ZF Micro Devices, Inc. v. TAT Capital Partners, Ltd.

This is the third chapter of Silicon Valley lihgation spanning more than 14 years involving a microchip company, ZF Micro Devices, Inc. (ZF Devices), and its successor, ZF Micro Solutions, Inc. (ZF Solutions). The successor company sued National Semiconductor Corporation (NSC)—ZF Devices’ foundry—and obtained a $20 million settlement in 2004. Afterwards, venture capital firms that had invested in ZF Devices, including TAT Capital Partners, Ltd. (TAT), sued ZF Soluhons and others for fraudulent transfer of the NSC settlement proceeds. The investors prevailed at trial in 2010 and this court affirmed the judgment on appeal.

In the instant third lawsuit, the ZF Entities alleged in a complaint that Mark Putney, a TAT representative who was a ZF Devices board member, breached fiduciary duties owed to ZF Devices. The ZF Entities also alleged in a separate cross-complaint—originally filed in the second lawsuit but later severed and consolidated in this third suit—that TAT breached its fiduciary duties to ZF Devices. This third lawsuit went to trial in December 2013. TAT and Putney prevailed, and the ZF Entities appealed.

At trial, TAT argued that ZF’s claim (accruing in Feb.…