Rich v. Fuqi International, Inc., C.A. No. 5653-VCG (Del. Ch. June 12, 2013).
Issue Addressed: Should a receiver be appointed to enforce an order to hold an annual shareholders’ meeting pursuant to DGCL section 211? Answer: Yes.
Brief Background: The Court of Chancery previously ordered this company to hold a shareholders’ meeting pursuant to DGCL section 211 but the company did not comply. Some of the prior decisions involving this company were highlighted on these pages here. The court reasoned that the appointment of a receiver to conduct the meeting was less of a burden on shareholders than the imposition of monetary penalties. Despite prior decisions in this and other cases that rejected as a defense the alleged inability to produce audited financial statements as required by SEC regulations, the company sought unsuccessfully to obtain an injunction in federal court to avoid compliance with the Court of Chancery’s prior order to hold the annual meeting.
This case is one of an increasing number of similar matters that I refer to as the “China series” of Chancery opinions involving Delaware corporations whose operations are based in China, and who appear to struggle with adherence to the formalities and standards that the Delaware General Corporation Law requires.
Buyer’s Disclaimed Reliance on Any Representations and Warranties Outside SPA Does Not Bar Claim for Fraudulent Concealment of Material Information
Transdigm Inc. v. Alcoa Global Fasteners, Inc., C. A. No. 7135-VCP (May 29, 2013).
Issue Addressed: Does a buyer’s disclaimed reliance on representations and warranties outside of the stock purchase agreement bar the buyer’s claim for fraudulent concealment of material information?
Short Answer: No.
Brief Discussion: This is a dispute between parties to a stock purchase agreement (“SPA”). TransDigm is the parent company of McKechnie Aerospace Investments, Inc. and McKechnie Aerospace (Europe) Ltd. McKechnie USA was the sole shareholder of Valley-Todeco, Inc., and McKechnie UK was the sole shareholder of Linread Ltd. ( the “Fastener Subsidiaries”). The buyer/defendant Alcoa Global Fasteners, Inc. (Alcoa”) purchased all of the outstanding shares of the Fastener Subsidiaries pursuant to an SPA executed on January 28, 2011. The SPA contained language about disclosure of information and reliance. In particular, Section 5.8 of the SPA stated in relevant part:
Buyer has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed decision with respect to the execution, delivery and performance of this Agreement and the transactions contemplated hereby. Buyer agrees to accept the Shares without reliance upon any express or implied representations or warranties of any nature, whether in writing, orally or otherwise, made by or on behalf of or imputed to TransDigm or any of its Affiliates, except as expressly set forth in this Agreement.
One of Linread‘s most important customers, Airbus, had a contract with Linread covering the period January 1, 2005 to December 31, 2008, which was later extended to December 31, 2012. During due diligence, Alcoa asked Transdigm specific questions to “understand the scope of Linread‘s business with Airbus and the strength and potential for future success of the Linread–Airbus business relationship.” Unbeknownst to Alcoa, Transdigm was having issues with Airbus about pricing and the future of the Airbus business and “[a]lthough TransDigm had information at that time that would have been responsive to Alcoa‘s questions, TransDigm intentionally did not reveal some of that information in its responses.” Indeed, it was not until after the SPA was executed that Alcoa learned that Airbus was unhappy about pricing and that McKechnie UK‘s CEO verbally offered (and Airbus had accepted) a 5% discount on all lockbolts purchased under the Airbus Contract starting on January 1, 2012. In addition, Airbus indicated that it “seriously was considering moving 50%–55% of its lockbolt business to a European competitor.”
While Alcoa claimed that Transdigm engaged in fraud related to the transaction or misrepresented certain facts in the SPA, it was TransDigm that filed suit seeking reformation and breach of contract on issues unrelated to this motion. Alcoa counterclaimed alleging, among other things, concealment of material information and misrepresentation in the SPA. Transdigm then filed a motion to dismiss those counts in the counterclaim. Alcoa responded by arguing that while in Section 5.8, Alcoa admittedly disclaimed reliance on any extra-contractual representations, the claim for concealment was not based on any extra-contractual representation by TransDigm. Rather, it arose from the intentional and affirmative concealment of material facts and Section 5.8 did not preclude such a claim.
The Court agreed with Alcoa, finding that the counterclaim stated a prima facie claim for active concealment based on the allegations regarding, among other things, conversations between Alcoa and Transdgim where Transdigm representatives were specifically asked about payments relating to Airbus and Transdigm. Those representatives not only failed to say anything about the 5% discount or the threat of Airbus moving its business, they “made an effort to hide this information.” As the Court noted:
Based on these allegations, it appears reasonably conceivable at this preliminary stage of the litigation that Alcoa could prove that the TransDigm representatives who attended the January 6, 2011 meeting were apprised of the information allegedly known to Costello and Brown, among others, and that they intentionally omitted or concealed information from Alcoa. Alternatively, it is also reasonable to infer that, if the TransDigm representatives who attended the January 6, 2011 meeting did not know of the discount and potential loss of Airbus business, their ignorance—and resultant inability to inform Alcoa—was due to the active concealment of the information by Brown and others. Thus, the Counterclaim adequately alleges fraudulent and active concealment of material information.
The Court concluded that Alcoa “conceivably could prevail on its claim for fraudulent and active concealment of material information.” As a result, the Court denied Transdigm’s motion to dismiss those claims but granted Transdigm’s motion to dismiss the misrepresentation claims.
Johnson v. Smithkline Beecham Corp., 2013 U.S. App. LEXIS 11501 (3d Cir. June 7, 2013).
Issue Addressed: For purposes of diversity jurisdiction, should a holding company’s citizenship be defined by the activities of its limited liability company (LLC) subsidiary given that a holding company’s primary activity is to own and manage, not to operate its assets.
Short Answer: No. The Circuit Court reaffirmed precedent dictating that the citizenship of a LLC is determined by the citizenship of the LLC’s members, not by the LLC’s activities. The Circuit Court concluded that GSK Holdings’ principal place of business is in Wilmington, DE where its board of directors reaches consensus-based investment resolutions regarding its subsidiary, GSK LLC.
The ‘nerve center’ test endorsed in Hertz Corp. v. Friend, 559 U.S. 77 (2010), dictates that a corporation’s citizenship, for purposes of diversity jurisdiction, requires the identification of the single place that is the corporation’s actual center of direction, control, and coordination.
- SmithKline Beecham Corp. – predecessor to GSK LLC. SmithKline Beecham converted from a PA corporation into a Delaware LLC in 2009. Following the conversion, SmithKline Beecham dissolved under PA law. SmithKline Beecham’s sole shareholder is GSK Holdings.
- GSK LLC – large pharmaceutical company responsible for operating the U.S. division of GlaxoSmithKline plc, the British ‘global head’ of the GlaxoSmithKline group of companies formed in 2009.
- GSK Holdings – DE corporation founded in 1999 that holds GlaxoSmithKline’s plc’s investments in the U.S.
The Plaintiffs filed a personal injury action against Defendants alleging that the Defendants were aware of the drug’s risks and engaged in an elaborate cover-up to avoid liability. In 2011, Smithkline asserted diversity jurisdiction; in response, Plaintiffs filed a motion arguing that diversity jurisdiction was lacking and removal improper because four of the seven Defendants, plus the Plaintiff Lucier, were Pennsylvania citizens.
Like any other holding company, GSK Holdings’ role is confined to the interest it owns in its subsidiary, GSK LLC. The plaintiffs argued that GSK Holdings conducted its substantive work in Philadelphia and London and that the board’s meetings in Wilmington, DE were mere ratifications of business decisions made elsewhere. Indeed, the GSK Holdings board received various support services from individuals in both Philadelphia and London. Nonetheless, GSK Holdings insisted that that its reached business decisions only at the board meetings, located in Wilmington.
- The Third Circuit reaffirmed the Supreme Court’s determination in Carden v. Arkoma, 494 U.S. 185, 189 (1990) which established that because unincorporated entities are not recognized as legal persons, courts must look to the citizenship of the people or corporations who comprise it to determine if diversity jurisdiction exists. The Third Circuit stressed that such a strict adherence to mechanical rules comports with the Court’s insistence on keeping jurisdictional rules as simple as possible. See *25-27. Thus, SmithKline Beecham’s formal conversion to GSK LLC emphatically changed the “jurisdictional calculus.” See *41-42.
- The court clarified that the fact that a holding company holds an LLC rather than a corporation, does not in itself complicate the nerve center analysis. The court emphasized that Hertz only requires that it determine GSK Holdings’ center of control, not the center of direction and control for GSK LLC. *40-41.
- The court rejected the Plaintiffs’ ‘delegation theory’ which argued that GSK LLC’s principal place of business is in Philadelphia because GSK Holdings allegedly delegated managerial power to managers in Philadelphia. *35-38. The court explained that adopting the delegation theory would reverse the Zambelli analysis which every Circuit Court faced with the question of a LLC’s citizenship has applied. See *28-31, citing Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 420 (3d Cir. 2010). The Zambelli analysis establishes that for removal purposes, the citizenship of an LLC “is determined by the citizenship of its members.”
- The court elaborated that the various corporate functions provided from Philadelphia and London were merely intended to inform or facilitate the investment resolutions made by the GSK Holdings board in Wilmington, DE. See *52-53. In so concluding, the court explicitly noted that it was neither carving out a holding-company exception to Hertz nor holding that the location of board meetings will invariably determine a holding company’s citizenship. See *54, ft 21.
Additional Arguments Rejected:
- Platiffs’ fall-back argument in their efforts to defeat diversity jurisdiction was that although SmithKline Beecham converted to GSK LLC and dissolved as a PA entity, PA law preserves its citizenship for diversity jurisdiction purposes. The court accorded that SmithKline Beecham’s dissolution as a Pennsylvania corporation did not, standing alone, destroy its Pennsylvania citizenship. See *61-63. But, that since SmithKline Beecham did not simply dissolve, but also domesticated itself under Delaware law by converting to a DE LLC (GSK LLC), under DE law, all of SmithKline Beecham’s debts, liabilities and duties laid with GSK LLC. *63-64. Thus, for purposes of establishing diversity jurisdiction, SmithKline Beecham’s Pennsylvania citizenship was moot.
We appreciate the assistance of our summer intern, Stephenie Reimer, in preparing this post.
Among the key corporate and commercial Delaware decisions that we have highlighted on these pages during the first five months of 2013, the following decisions either clarified existing Delaware law or announced new law on important substantive or procedural topics. This is a supplement to the annual review of cases we have provided on this blog for the last eight years. Other cases decided so far in 2013 may have been the subject of more commentary elsewhere, but we think that among the 80 or so cases we have reviewed from January through May of 2013, those listed below have the most wide-ranging importance and relevance.
The list was intentionally kept relatively short, which increased the risk of omitting some opinions that also are noteworthy, so we encourage readers to send us suggestions for additions to this list. Hyperlinks below lead to both a synopsis and each slip opinion.
Supreme Court Determines that There is No Fiduciary Duty to Structure Executive Compensation to Take Advantage of Corporate Tax Deduction (Freedman v. Adams). This decision is another example of how difficult it remains to challenge compensation decisions on the basis of Delaware corporate law.
Supreme Court Enforces Duty to Negotiate in Good Faith (SIGA Technologies v. PharmAthene). Most lawyers will be surprised to know that an obligation to negotiate can be enforced in Delaware even when a term sheet is not complete or final.
Supreme Court Upholds Presumption of Good Faith in Agreement to Bar Claims (Norton v. K-Sea Transportation). This is one of many recent examples where an LP agreement waived all duties except the non-waivable implied duty of good faith, but the agreement also created a presumption of good faith that made it almost impossible to challenge wrongdoing. N.B. Waivers will be enforced. Read before signing to know what duties and rights are being waived.
Chancery Clarifies Fiduciary Duty of Disclosure Owed by Directors and Majority Shareholders when Purchasing Shares or Selling Shares to Existing Shareholders (In re: Wayport, Inc. Litigation). This opinion provides a textbook-style explanation of the duty of disclosure in general, as well as in the context of selling and buying shares among existing shareholders.
Supreme Court Establishes New Standard for Trial Courts to Determine Appropriate Penalty when Pretrial Deadlines are Not Met (Christian v. Counseling Resource Associates, Inc.). This is a must-read for lawyers (and their clients) to understand when court approval is needed to extend pre-trial deadlines and the consequences of missing pre-trial filing deadlines.
Chancery Emphasizes Duty of Oversight Owed by Directors Includes Corporate Operations in Foreign Countries (Rich v. Chong and Puda Coal and In re: China Agritech, Inc. Shareholder Derivative Litigation). This trio of decisions, all involving operations in China of Delaware corporations, should worry directors of companies with far-flung operations in distant countries unless they make visits to those countries or otherwise make themselves sufficiently aware of those operations.
Business Judgement Rule Announced as Standard Applicable to Controlling Shareholder Transactions with Safeguards (In Re MFW Shareholders Litigation). This iconic Chancery decision provides a clear standard to practitioners who formerly had less definitive guidance (and multiple conflicting standards) to advise clients on the standard that would apply in Delaware to controlling shareholder freezeouts.
Court Finds Bank Breached Bailment Agreement Regarding Collateral of Rare Coins and Bullion; Awards Attorneys Fees Under Bad Faith Exception to the American Rule
Israel Discount Bank of New York v. First State Depository Company, LLC, C.A. No. 7237-VCP (Del. Ch. May 29, 2013). Several of the prior Chancery decisions in this case were highlighted on these pages here, here and here.
Issue Addressed: Did the defendant depository bank breach the agreement by releasing collateral and interfering with the plaintiff’s consent, inspection, and removal rights?
Short Answer: Yes.
Brief Discussion: This is a post-trial decision regarding a dispute involving banks and the handling of loan collateral consisting of rare coins and bullion. The Court’s comment in footnote 2 of the opinion on the nature of the dispute sets the tone:
Because this case involves businesses that, by their nature, should keep accurate and up-to-date records, the recitation of facts should be simple. Unfortunately, that is not the case. A major reason is that the central figure in this dispute … is an unscrupulous businessman who used his businesses, [the defendants], to move around assets in the equivalent of a three-card monte scheme to serve Defendants’ ends and without regard to [plaintiff’s] rights.
Plaintiff, Israel Discount Bank of New York (“IDB”) lent money to Republic National Business Credit LLC (“Republic”) as part of a revolving credit agreement. Republic then issued loans to various entities and took an interest in collateral for those loans, IDB, in turn had an interest in the same collateral as a result of IDB’s security interest in Republic’s assets. In 2006, Republic asked IDB to have the collateral transferred to defendant First State Depository (“FSD”) because FSB offered better pricing. IDB, Republic and FSB entered into a bailment agreement requiring that, upon receiving written notice from IDB, FSB would refrain from releasing the collateral without the written authorization from IDB. However, despite adequate notice, FSB, without consulting with IDB, released the collateral to the defendant Certified Assets Management, Inc. (“CAMI”) (CAMI has the same owner as FSB) and a large amount of the collateral was never returned to FSB.
IDB filed suit alleging that FSD breached the bailment agreement by releasing collateral without IDB‘s authorization and refusing to allow IDB to inspect and remove the collateral. IDB also alleged that CAMI converted the collateral by wrongfully exercising dominion and control over it without IDB’s authorization. Defendants counterclaimed and sought a declaratory judgment that, among other things, FSD never sold, traded, or offered to sell or trade its customers’ property. In addition, the defendants raised a “legion of defenses” that included laches, and the doctrine of election of remedies.
The Court found that FSD breached the bailment agreement by releasing collateral and interfering with IDB’s consent, inspection, and removal rights. The Court found that CAMI improperly converted the collateral when it took possession of the collateral and did not return it. The Court also found that defendants, among other things, misled the Court and IDB as to the whereabouts and value of the collateral, delayed the litigation and asserted frivolous motions, and advanced multiple theories that had “minimal grounding in fact and law,” Accordingly, the Court awarded to IDB its attorneys’ fees and expenses under the bad faith exception to the American Rule.
In Re MFW Shareholder Litigation, C.A. No. 6566-CS (Del. Ch. May 29, 2013).
Issue Addressed: What standard of review should apply to a going-private merger conditioned upfront by the controlling stockholder on approval by both a properly empowered, independent committee and an informed, uncoerced majority-of-the-minority vote.
Short Answer: When a controlling stockholder merger has, from the time of the controller’s first overture, been subject to (i) negotiation and approval by a special committee of independent directors fully empowered to say no, and (ii) approval by an uncoerced, fully informed vote of a majority of the minority investors, the business judgment rule of review applies.
This important Court of Chancery opinion is destined to be cited often as a seminal decision regarding the standard of review in freezeouts and related transactions involving a majority shareholder. It announces unequivocally a standard applicable to these transactions, whereas previously the applicable standard was often debated but unresolved. Because it has already generated substantial commentary within the few days of its issuance among academics, practitioners and the press, at this time I will refer the reader to some of the existing commentary about the case. For example, a favorite and a friend of the blog, Professor Stephen Bainbridge, whose scholarship was cited in this opinion, provided the following post on this case:
On Wednesday, Chancellor Leo Strine of Chancery Court gave companies a powerful incentive to build both independent board review and minority shareholder approval into the going-private process, writing new law that should boost shareholder protections. Strine granted summary judgment to M&F Worldwide, finding that the board did not breach its duty to shareholders when it approved a $25 per share offer by MFW’s controlling shareholder, MacAndrews & Forbes (which, in turn, is wholly owned by Ron Perelman). Of much broader significance, the chancellor also said, in a scholarly opinion devoid of the usual Strinian flourishes of rhetoric, that because MFW structured the deal process so that an independent board committee negotiated the transaction and minority shareholders subsequently approved it, the deal should be evaluated under the deferential business judgment standard, not the more rigorous entire fairness standard.
“This conclusion is consistent with the central tradition of Delaware law, which defers to the informed decisions of impartial directors, especially when those decisions have been approved by the disinterested stockholders on full information and without coercion,” Strine wrote. “Not only that, the adoption of this rule will be of benefit to minority stockholders because it will provide a strong incentive for controlling stockholders to accord minority investors the transactional structure that respected scholars believe will provide them the best protection.” And as an added benefit, Strine said, companies that subject going-private deals to the scrutiny of both an independent board committee and a vote of minority shareholders will have an easier time fending off litigation challenges to their transactions by minority shareholders.
Even the chancellor seems sure that his is not the last word on structuring buyouts to receive business judgment deference. He noted several times that he is offering his interpretation of Supreme Court precedent and invited the justices to set him straight if he’s wrong. But in the meantime, corporate lawyers advising on going-private deals will have to think hard about the sale process. And shareholder lawyers will have to think just as hard about whether it makes economic sense to challenge transactions that will be evaluated under the business judgment standard.
Go read the whole thing.
Many other commentators have provided summaries of the case within a few days of this opinion’s publication. See, e.g., this link. See also this link. Professor Larry Hamermesh, one of Delaware’s favorite corporate law scholars, provides insightful analysis of the opinion here. The good professor, in addition to noting the more substantive aspects of the opinion, also observes the far-reaching discussion in the opinion about dicta, or dictum, and what parts of any opinion, in general, are restricted to the facts and legal issues presenting in a particular case.
National Industries Group (Holding) v. Carlyle Investment Management LLC, Del. Supr., No. 596, 2012 (May, 29, 2013).
Issues Addressed: Enforceability of a forum selection clause, and the prerequisites to vacate a judgment under Court of Chancery Rule 60(b)(6).
This case involved a dispute between two sophisticated entities. One was based in Kuwait and one in the U.S. The parties’ forum selection clause required disputes to be litigated exclusively in the courts of Delaware. When the Kuwaiti company sued the U.S. company, Carlyle Investment Management, in Kuwait, Carlyle sued in the Delaware Court of Chancery seeking an injunction to bar the suit in Kuwait. The strange part of this case is that the Kuwaiti company ignored the Delaware proceedings, based on its position that there was no jurisdiction over it, and allowed a default judgment to be entered against it. Then, a year later, the Kuwaiti company tried to have the judgment against it vacated. After it sought to vacate the judgment, it admitted that it was aware of the proceedings in Delaware. Bad strategy.
The Supreme Court upheld the default judgment. The Court of Chancery opinion was highlighted on these pages at this link.
Key Takeaway: Forum selection clauses in an agreement between sophisticated parties will be upheld in Delaware, as a general principle. Although, there still must be equitable jurisdiction for the Court of Chancery to hear a case, because the parties cannot confer that by contract. Nonetheless, Delaware’s high court found that there was equitable jurisdiction in this matter.
As a practice tip, in order to avoid the issue of equitable jurisdiction, a forum selection clause should allow for any court in Delaware to be the forum for disputes, as compared to naming a particular court. There are many other nuances about a forum selection clause issue in this decision, as well as an exploration of the deep roots on which the court’s reasoning is based, including U.S. Supreme Court opinions. This decision is must reading for those who need to know the latest Delaware law on forum selection clauses.
As an added bonus, Delaware’s high court discusses the requirements for vacating a default judgment under Court of Chancery Rule 60(b)(6). Hint: Not a good idea to ignore the proceedings and then wait a year before seeking to vacate.
Brinckerhoff v. Enbridge Energy Company, Inc., Del. Supr., No. 574, 2011 (May 28, 2013). This is the third Delaware Supreme Court decision in two consecutive business days that addressed the issue of good faith in the context of an agreement. This is the second decision on the same day that addressed the provision in an LP agreement that creates a presumption of good faith based on the reliance on a expert consultant. This short 10-page decision made quick work of explaining why Delaware’s high court was affirming Chancery’s dismissal of the claims for failure to establish bad faith.
The other two very recent Supreme Court decisions addressing good faith in the contractual context are highlighted on these pages at this link for the Norton v. K-Sea case, and this link for the SIGA v. PharmAthene case.
Norton v. K-Sea Transportation Partners, L.P., Del. Supr., No. 238, 2012 (May 28, 2013). This Delaware Supreme Court decision is the second in consecutive business days that addresses the concept of good faith in the contractual context. See SIGA Technologies, Inc. v. PharmAthene, Inc., highlighted on these pages. (Photo: Supreme Court Building in Dover.)
Issue Addressed: Did provision of LP agreement that provided for the presumption of good faith, bar claims based on an alleged conflict of interest? Short Answer: Yes.
The Court of Chancery’s opinion in this case was highlighted on these pages and provides more background details. This opinion is a relatively short and pithy 28 pages in the slip opinion format and readers interested in this topic should read the whole thing. At this time I will simply provide a bare bones overview. In essence, the context was a merger of K-Sea Transportation Partners L.P. and Kirby Corporation. The LP’s general partner (GP) held incentive distribution rights (IDR) which had value separate from the interests of the common unitholders. With affiliates, the GP controlled the LP.
The plaintiff, Norton, claimed that the GP had a conflict of interest when deciding to approve the merger due to compensation payable to the GP, for the IDR, that was not payable to the other unitholders. A Conflicts Committee hired independent financial and legal advisors, and unanimously recommended the merger to the full board, which also approved it.
Bullet Points from Court’s Legal Analysis
- The high court recited fundamental Delaware contract interpretation principles, such as the following gem: “A meaning inferred from a particular provision cannot control the agreement if that inference conflicts with the agreement’s overall scheme.” See footnote 23 and related text.
- The truism was underscored that the Delaware LLP Act gives maximum effect to the principle of freedom of contract and also allows the parties to expand, restrict or eliminate any fiduciary duties a partner may owe–except that the implied duty of good faith and fair dealing cannot be eliminated from the LP agreement. See Section 17-1101 (a) and (c).
- The court construed the LP agreement to waive all fiduciary duties and replace them with a contractual fiduciary duty which merely required the GP to “reasonably believe that its action is in the best interest of, or not inconsistent with, the best interests of the Partnership.”
- Importantly, the parties did not raise on appeal, and the high court did not address, the discussion by the Court of Chancery about how the presumption of good faith contained in the agreement interfaced with the implied duty of good faith and fair dealing. See footnotes 62 and 67.
- Although the facts supported an inference that the GP “may not have” acted in good faith, and extracted an excessive amount for its IDRs at the expense of the limited partners, section 7.10(b) of the LP agreement provided a “conclusive presumption” that the GP acted in good faith if the GP relies on a competent expert’s opinion as to matters the GP reasonably believes to be within that person’s expertise. The court found that the fairness opinion relied on by the GP satisfied this provision of the agreement.
- If the unitholders were not happy with the terms of the merger, they still had an opportunity to vote against it. Thus, the court explained that their remedy was “the ballot box, not the courthouse”. They should have realized that their remedies were otherwise limited due to the waivers and restrictions in the agreement that bars claims for breach of fiduciary duty that would apply, for example, in the corporate context.
- Delaware’s high court also rejected claims against the board members of the GP, reasoning that there was no cognizable claim against them for causing the GP to take an action that did not breach the GP’s duties under the LP agreement. See footnote 66.
The current issue of the Delaware Journal of Corporate Law that recently came in the mail, Volume 37, No. 3 (2013), includes a reprinting of the new Practice Guidelines recently promulgated by the Court of Chancery, and also features an introduction to those new court “de facto rules” by Kevin F. Brady and Francis G.X. Pileggi. The citation for the article is: 37 Del. J. Corp. L. 995 (2013). Eventually, the article will be available online at the Journal’s website.
Congratulations are also due to Kevin F. Brady for recently being named as one of the Delaware Super Lawyers.