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When a portfolio company fails, its investors can become the target. JMM took a $300 million claim to a jury trial and walked away with a complete defense.
Los Angeles, CA – June 8, 2026 – Jeffer Mangels & Mitchell LLP (JMM) secured a complete defense verdict for their client, a Swiss venture fund’s advisor, defeating a breach of fiduciary duty claim that sought more than $300 million in damages. On March 17, 2026, a Santa Clara County jury rejected every claim against the Swiss advisor and awarded the plaintiff nothing.
The case illustrates a risk for which every active investor should plan. When a portfolio company fails, the investors who funded and advised it can become the target and the more involved the investor, the more attractive a defendant it becomes. The theory is a familiar one: that the investor “controlled” the company, or that the director it placed on the board breached fiduciary duties owed to the company and that the investor should therefore answer for losses it did not cause. These claims are expensive to defend and difficult to try to a jury. JMM defends them — and wins.
The Case
In the late 1990s, an advised fund of JMM’s client invested approximately $10 million in ZF Micro Devices, Inc., a Silicon Valley semiconductor company, and placed a representative on its board of directors. After ZF Micro Devices ceased operations in 2002, an entity that acquired most of its assets, ZF Micro Solutions, recovered $20 million from National Semiconductor over conduct it claimed had forced the company out of business. When ZF Micro Solutions refused to pay any of that settlement to the fund, the Swiss advisor prevailed in a fraudulent transfer lawsuit against ZF Micro Solutions. ZF Micro Solutions then turned on the Swiss advisor, alleging that the conduct of the fund’s board designee had breached fiduciary duties owed to the company. The demand grew to more than $300 million by the time of trial.
The Swiss advisor’s position was straightforward: the claims were retaliatory, no fiduciary duty had been breached, and the company had failed for reasons no investor controlled, including National Semiconductor’s conduct and the company’s inability to raise further capital. The jury agreed and rejected every claim.
“Investors take on real risk when they back a company. They should not also bear the risk of being blamed when the company fails for reasons outside their control,” said Stanley M. Gibson, who led the trial. “That is the line we defended, and the jury agreed.”
JMM’s litigators defend investors, funds, and the companies they back when a failed investment becomes a lawsuit. The firm has represented the Swiss advisor for nearly three decades.
The trial team was led by partner Stanley M. Gibson and co-chaired by partner Matthew S. Kenefick, with associate Celine Ohanian.
About Client
JMM’s client is a venture capital investment advisory company founded in 1997 and headquartered in Oberrohrdorf, Switzerland. The firm focuses on seed, early-stage, and growth investments in the medical technology, semiconductor, and micro- and nano-technology sectors across the United States and Europe.
About JMM
Jeffer Mangels & Mitchell LLP is a full-service law firm committed to delivering outstanding results for its clients. From offices in Los Angeles, San Francisco, and Orange County, the firm serves clients’ needs worldwide. For more information about the firm’s attorneys and services, visit www.jeffer.com.
