Chenn v. Knabb

Counsel for Plaintiff in shareholder-derivative action based on board of directors’ approval of sale of $10 million of stock in Pegasus Wireless Corporation to Pegasus’s CEO and subsequent repurchase of stock for the original sale price after stock price plummeted from $8 to less than $1 a share. Case was among several shareholder-derivative suits and shareholder class actions based on alleged director misconduct, but the only one to survive two bankruptcy petitions and multiple dispositive motions that led to dismissal of other actions. Although two defendants (former Pegasus CEO and CFO) failed to appear and were subsequently found liable for stock fraud in SEC action and jailed for criminally violating federal securities laws, successfully negotiated settlement of all claims with remaining defendants.

Opposing Counsel: Fenwick & West LLP