Francis Pileggi

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Fiduciary Duty Claims of Start-up Co-Founder Denied

A recent Delaware Court of Chancery opinion analyzed claims that are not uncommon: one of two founders of a start-up, that failed to launch, claimed that the other co-founder breached fiduciary duties by launching another start-up venture with a third-party who then pursued the business plan of the original start-up, but without the original co-founder.  In McKenna v. … Continue Reading

Chancery Refuses to Apply Garner Exception to Attorney/Client Privilege

A recent Delaware Court of Chancery decision is essential reading for anyone who seeks to apply the exception to the attorney/client privilege known as the Garner exception. Salberg v. Genworth Financial, Inc., C.A. No. 2017-0018-JRS (Del. Ch. July 27, 2017). Garner is known to corporate litigation practitioners as an exception to the general prohibition on the … Continue Reading

Lawyer Not Barred from Testifying as Witness

The latest Chancery decision in hotly contested litigation captioned In re Oxbow Carbon LLC Unitholder Litigation, Consol., C.A. No. 12447-VCL, (Del. Ch. July 28, 2017), addresses several issues that are of practical importance for all trial lawyers. Several prior Delaware decisions in this case that have been highlighted on these pages  provide additional background.  Among the … Continue Reading

Chancery Proposes Bright-Line Rule for Issue Preclusion Analysis in Derivative Actions

This post was prepared by Brian E. O’Neill, Esq. of Eckert Seamans The Court of Chancery has recently proposed, on remand from a Supreme Court reversal, that “issue preclusion” in the demand futility context should only apply after the prior plaintiff’s derivative claims have survived a Rule 23.1 motion to dismiss. In In re Wal-Mart … Continue Reading

Stock Transfer Restrictions Explained

A recent decision of the Delaware Court of Chancery needs to be consulted by anyone who seeks to fully understand the prerequisites under the Delaware General Corporation Law for effective restrictions on the transfer of stock. Henry v. Phixos Holdings, Inc., C.A. No. 12504-VCMR (Del. Ch. July 10, 2017). The prerequisites under DGCL Section 202 … Continue Reading

Relief Granted for Fraudulent Conveyance

The Court of Chancery recently addressed claims for fraudulent conveyance, and relief available for such claims, in Duffield Associates, Inc. v. Lockwood Brothers, LLC, C.A. No. 9067-VCMR (Del. Ch. July 11, 2017). Court of Chancery Rule 9(b) requires that averments of fraud or mistake shall be stated with particularity, as compared to other claims which … Continue Reading

Equitable Jurisdiction Found Lacking in Debt Action

The Delaware Court of Chancery is a court of equity with limited jurisdiction. Contrary to what some may assume, not all corporate and commercial litigation can be heard in this famous court. (Delaware’s trial court of general jurisdiction is the Superior Court.) A recent opinion has practical application for litigators to the extent that it applies the well-traveled, … Continue Reading

Fiduciary Duties in Limited Partnerships

For my latest column in Directorship, the publication of the National Association of Corporate Directors, I discuss a recent Delaware Supreme Court decision that addresses fiduciary duties as modified in the context of a limited partnership agreement. The case of Brinckerhoff v. Enbridge Energy Company was previously highlighted on these pages, but the opinion remains … Continue Reading

Corwin Cleansing Not Always a Sure Defense For Director Misconduct in the Merger Realm

This post was prepared by Brian E. O’Neill, Esq. of Eckert Seamans A recent article in Law 360 surveys three recent opinions in which the Court of Chancery rejected the Corwin cleansing doctrine in the merger context, in which the directors’ misconduct created various forms of coercion upon the stockholders.  The article entitled When Delaware … Continue Reading

Chancery Opinion Reviews Voting Agreements and Director Compensation

The recent decision from the Delaware Court of Chancery in Williams v. Ji, C.A. No. 12729-VCMR (Del. Ch. June 28, 2017), provides important insights into the Delaware law applicable to challenges to voting agreements among stockholders, as well as to director compensation packages. (By the way, Happy July 4th to all my loyal readers. We should all … Continue Reading

Supreme Court Dismisses Post-Closing Adjustment Claim

A recent Delaware Supreme Court decision dismissed a claim for post-closing adjustments to the purchase price for the sale of a company. Anecdotally, almost every merger or acquisition agreement that includes a purchase price that provides for an adjustment after closing for such things as net working capital or an earnout will generate a dispute.  The … Continue Reading

M&A Litigation: Standards of Review

A member of the Delaware Court of Chancery has penned a chapter for an upcoming book on stockholder litigation. An overview of the chapter was recently published on the Harvard Law School Corporate Governance Blog. This scholarly writing by Vice Chancellor J. Travis Laster is entitled: Changing Attitudes: The Stark Results of Thirty Years of Evolution … Continue Reading

Vice Chancellor Laster Opines on the Evolving Standard of Enhanced Scrutiny

This post was prepared by Brian E. O’Neill, Esq. of Eckert Seamans. In a post on the Harvard Law School Forum on Corporate Governance and Financial Regulation site, Vice Chancellor Travis Laster addressed the evolving standard of the enhanced scrutiny doctrine as applied to Delaware M&A litigation over the last 3 decades.  In Changing Attitudes: … Continue Reading

Challenge to State Bid Dispute Denied

Justin M. Forcier, an associate in the Delaware office of Eckert Seamans, prepared this overview. A recent Chancery decision provides guidance for attorneys seeking injunctive relief in connection with a bid dispute for a state contract pursuant to 9 Del. C. § 4725.  Charlie’s Waste Services, LLC v. Kent County Levy Court, C.A. No. 2017-0283-JRS … Continue Reading

Call for Scholarship on New Legal Ethics Rule

Some readers may be aware that for the last 20 years, I have written an ethics column for The Bencher, a publication of the American Inns of Court. One of my recent columns, on the newly adopted Model Rule of Professional Conduct 8.4(g), generated an unusual “letter to the editor” from the current president of the … Continue Reading

Chancery Allocates Merger Consideration Among Common and Preferred Stockholders

This post was prepared by Brian E. O’Neill, Esq. of Eckert Seamans. The Court of Chancery recently allocated merger consideration among common and preferred stockholders in an appraisal action involving no disputed facts. In In Re Appraisal of Goodcents Holdings, Inc., C.A. No. 11723-VCMR (Del. Ch. June 7, 2017), Vice Chancellor Montgomery-Reeves interpreted the certificate … Continue Reading

Chancery Clarifies Distinction Between Defective Corporate Acts and Unauthorized Corporate Acts

A recent Delaware Court of Chancery decision addressed an issue of first impression in connection with the types of “defective” corporate actions that initially were not approved properly, for example, due to lack of stockholder approval, but in some instances can still be ratified. Nguyen v. View, Inc., C.A. No. 11138-VCS (Del. Ch. June 6, 2017).  … Continue Reading

Chancery Denies Motion for Expedited Proceeding on Preliminary Injunction Due to Absence of Irreparable Harm

This post was prepared by Brian E. O’Neill, Esq. of Eckert Seamans. The Court of Chancery recently denied a plaintiff’s motion to expedite her preliminary injunction motion, which sought to delay a June 8, 2017 stockholders’ vote on Yahoo’s decision to sell its operating business to Verizon for $4.8 billion.  In Buch v. Filo, C.A. No. 10933-VCL … Continue Reading
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