Francis Pileggi

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Chancery Imposes Penalties for Not Saving Text Messages and Bad Faith Litigation

Justin Forcier, an associate in the Delaware office of Eckert Seamans, prepared this overview. Key Issue Addressed: Fees imposed for bad faith litigation as well as for failure to preserve text messages and other mishandling of ESI. In re: Shawe & Elting LLC, C.A. No. Cons. 9661-CB (Del. Ch. July 20, 2016). Background: This decision … Continue Reading

Firm Disqualified Based on Representation of Two Adverse Subsidiaries

In my latest ethics column for The Bencher, the national publication of the American Inns of Court, I highlighted a recent decision by a federal district court in which a law firm was disqualified based on its representation of two adverse subsidiaries of a parent company. The court’s useful application of Rule 1.7 and Rule 1.9 should be … Continue Reading

Chancery Upholds Ability of Managers to Waive Fiduciary Duties

In my most recent article for the publication of the National Association of Corporate Directors called Directorship, I provide an overview of a recent decision of the Delaware Court of Chancery that upheld the waiver of fiduciary duties for managers of a limited partnership. The name of the case is Employees Retirement System of the City … Continue Reading

Chancery Addresses “Commercially Reasonable Efforts” and Denies Request to Enforce Deal

In an expedited deal litigation matter, in The Williams Companies, Inc. v. Energy Transfer Equity, L.P., C.A. No. 12168-VCG (Del. Ch. June 24, 2016), the Court of Chancery denied a request to enjoin Energy Transfer Equity, L.P. (“ETE”) from evading a deal based on its inability to obtain a tax opinion that was a condition precedent … Continue Reading

Chancery Approves Sale of Deadlocked Company Proposed by Custodian

This post was prepared by Justin Forcier, an associate in the Wilmington office of Eckert Seamans. Why This Case is Noteworthy: The Court of Chancery approved, with certain modifications, the recommendation of an appointed custodian for the proposed sale of a company as a going-concern in light of the company’s two directors being deadlocked. In Re TransPerfect Global, Inc., … Continue Reading

Chancery Examines Good Faith Corollary to Duty of Loyalty in Short-Form Merger

This post was prepared by Justin Forcier, an associate in the Wilmington office of Eckert Seamans. The Court of Chancery in the case of In re Chelsea Therapeutics International Ltd. Stockholders Litigation, 2016 WL 3044721 (Del. Ch. May 20, 2016), addressed claims of bad faith in connection with a short-form merger of a developmental biopharmaceutical company … Continue Reading

Another Recent Chancery Opinion Fuels Skepticism About Section 220’s Usefulness

Why this Case is Noteworthy: The Court of Chancery’s opinion in Laborers’ District Council Construction Industry Pension Fund v. Bensoussan, C.A. No. 1123-CB (Del. Ch. June 14, 2016), is the second decision from the Court of Chancery in two months that provides a reasonable basis for skepticism about whether, as a practical matter, plaintiffs’ attorneys should wait for … Continue Reading

Chancery Explains that Special Litigation Committee Must Only Include Board Members

Why This Case is Important: The Court of Chancery opinion in Obeid v. Hogan, C.A. No. 11900-VCL (Del. Ch. June 10, 2016), will be cited often as a reference guide for fundamental principles of Delaware corporate law and LLC law, including the following: (1) even in derivative litigation when a stockholder has survived a motion to dismiss under … Continue Reading

Supreme Court Upholds Chancery’s Advancement Ruling

The Delaware Supreme Court in Andrikopoulos v. Silicon Valley Innovation Co., LLC, No. 490, 2015 (Order) (Del. June 8, 2016), affirmed the Chancery decision which was highlighted here, and which determined that the decision of a receiver to deny advancement rights was not in error, and that claims for advancement were appropriately treated as other … Continue Reading

More Directors and Officers Subject to Lawsuits in Delaware

We previously highlighted on these pages a Delaware Supreme Court decision in Hazout v. Tsang, that expanded the orthodox interpretation of a Delaware statute with the net result of making it easier to sue in Delaware an officer or director who has agreed to serve in that capacity for a Delaware entity. Now, readers have the benefit … Continue Reading

Delaware Supreme Court Addresses Direct v. Derivative Claims

The difference between a direct claim by a stockholder against a corporation as compared to a derivative claim, is a subtlety that even the most astute corporate litigator cannot always easily discern. Many Delaware court opinions have addressed the nuances that distinguish between such claims–and to make it more interesting for everyone the Delaware Supreme Court has … Continue Reading

Corporate Law Seminar

I have been asked to provide information about the following seminar on corporate law at Rutgers Law School-Camden: The Rutgers Center for Corporate Law and Governance is presenting a conference on corporate compliance on Friday, May 20, 2016, from 8:30 AM to 3:30 PM, entitled New Directions in Corporate Compliance. The conference will take place … Continue Reading

CEOs as Social Justice Warriors

Yesterday’s Wall Street Journal featured a front page article about an apparently increasing number of CEOs of public companies who use their companies’ resources, and wield their companies’ resources as a sword, to advocate in their official corporate capacities to advance their favorite social agendas–or to oppose legislation on social policies that they disfavor. Courtesy of highly-regarded corporate law scholar … Continue Reading

Supreme Court Rules on Duties of Delaware Directors

The Delaware Supreme Court recently ruled on the duties of directors of Delaware corporations who are appointed by particular stockholders. In OptimisCorp v. Waite, Del. Supr., No. 523, 2015 (2016), Delaware’s high court issued a nine-page Order with several substantive footnotes that provide practical insights for those who need to know what the rights and … Continue Reading

Chancery Rejects Advancement Claim for Fees on Fees

Generally, a successful claim for advancement of legal fees for a former director or officer entitles the prevailing party to “fees on fees” incurred for obtaining the favorable ruling. A recent ruling from the newest member of the Delaware Court of Chancery explains the limitations or the contours of that general rule. In Wong v. USES Holding … Continue Reading

No Per Se Duty to Disclose Financial Statement in Closely Held Company

A recent Delaware Court of Chancery transcript ruling is notable for stating that there is no per se affirmative obligation, absent a request for stockholder action, in a closely held company, to produce financial statements. The court held, however, that under certain circumstance, for example in response to a demand under DGCL Section 220, it could … Continue Reading
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