KB Home, Inc. (NYSE:KBH)

In the KB Home shareholder derivative litigation, plaintiffs alleged that insiders of KB Home, Inc., a prominent builder of single family homes in the United States and France, manipulated their stock option grant dates to misappropriate millions of dollars in illicit compensation, causing significant financial and non-monetary damages to KB Home and its shareholders.

Plaintiffs brought claims on behalf of KB Home against its officers and directors for breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets, and unjust enrichment. After litigating the case for over two years, Robbins Arroyo LLP attorneys helped to recover over $30 million in cash benefits to KB Home. In addition, our attorneys helped to cause KB Homes to improve its corporate governance and to implement remedial measures, including separation of the Chairman of the Board and CEO positions; declassification of the Board of Directors; elimination of the “fair price” and supermajority voting provisions from KB Home’s Certificate of Incorporation; majority voting for elections to the Board; a compensation claw-back for the CEO in the event of an accounting misstatement due to the CEO’s misconduct; engagement of a compensation consultant to perform periodic comparative studies; adoption of formal written procedures for the grant of stock options; elimination of the Executive Committee on the Board; and limits on future executive severance payments.

In re KB Home Shareholder Derivative Litigation, CV 2:06-5148-FMC(CTx) (C.D. Cal. Feb. 9, 2009).

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