KSF News, Updates, & Insights

Final Approval of Settlement in Twitter Litigation

On July 27, 2021, the Delaware Court of Chancery finally approved the settlement of the stockholder derivative lawsuit captioned Bassett Family Trust v. Costolo, et al., C.A. No. 2019-0806-TM (Del. Ch.) and two related stockholder derivative actions. KSF’s stockholder derivative action was brought on behalf of Twitter, Inc. (“Twitter”) against several of Twitter’s current and former directors and officers for breach of fiduciary duties involving false and misleading statements about Twitter’s user engagement and growth and for insider trading. Plaintiffs were able to secure a settlement providing that Twitter’s board of directors will pay $38 million in cash to Twitter. Twitter’s board will also adopt a series of corporate governance reforms, which include (among other things): (i) enhanced board independence and oversight reforms, including amendments to the charters for the Disclosure Committee and the Audit Committee; (ii) enhancements to oversight of corporate strategy and risk, internal controls, and disclosures, including the creation of the Independent Chief Compliance Officer; and (iii) enhancements to corporate policies regarding compliance training, compensation, insider trading, and recapture of cash-based incentive compensation.