Delaware Litigation Lawyer & Attorney : Francis G. X. Pileggi : Corporate, Business, Commercial, Delaware Chancery Court

Professor Bainbridge discusses Vice Chancellor Lamb's recent decision in Gesoff v. IIC Industries, summarized here, where the importance of the independence of a special committee was discussed in the context of a freezeout merger between a parent and sub. A link is provided to an article by the good professor about the benefit of having more than one member of a board, which article was cited in the opinion and juxtaposed with the challenges of a one-person committee, who like Caesar's wife, must be beyond reproach. Here is the link:
ProfessorBainbridge.com: Cited in Delaware

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I join with Gordon Smith in congratulating Judge Kent Jordan, currently of the U.S. District Court for the District of Delaware, on the announcement that he was nominated for a seat on the U.S. Court of Appeals for the Third Circuit (which includes Delaware).
Conglomerate Blog: Business, Law, Economics & Society

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In Wal-Mart Stores, Inc. v. AIG Life Insurance Company, download file, the Delaware Supreme Court addressed claims that have now been reviewed twice each by the trial and appellate courts in Delaware. The high court reversed the Chancery Court's decision that dismissed an amended complaint.
The Supreme Court found that the amended complaint adequately alleges a claim of fraud in pleading that AIG sold Wal-Mart a product that was an economic sham designed to create enormous tax deductions and that AIG did so knowing that their product was flawed and without disclosing that those flaws jeopardized the favorable tax treatment that formed the basis of the deal. Page 8 of the decision, which is available at the above link, provides the three citations to the three prior reported decisions.
Although reversing the trial court, the Delaware Supreme Court did agree with the Chancery Court that Wal-Mart failed to state a claim under the doctrine of commercial frustration which excuses future performance under a contract only as follows:
"where, after a contract is made, a party's principle purpose is substantially frustrated without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his remaining duties to render performance are discharged, unless the language or circumstances indicate to the contrary."
In addition, the Supreme Court agreed with the Chancery Court that there was no fiduciary duty and no fiduciary relationship created by the transaction between the parties,as the court defined them, and cited to authorities discussing when a fiduciary relationship would be created, despite labels such as "agent". In this instance, the court agreed that the relationship with the insurance company and Wal-Mart was a "normal, arm's-length business relationship."
The Supreme Court also discussed the law of equitable fraud.
(see below link for completion of summary).

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The Wall Street Journal Blog reports on a recent decision by a U.S. District Court judge who ruled that prosecutors violated both the rights to due process and to a fair trial by "pointing a gun to the head" of KPMG in "strongly discouraging" KPMG to indemnify or otherwise pay for the legal bills of certain KPMG partners who were indicted in connection with a tax shelter matter. KPMG arguably had a duty to indemnify but they were concerned about retribution from the prosecutors. The 88-page opinion addresses the controversial U.S. Justice Department's Thompson Memo and related issues.
This issue is important in Delaware because the DGCL and many Delaware Chancery Court and Delaware Supreme Court cases make the statutory and/or contractual right to indemnification and advancement of legal fees almost a sacrosanct aspect of Delaware corporate law. See, e.g., recent Delaware Chancery Court decision summarized at this link.
If prosecutors by subtle, or not so subtle, threats of criminal prosecution against a whole company could nullify that key right of officers and directors then the benefit might be illusory when it is most needed. Here is the link to the WSJ Blog story and the full text of the court decision:
Law Blog: KPMG: Judge Finds Prosecutors Violated Defendants' Constitutional Rights

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In Eureka VIII, LLC v. Niagra Falls Holdings, LLC, download file, the Delaware Chancery Court recently ruled that as a remedy for the material breach of the Operating Agreement by a 50% member of an LLC, that member would lose its status as a member, thereby leaving the other 50% member as the sole member of the LLC. The breaching member, Niagra, would be left with the rights of an assignee under Section 18-1002 of the Delaware LLC Act which, in essence, means that despite not having the benefits of "membership" Niagra would retain its economic interest in profits, losses and distribution rights. Without voting rights, for example, the breaching member, Niagra, is left with an assignable interest in the LLC for dividend distributions and future sale proceeds.
The court reasoned that the remedy was appropriate in part because the breach created the exact problem that the LLC Agreement was designed to avoid. That is, due to financial problems, Niagra allowed a creditor to take control of it, and thus the remaining LLC member, Eureka, now found itself with a de facto partner that it never agreed to do business with and who had a very different objective, i.e., to cash-out its interests as fast as possible.
Likewise the court denied a counterclaim of Niagra for dissolution of the LLC based on allegations of incompatibility of 2 members owning 50% of an LLC, because the remedy left the LLC with only one member. Niagra also tried to assert a breach claim itself against Eureka but the court found that Niagra materially breached prior to any alleged breach by Eureka, thereby barring a counterclaim for specific performance (in addition to laches barring Niagra).
This case is a good illustration of the wide range of authority and flexibility that the Chancery Court has to customize equitable relief that fits the unique or special factual circumstances of each case that comes before it, in business litigation or otherwise.
Also noteworthy about this decision is a discussion at page 25 of the slip opinion and at footnotes 26 and 27, regarding those circumstances in which an oral waiver might prevail despite an express requirement in an agreement that any waivers must be written in order to be effective. Yes, it is possible and the opinion provides the policy reasons for such a result, in certain situations.
For comparison, see the recent decision, summarized here, by the same Vice Chancellor in which he used a similar remedy and removed from a management position the 90% owner and general partner of a limited partnership due to egregious breaches of fiduciary duties.

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The Wall Street Journal Blog reports that the Delaware Chancery Court refused to dismiss a case against AIG this week. The 2002 lawsuit was "brought by a Lousiana pension fund against Hank Greenberg over alleged improper payments made to the former AIG chairman through his holding company C.V. Starr. Two other top AIG executives are also named in the dispute. The pension fund, which held shares of AIG, alleges that Starr was merely a shell that allowed AIG execs to enrich themselves at the company's expense, and seeks to return monies to the company. " Here is the link:
Law Blog - Hank Greenberg & the Law

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The Newsletter of the Business and Corporate Litigation Committee of the American Bar Association's Business Law Section, for which I am the editor, just published its current issue. Here is the link.

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As I have written on this blog before on several occasions, electronic discovery issues should be of concern to all litigators, including those in Delaware involved in business litigation in Delaware's Chancery Court and Supreme Court, especially in connection with issues in the DGCL.
Law.com's Legal Blog Watch has a story about a Word document converted to pdf format that was E-filed with the court, but that had metadata still recoverable from the pdf document when it was converted back to Word.
This is a good cautionary tale for anyone who thinks that documents in pdf format cannot be mined for metadata. Here is the link:
Law.com - Inside Opinions: Legal Blogs

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The limited focus of this blog is to provide short highlights of corporate and commercial cases primarily from the Delaware Chancery Court and Delaware Supreme Court, with links to the entire text of those business litigation opinions. I also try to post, as my workload permits, on related topics of legal ethics, electronic discovery and the commentary of nationally recognized corporate law experts of interest to Delaware practitioners, such as Professors Larry Ribstein, Steve Bainbridge and Gordon Smith, among others. The foregoing is by way of introduction to a post by Prof. Bainbridge that would be of interest to anyone attempting to sue a foreign country, such as the Vatican, in Delaware.
Here is the link to the good professor's blog post on the topic:
ProfessorBainbridge.com: Suing the Vatican

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Discussing competition among states in the area of trust law has similarities to competition among states in corporate law. Prof. Ribstein posts about a recent article on the topic and observes that:
"...The real driver of state legal competition is not franchise fees or taxes, but the interests of local businesses, predominately lawyers, an I idea I first discussed in Delaware, Lawyers and Choice of Law, 19 Delaware Journal of Corporate Law 999 (1994). Lawyers compete for clients by maintaining the law of the state in which they are licensed." Here is the link:
Ideoblog: State competition for trusts

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In Carlson v. Hallinan, download file, the Chancery Court clarified a 70-plus page opinion of only two months ago that addressed a buffet of corporate issues and which was summarized on this blog here. See 2006 WL 771722.
In this comparatively brief letter opinion, the court clarified its prior opinion because, in part, the parties' counsel could not agree on the form of order to implement the prior opinion.
The court explained that based on the duty of a fiduciary to establish that they have properly dealt with corporate funds and other assets entrusted to their care, a breach of that duty requires that fiduciary to bear the full cost of an accounting ordered to remedy the breach of that duty.
However, in connection with the expense of a dissolution and receivership for the closely-held company, the court reasoned that the handful of owners would bear the cost in proportion to their ownership interests because one of the reasons for the dissolution was the inability of all the owners to "get along and play nice"; thus they should all bear the cost of the dissolution--keeping in mind the benefit they will all receive by the monetizing of their interests (especially the minority interests). On a procedural note, the court found that even if an argument is waived by not including it in post-trial briefs, the other party would still be required to prove their claim on that argument.

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In Gesoff v. IIC Industries, Inc., download file, the Chancery Court determined that the attempted removal of the minority shareholders in a going-private transaction using a long-form merger, resulted in a price being paid that did not equate with the fair value due for the shares of the minority. The court also found that the majority did not fulfill their duty to employ a fair process in the merger. The claims were made in a class action that alleged both unfair dealing and unfair price as well as a statutory appraisal claim.
Though the trial was held in May 2005, the post-trial briefing was not completed until February 2006. The court also determined that Section 102(b)(7) protected one of the defendants from personal liability for the judgment.

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The Conglomerate blog talks about an article by Prof. Telman that discusses the Business Judgment Rule in the context of executive compensation decisions by the Board. Here is a quote from the abstract:
"The Article ... illustrates why the Rule should not apply in cases involving challenges to board decisions relating to executive compensation through a detailed discussion of the on-going litigation relating to the hiring and dismissal of the Walt Disney Company's former President, Michael Ovitz." Other commentary and a link to the article are available on the Conglomerate blog. Here is the link:
Conglomerate Blog: Business, Law, Economics & Society

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In Windom v. Ungerer, download file, the Delaware Supreme Court a few days ago issued an opinion that addresses an issue of great practical usefulness to business litigation practitioners. The case involved a football league that was sued for an injury to a player. After suit was filed the league discovered that they had no commercial liability insurance. The player obtained a default judgment against the league and the league assigned their rights to the insurance company for the injured player, Windom. Windom then sued the insurance agents for the league. The original agent was an exclusive agent for Nationwide who had provided coverage initially but after a number of years Nationwide refused to renew the policy. At that time the original agent referred the league to a "general agent" to determine if that agent could find another insurance company that would provide coverage.
Though there was discussion among the parties of a presumption that the new insurance company, Pawtucket, would provide coverage, Pawtucket eventually returned the premium check and determined that they would not provide coverage. The dispute in this case arose because the general agent simply mailed the declination notice to the "property address" for the league, as opposed to the separate "mailing address" that was listed in the documents. The league said they never received the notice of declination of coverage. The agent had no proof of mailing or proof that the league received the mail he said that he sent.
When is a mailed letter presumed to be received, and who is an insurance broker?
The Supreme Court decided these issues and affirmed summary judgment for the Nationwide agent, finding that he was a mere "messenger" and not a "broker" tasked with finding new insurance for the league as that term is defined in the statute.
The court reversed, however, the trial court's grant of summary judgment in favor or the "general agent".
The Supreme Court reasoned that summary judgment in favor of the general agent was not appropriate due to a material issue of fact as to whether the presumption that a postage-paid envelope that is mailed to the proper address would be received by the addressee, should be rebutted based on the facts of the case. The determination of that factual issue impacts on the resolution of the issue of whether the manner in which the mail was sent fulfilled the admitted duty of the general agent to properly inform the league that their insurance coverage was declined (which coverage the agent assumed a duty to seek).
These "bread and butter" quotidian issues come up in many different contexts in the business world and it is helpful to have a Supreme Court decision that deals with them.

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Prof. Ribstein posts about the issues in a recently filed Chancery Court lawsuit by a law professor against CA, Inc. The issue is whether the shareholders can adopt a bylaw under Section 109 of the Delaware General Corporation Law. As summarized by Prof. Ribstein: "Section 141(a) empowers the directors to manage the company. Section 109 says the bylaw must not be inconsistent with law, and 141(a) says the director power is except as otherwise provided in the chapter. So is the 109 bylaw power subject to 141(a), or is 141(a) subject to the bylaw power? We seem to have a loop."
He adds that: "The shareholders probably can amend the bylaws to require a unanimous director vote under 141(b). The question here is whether they can restrict the board's power to enter into plans that last more than a year." This the cutting edge.
Here is the link:
Ideoblog: Lucian Bebchuk, shareholder activist

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Prof. Ribstein has a post that analyzes the competition among countries in Europe as a location for businesses to incorporate, in the manner that some say U.S. states compete. He asks whether London is the Delaware of Europe or the Wal-Mart of Europe for that purpose. He maintains that the competition among jurisdictions for corporations is not based on fees, "it's based on lawyers". Moreover, he concludes that: "...someday in the not distant future Delaware's competition will not be Washington, as Mark Roe has suggested it is now, but London." Here is the link:
Ideoblog: Corporate charter competition in Europe

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In Delta Pine Land Company v. Monsanto Company, download file, the Chancery Court read two related agreements together to conclude that the parties intended to arbitrate the issues raised. The Vice Chancellor refused to distinguish a recent Chancery Court opinion in Willie Gary, LLC v. James and Jackson, LLC, summarized here on this blog, which discussed the applicable standards about enforceability of arbitration clauses in great detail.
Unlike the Willie Gary case, the court found that the instant arbitration clauses did not have a "carve out" for injunctive relief.

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The U.S. Court of Appeals for the Third Circuit includes the State of Delaware in its territory, and a recent case involving the legal issues related to "deepening insolvency", based on state law, is the subject of a scholarly and insightful post by my friend Steve Jakubowski of the Bankruptcy Litigation Blog. Of course this topic is of importance to business litigation lawyers in Delaware. Here is the link:
Bankruptcy Litigation Blog: Deepening Insolvency: The Third Circuit Steps Back from the Breach

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UniSuper Ltd. v. News Corporation, 2006 WL 1550809 (Del. Ch. May 31, 2006) download file. In this Chancery Court case, the Chancellor required the parties to modify a release that was too broad in connection with the settlement of a class action to which an 18% shareholder objected. The court summarized the objection and its partial agreement with it as follows:

Liberty's objection to the release included four arguments: (1) the release extended to claims not part of the operative or core facts; (2) the release purported to extend to future claims; (3) the plaintiffs should be judicially estopped from asserting that the operative facts of the case include the merits of the decision to extend the poison pill because plaintiffs have expressly stated otherwise; and (4) the release bound non-voting shareholders, forcing them to give up claims in return for a benefit they do not share.
I was not persuaded by the third and fourth arguments, and explicitly stated so at the May 23 hearing. [FN4] Liberty's second argument was more persuasive. At the conclusion of the fairness hearing, I declined to approve the Settlement because I determined that, as drafted, the release language was unnecessarily prolix (to the point of being incomprehensible) and was overly broad, so that it potentially ran aground of the standard set forth by the Delaware Supreme Court in Nottingham Partners v. Dana.

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Corporate Law Professor Bill Sjostrom, who also co-founded a blog called Truth on The Market, has written a provocative scholarly article about whether annual meetings of shareholders to elect corporate directors should be required. The article is heavily laced with references to Delaware statutes and Delaware Chancery Court cases. It critiques the Chancellor's opinion in Hoschett v. TSI International Software, Ltd., 683 A.2d 43 (Del. Ch. 1996). Here's a partial abstract: The article examines the mandatory requirement under state corporate law and stock exchange listing standards that public corporations hold annual shareholders' meetings for the election of directors. Here is a link to the article.

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The Delaware Supreme Court today affirmed the Chancery Court decision in the Disney case. Here is a link to download the 91-page decision in the unanimously affirmed case styled: In Re: The Walt Disney Company Derivative Litigation. A tidal wave of insightful commentary is expected to come soon via the blogs of corporate scholars such as Professors Larry Ribstein; Gordon Smith and Steve Bainbridge. Here is the initial "teaser" post by Prof. Bainbridge:
ProfessorBainbridge.com: Disney Affirmed. One of the great things about blogs of corporate law professors is that we will now get expert analysis on a seminal, benchmark decision like Disney in a matter of hours and days from the time the decision is made public, instead of waiting weeks and months until the trade journals and law reviews of yesteryear circulated their articles.

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Relying on Delaware Supreme Court precedent that supports the exercise by the Chancery Court of wide discretion in fashioning equitable remedies as it deems appropriate in the circumstances presented, a general partner that owned 90% of a 3-member limited partnership was removed as a general partner due to the egregious breaches of the general partner's duty of loyalty. McGovern v. General Holdings, Inc., download file.
The remaining minority owners argued for the substitution of a "professional manager" to run the company, whose greatest asset was valuable patents and intellectual property. However the court found that sale of the company was more appropriate because the parties would never be able to "get along" and it was not practical to force a 90% owner to be an eternal outsider. Moreover due to his breaches of duty, the court allowed that the company needed to pay the attorneys' fees for the 2 minority members, but the 90% owner was required to repay the company for all the attorneys' fees that he caused the company to pay himself in the case.
There are many more salient details in the 56-page decision of the court that cannot be summarized in this short space. But download it and read the whole thing. It's better than any novel I have read recently.

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Patrick Robben and I are giving a seminar for the ABA on June 14 entitled Blogs: What Businesses and Lawyers Need to Know. It will be presented by teleconference and the details are available at this link. I am grateful to Patrick for seeking my involvement.

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Andrews Delaware Corporate Litigation Reporter recently reported about a settlement of a shareholders's claim, prior to suit, against Hollinger International in which the Chancery Court approved attorneys' fees in connection with the disclosure of fraud as opposed to the more common basis when a common fund is created--after suit is filed. They report that it is the first known award of such type prior to suit being filed.

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In Re: Appraisal of Transkaryotic Therapies, Inc. (Del. Ch., May 10, 2006), download file. In this letter ruling, the Chancery Court addressed whether it was necessary to have a "two-tiered" confidentiality order. The court found that there were no extraordinary circumstances that would justify the added complexity, and undue burden on the petitioners, of a two-tiered confidentiality order.
The court rejected the arguments for separate designations based on the following reasoning. First, the misuse of sensitive trade secrets and other highly protected information would be adequately covered by the one-tiered confidentiality approach in the same way that confidentiality orders have protected sensitive information in countless other appraisal actions. Second, the securities laws themselves protected the company in the market from the possibility of petitioners and their affiliates trading improperly on insider information.
This is a helpful explanation from the court for the practical aspects of business litigation. Often there are disagreements on the form of order for confidentiality matters, but not as often does the court give guidance in a published opinion, as opposed to a teleconference or comments from the bench. This pragmatic "view from the trenches" can be contrasted with the more refined academic discussions of the nuances of the "due care" and its role in the BJR.

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TCMP3 Partners LLP v. Centerpoint Corp. In this case, download file, a motion to enforce confidentiality obligations of information disclosed pursuant to mediation held under Chancery Court Rule 174 was brought in the context of a motion to enforce a Settlement Agreement allegedly reached during mediation. The court determined that Rule 174(d) was clearly violated by the disclosure in the motion of the disputed letter that was sent "in connection with" the mediation. Rule 174(d) provides that "any communication made in or in connection with the mediation that relates to the controversy being mediated, whether made to the mediator or a party, or to any person if made at a mediation conference, is confidential." There is a carve-out from that protection under subsection (2) as follows: "statements, memoranda, materials and other tangible evidence otherwise subject to discovery, which were not prepared specifically for use in the mediation conference." The court determined that the letter at issue was specifically prepared for use in the mediation conference. "Mediation conference" is defined in subsection (3) of Rule 174 as follows: "That process, which may consist of one or more meetings or conferences, pursuant to which the mediator assists the parties in seeking a mutually acceptable resolution of their dispute through discussion and negotiation." Consequently, the court ruled that the letter in dispute was protected by the confidentiality obligations of Rule 174.

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The Town of South Bethany v. Nagy (Del. Ch., May 12, 2006), download file. In this case the Chancery Court had jurisidiction based on a request for injunctive relief to enforce a new ordinance. The Court found that a new ordinance which, in effect, retroactively banned a floating dock installed by a town resident was a proper exercise of police power to protect the health, welfare and safety of town residents. There was neither an obligation to have a "grandfather clause" nor did the dock qualify, when built, as a legal nonconforming use.
The court exercised its discretion to waive the exhaustion of administrative remedies before filing suit (thus defeating that attempted defense); and as a procedural matter, determined that Chancery Court Rule 56(h) applied based on the two cross-motions and due to neither party raising factual issues. Thus, pursuant to Rule 56(h), the cross-motions for summary judgment were treated as a stipulation for decision on the merits based on the record submitted with the motion and thus no normal inferences in favor of the non-moving party would apply.

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Shadewell Grove IP, LLC v. Mrs. Fields' Franchising, LLC, download file , is a 33-page decision by Vice Chancellor Parsons in which he applied Utah law based on the choice of the parties and the fact that there was a material connection to Utah and no relevant Utah law that was contrary to Delaware public policy. The main issue was whether a License Agreement with a franchisee was orally modified or whether it was amended by the custom and practice of the parties. Because it does not involve substantive Delaware law, I mention it primarily as an example of the not infrequent application by Delaware courts of the laws of other states.

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Prof. Ribstein posts about "insta-suits" that are filed in connection with leveraged buyouts and related transactions claiming that the price is too low--realizing that the price will ultimately be increased regardless of the suit due to the normal negotiation process. Also referenced is VC Strine's opinion in Cox Communications where a scholarly analysis of the issue is provided especially to the extent lawyers seek fees as a result of the increased premia paid. Here is the link:
Ideoblog: What can we do about bad litigation?

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It has been reported that the Delaware Chancery Court has asked the state's disciplinary counsel to investigate the impact, if any, of the Milberg Weiss firm's indictment, including attorney Steven Schulman, on any pending cases in which it is involved, including the case against Michael Ovitz and Walt Disney Co., now pending in the Delaware Supreme Court, on appeal from the Chancery Court. Here is the link to the Dow Jones story:
Money News: - Delaware's Chancery Court Asks Probe Of Milberg Weiss - AOL Money & Finance

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While I realize many people are waiting for the Delaware Supreme Court's decision in the Walt Disney case, and I have no prediction when it will be released, I came across a blog post that suggests the Delaware Chancery Court refers with approval in its decision of last year to a law review article by Prof. Lyman Johnson--as did the parties in their appeal briefs. Of course the opinion refers to many law review articles and who knows how much weight should be given to one over the other. The article talked about the "good faith" aspect of the business judgment rule and, (according to the blog post which I am not commenting on as to its accuracy), argues that officers should not be given the same protection of the BJR as directors--though the outcome might suggest otherwise. Here is the link to the blog post and the underlying article:
LAW Information World Blog Archive School of Law Professor's Scholarship at Center of Walt Disney Lawsuit

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A U.S. District Court has ruled that one who maintains a blog cannot be sued for libel based on an anonymous defamatory posting on his blog. Of course, this is good news for people like me who maintain a blog. (However, the focus of this blog--casenotes on decisions of the Delaware Chancery Court and Delaware Supreme Court--does not lend itself to many opportunities for defamation.)
The case, DiMeo v. Max, involved an ongoing series of rude, obnoxious and arguably defamatory postings about an unsuccessful party organized by the principal of a PR firm.
Judge Stewart Dalzell, in Philadelphia, determined that Congress enacted Section 230 of the Communications Decency Act for two reasons -- to "promote the free exchange of information and ideas over the Internet," and to "encourage service providers to self-regulate the dissemination of offensive material over their services." Dalzell concluded that the purpose of Section 230 was to provide immunity from libel suits for Internet providers -- including bloggers. The federal statute was in response to an earlier decision that found liability based on the ability of an Internet provider to select and edit which postings to publish. The CDA, however, "overrides the traditional treatment of publishers under statutory and common law."
Law.com provides the story at the following link:
Law.com - Libel Laws Don't Prevent Blog 'Mockery'

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The Chancery Court ruled in Sutherland v. Dardanelle Timber Company, download file, that a proper purpose under Section 220 includes investigation of possible self-dealing and that a credible basis for the claim existed due to the controlling shareholder establishing his own salary. In this 29-page decision that described in great detail the disagreements among the three family members who owned a very successful lumber yard business, the Court ruled that as long as the primary purpose is proper, secondary motives will not defeat the primary purpose, and in any event it would be very hard to prove "false pretenses" in such a context. The court determined that it could review de novo the report of the Master on the record alone without a new hearing.
The court also acknowledged as a proper purpose in a Section 220 demand for books and records the investigation of the possible breach of fiduciary duty as long as there was "some credible evidence to warrant further investigation." Finally, the court also reiterated prior Delaware rulings that a parent corporation can only be forced to produce documents of a subsidiary if it controls that subsidiary.

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The recent Delaware Supreme Court decision in Delaware Bay Surgical Services, P.A. v. Swier, download file, addressed the statutory interpretation of "wages" as they apply to the claim of a doctor for unpaid wages under the Delaware Wage Act. The court also analyzed the claim for liquidated damages under an Employment Agreement and clarified Delaware law that although such contract provisions are not enforceable as a penalty they will be granted if the amount of liquidated damages in the agreement is a good faith estimate of actual damages from early termination of employment. The Supreme Court also confirmed that in Delaware, when an employee leaves an employer with an employment-related debt, the employer may deduct the amount from final wages if the employer has reasonable grounds to dispute the amount due to the employee. Thus, under the Delaware Wage Act, no statutory penalties such as attorneys' fees and doubling of the amount due would be payable to the good doctor who had prevailed on that claim in the trial court.

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I just returned from a business trip to Austria and saw that Prof. Bainbridge has a post on Pope Benedict's recent trip to the concentration camps in Poland. His references and links to the timeless question of "why is there evil in the world" is always thought-provoking to me. I saw some of the footage on TV and it was amazing how the rain stopped just before the Pope was about to speak and then you could see a rainbow behind him. How does he do that?
Here is the link:
ProfessorBainbridge.com: Benedict on the Holocaust

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