Preferred vs. Common

Professor Stephen Brainbridge wrote a terrific blog on In Re: Trados Incorporated Shareholder Litigation, No. 1512-CC (July 24, 2009), analyzing the duties a director owes to preferred shareholders vis a vis common shareholders. The court held that directors owe duties to common shareholders are common law in nature, where preferred shareholders are usually contractual in nature. If common shareholders and preferred shareholders have divergent interests, directors should favor common law shareholders.