weigh in on” will be whether TripAdvisor was allowed to make the decision to reincorporate without investor input.

Read the Law360 article. (Subscription may be required)