Francis Pileggi

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Derivative Litigation Remains Corporate Asset

For my latest column in the current issue of Directorship, the publication of the National Association of Corporate Directors, I highlight a recent decision of the Delaware Court of Chancery that explains the truism that a derivative lawsuit is an asset of the corporation. In Park Employees’ and Retirement Board Employees’ Annuity and Benefit Fund of … Continue Reading

Chancery Applies Discounted Cash Flow Analysis in Valuation Decision

Justin Forcier, an associate in the Delaware office of Eckert Seamans, prepared this overview. The Delaware Court of Chancery recently applied a discounted cash flow (“DCF”) analysis to value a privately-held company following a merger between ISN Software Corp. (“ISN”) and ISN’s wholly-owned subsidiary, with ISN continuing as the surviving company.  In re ISN Software … Continue Reading

Court of Chancery Awards Mootness Fees for Additional Disclosures

Justin Forcier, an associate in the Delaware office of Eckert Seamans, prepared this overview. The decision in this matter should be of widespread interest to corporate litigators and is the latest in the evolution of disclosure-only settlements following the  Delaware Court of Chancery’s decision in In re Trulia Inc. Stockholder Litigation, C.A. No. 10020-CB (Del. … Continue Reading

Chancery Addresses Tools and Principles for Corporate Litigators

The Delaware Court of Chancery recently selected lead counsel and lead plaintiffs in response to competing motions in connection with class action stockholder litigation, applying the well-worn principles in Hirt v. U.S. Timberlands Service Co., 2002 WL 1558342, at * 2 (Del. Ch. July 3, 2002).  In the course of applying those factors to the facts of … Continue Reading

Chancery and The Wall Street Journal

The Delaware Court of Chancery was mentioned in an editorial on the opinion page of The Wall Street Journal today in connection with a decision by Judge Posner of the U.S. Court of Appeals for the 7th Circuit in which he rejected a “disclosure only” settlement. In re Walgreen Co. Stockholder Litigation, No. 15-3799, opinion … Continue Reading

Chancery Dismisses Caremark Claims

A recent Delaware Court of Chancery decision serves as a reminder that Caremark claims are among the most difficult corporate litigation claims to make against directors. Melbourne Municipal Firefighters’ Pension Trust Fund v. Jacobs, C.A. No. 10872-VCMR (Del. Ch. Aug. 1, 2016).  Of course, most readers are aware that Caremark is the colloquial reference for … Continue Reading

Chancery Allows Claims Against Directors for Interested Transaction

A recent Delaware Court of Chancery decision should be useful to corporate litigators for its practical explanation of the type of transaction that will be considered an “interested” one and subject to the entire fairness standard.  In re Riverstone National, Inc. Stockholder Litigation, Consol. C.A. No. 9796-VCG (Del. Ch. July 28, 2016). Background The background of … Continue Reading

Chancery Compares Claims Against Director Based on Fiduciary Duty and Contract

The Court of Chancery in Jeter v. RevolutionWear, Inc., C.A. No. 11706-VCG (Del. Ch. July 19, 2016), provides a helpful explanation and application of several basic principles of Delaware corporate and commercial law that are useful to include in the toolbox of corporate and commercial litigators. Background Facts: The court’s opinion begins with the admonition that: “This … Continue Reading

Court Awards Advancement to Officer of Affiliated Entity

Narayanan v. Sutherland Global Holdings Inc., C.A. No. 11757-VCMR (Del. Ch. July 5, 2016). This Delaware Court of Chancery opinion addressed: (1) Whether separate sources of indemnification, including the company’s bylaws and an indemnification agreement, must be read together or separately; (2) Whether the plaintiff-director served the entity at the request of the company or for … Continue Reading

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. Cons. No. 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
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