Seaport Village Ltd. v. Seaport Village Operating Company, LLC, et al., C.A. No. 8841-VCL (Del. Ch. Sept. 24, 2014). This decision by the Delaware Court of Chancery highlights a counterintuitive statutory rule. The Delaware LLC Act provides that each LLC member, and the LLC itself, are considered parties to an LLC operating agreement, even if
September 2014
Update on Fee-Shifting Bylaw Issue in Pending Chancery Case
Recent activity in the Delaware Court of Chancery has followed the Delaware Supreme Court’s May 2014 decision in ATP Tour, Inc v. Deutscher Tennis Bund, 91 A.3d 554 (Del. 2014), highlighted on these pages, which upheld a fee-shifting bylaw, at least in principle. The plaintiff in the pending Delaware Court of Chancery case in…
Dismissal Denied for Disinterested Directors When Entire Fairness Applies to Transaction
In re Cornerstone Therapeutics Inc. Stockholders Litigation, Cons. C.A. No. 8922-VCG (Del. Ch. Sept. 10, 2014). This Chancery decision is noteworthy for its analysis of the applicable standard for a motion to dismiss members of a special committee when the challenged transaction would otherwise be subject to the entire fairness standard. This opinion provides a…
Chancery Applies Comity to Stay Litigation
In Scott v. Dandero, C.A. No. 9041-VCG (Del. Ch. Sept. 8, 2014), the Court of Chancery applied general principles of comity and judicial efficiency to deny a request to lift a stay of a case before it involving parties and issues that were common to separate pending litigation in Texas. This amorphous power of…
Chancery Upholds Forum Selection Clause Outside Delaware
City of Providence v. First Citizens BancShares Inc., et al., No. 9795, 2014 WL 4409816 (Del. Ch. Sept. 8, 2014).
The Delaware Court of Chancery upheld the forum selection clause of the bylaws of a Delaware corporation that requires most shareholder suits against the company to be filed in North Carolina, where the company’s…
Indemnification Rights Not Stymied by Amendment to Operating Agreement
The case of Branin v. Stein Roe Investment Counsel, LLC, 2014 WL 2961084 (Del. Ch. June 30, 2014) raised the interesting question of whether the operating agreement in effect at the time the suit was filed or the operating agreement in effect at the time the indemnification claim was made will control the right…
Chancery Rejects Reargument of Prior Decision on Advancement Claims
Pontone v. Milso Indus. Corp., et al., C.A. No. 7615-VCP, letter op. (Del. Ch. Sept. 3, 2014). This decision denied a motion for reargument of an opinion regarding advancement of fees pursuant to DGCL section 145 available to officers and directors. The nuance addressed in this case involves the types of counterclaims that are available…
First Filed Rule Applied to Arbitration Claim
LG Electronics, Inc. v. Interdigital Communications, Inc., C.A. No. 9747-VCL (Del. Ch. Aug. 20, 2014).
This decision applied the familiar first-filed rule, also known as the McWane Doctrine, to a first filed arbitration claim. The court dismissed a complaint that sought injunctive relief notwithstanding that the same issue had been presented in a previously-filed…