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In an opinion this month in
Revive Investing LLC v. FBC Holdings S.A.R.L., Magistrate Judge Gorenstein of the Southern District of New York recommended the grant of summary judgment to the defendant in a Section 16(b) “short-swing profit” action after finding that a prior settlement agreement between the defendant and different plaintiffs was valid and contained a release that precluded the claim at issue. Although Judge Gorenstein rejected the defendant’s argument that only a minimal standard of review should apply to Section 16(b) settlements, he nonetheless upheld the settlement against various challenges raised by the plaintiff. Litigants in future actions involving Section 16(b) settlements will want to consult Judge Gorenstein’s reasoning on the applicable standard of review and the scrutiny that courts apply to such settlements going forward.