Francis Pileggi

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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

Chancery Explains Policy Reasons for Awarding Advancement to Former Director

The Delaware Court of Chancery’s opinion in Marino v. Patriot Rail Company LLC, C.A. No. 11605-VCL (Del. Ch. Feb. 29, 2016), is noteworthy for providing the most detailed historical analysis and doctrinal underpinning for the legislative scheme that requires corporations under certain circumstances to provide advancement to former directors and officers, that has come along in … Continue Reading

Supreme Court Rejects Claims Against Directors

The Delaware Supreme Court, in a short Order issued not long after oral argument, rejected the arguments on appeal that challenged a decision of the Court of Chancery that dismissed claims that directors were beholden to those that they had business relationships with. Greater Pennsylvania Carpenters’ Pension Fund v. Giancarlo, et al., No. 531-2015, Order … Continue Reading

Supreme Court Expands Basis to Sue Directors and Officers in Delaware

The Delaware Supreme Court recently interpreted the statutory basis for imposing jurisdiction over directors and officers of Delaware corporations in a manner that is broader than the interpretation that previously prevailed in Delaware courts for the last 30 years. Hazout v. Tsang, No. 353, 2015 (Del. Supr., Feb. 26, 2016). Directors and officers of Delaware … Continue Reading

Delaware Allows Claims Based on Extra-Contractual Statements About Merger

Allegations are commonly made that representations outside the four corners of the parties’ agreement about a merger or similar deal were untrue, and the buyer relied to his detriment on them. A recent decision from the Delaware Court of Chancery addresses the types of provisions in an agreement that could bar such claims for misrepresentation based on extra-contractual … Continue Reading

RIP Justice Scalia

U.S. Supreme Court Justice Antonin Scalia has gone to his eternal reward. The front page of The New York Times today quoted Court of Appeals Judge Richard Posner as writing in 2011 that Justice Scalia was “the most influential justice of the last quarter century.” Whether you agreed with his views or not, he was in … Continue Reading

Delaware High Court Rejects Claims Against GM Directors

Frank Reynolds of Thomson Reuters reports on the Delaware Supreme Court’s recent affirmance of a Chancery ruling which dismissed claims against GM directors. He reports that: Dissident General Motors investors have failed to persuade the Delaware Supreme Court to give them another chance to prove the automakers’ directors negligently relied on a defect reporting system … Continue Reading

Chancery Determines that Electronically Stored Information and Personal Emails of Directors Must Be Provided to Stockholders

The Delaware Court of Chancery published an opinion this week that includes electronically stored information as part of the “books and records” that a stockholder can demand from a corporation and its directors and officers. Amalgamated Bank v. Yahoo!, Inc., C.A. No. 10774-VCL (Del. Ch. Feb. 2, 2016). It also addresses the duties of directors … Continue Reading

Chancery Awards Fees for Therapeutic Benefit Originating in a Ruling That Bylaw Amendment Not Applicable to Prior Stockholders

In a recent ruling from the bench, the Court of Chancery approved fees for a therapeutic benefit that had its genesis in a ruling from March 2015, that was previously highlighted on these pages in the matter of Strougo v. Hollander, and which determined that a bylaw amendment would not apply to former stockholders when … Continue Reading

Chancery Sounds Death Knell for Most Disclosure-Only Settlements

The Delaware Court of Chancery recently issued a seminal decision that may signal the end of (at least) most disclosure-only settlements in class action cases that challenge mergers. In Re Trulia Inc. Stockholder Litigation, C.A. No. 10020-CB (Del. Ch. Jan. 22, 2016), is must reading for those interested in class action settlements in general, and disclosure-only settlements in particular. Michael … Continue Reading

Chancery Dismisses Non-Exculpated Claim with Prejudice

In the recent Court of Chancery opinion in the matter of In re EZCORP Inc. Consulting Agreements Derivative Litigation, C.A. No. 9962-VCL (Del. Ch., Jan. 15, 2016), Delaware’s equity court explains in scholarly detail the doctrinal underpinnings of the due process rights of non-parties to a case, including members of a class that have not been certified. … Continue Reading

Chancery Clarifies Director Liability for Corporate Acts and Enforceable Provisions Barring Misrepresentation Claims

A noteworthy opinion by the Delaware Court of Chancery should be read by all those who need to be, or should be, concerned about the latest iterations of Delaware law that elucidate the circumstances in which: (1) a director may be exposed to personal liability even when ostensibly acting on behalf of a corporation in … Continue Reading
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