Deflating Golden Parachutes and Winning Independence

As local counsel, we represented two investors who filed a derivative lawsuit on behalf of Lithia Motors, Inc. to challenge an overly generous transition agreement granted to a retiring executive. After defeating motions to dismiss the complaint, the case settled on terms that provided substantial benefits to Lithia in the form of an independent auditor’s review of the transition agreement in question, as well as more significant and long-term protections, such as the appointment of five independent directors and governance provisions to avoid self-dealing.