Archives: Chancery Court Updates

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Court Limits Director’s Access to Corporate Records

A corporate director’s access to corporate records was restricted by the Delaware Court of Chancery in a recent corporate litigation decision that I discussed in my latest regular column that appears in the current edition of the publication of the National Association of Corporate Directors, called Directorship. The Court’s decision in Bizzari v. Suburban Waste Services, Inc., … Continue Reading

Chancery Provides Practice Tip

In a recent letter ruling, the Delaware Court of Chancery provided a practice tip for those engaged in litigation before the court who seek an extension of the word-limit for briefs: Don’t present the court with a “Morton’s Fork.” That is, don’t make the court choose between two equally unappealing alternatives by waiting until the … Continue Reading

Court Imposes Costs and Fees, Sua Sponte, in Connection with Motion to Compel

Justin M. Forcier, an associate in the Delaware office of Eckert Seamans, prepared this overview. A recent Chancery decision provides practical tips for litigators regarding the use of general objections in response to interrogatories and document requests. In addition to striking numerous objections, the seller of a company (“Seller”) was recently awarded, sua sponte, costs … Continue Reading

Court Describes Board Duty of Oversight

The Delaware Court of Chancery recently provided an exemplary explanation of Delaware law on the requirements that must be met before directors can be found liable for breaching their duty of oversight. Reiter v. Fairbank, C.A. No. 11693-CB (Del. Ch. Oct. 18, 2016). Key Background Facts: This case involved a claim that the board of directors … Continue Reading

Chancery Dismisses Challenge to Board’s Dissolution Plan

Alexandra D. Rogin, an Eckert Seamans’ associate, prepared this overview. A recent Chancery opinion held that stockholder approval and the business judgment rule barred fiduciary duty claims against a board that dissolved the company. The Huff Energy Fund, L.P. v. Gershen, C.A. No. 11116-VCS (Del. Ch. Sept. 29, 2016) Background: The Delaware Court of Chancery … Continue Reading

Chancery Reviews Pre-Suit Demand Requirements

A recent Delaware Court of Chancery opinion provides practical instruction for corporate litigators regarding the difference between a direct v. derivative claim as well as an analysis of the requirements under Rule 23.1, and an application of the two-prong test in Aronson v. Lewis to satisfy the prerequisite of pre-suit demand futility.  Chester County Employees’ Retirement Fund v. New Residential Investment Corp., C.A. … Continue Reading

Chancery Dismisses Claims Challenging Merger; Applies BJR

Justin M. Forcier, an associate in the Delaware office of Eckert Seamans, prepared this post. The Delaware Court of Chancery recently held that because a majority of the fully informed, uncoerced, disinterested stockholders voted to approve a merger, the directors were entitled to deferential review under the business judgment rule (“BJR”).  In re OM Group, … Continue Reading

Court Grants Motion to Dismiss Previously Released Claims

Justin M. Forcier, an associate in the Delaware office of Eckert Seamans, prepared this post. In Geier v. Mozido, LLC, C.A. No. 10931-VCS (Del. Ch., Sept. 29, 2016), the Court of Chancery granted Mozido, LLC (“LLC”) and Mozido, Inc.’s (“Inc.”) motion to dismiss claims by plaintiff Philip Geier (“Geier”) because Geier released his claims against … Continue Reading

Chancery Awards Injunctions and Damages for Breach of Non-Compete and Non-Solicitation Agreements

Alexandra D. Rogin, an associate at Eckert Seamans, prepared this overview. The Delaware Court of Chancery recently granted injunctive and monetary relief based on the parties’ contractual agreements and obligations. This case involves two Delaware entities that own school meal management software: inTEAM Associates, LLC (“inTEAM”), and Heartland Payment Systems, Inc. (“Heartland”). The action stems … Continue Reading

Pre-Close v. Post-Close Disclosure Claims

A recent Chancery opinion addressed several key legal principles with broad application to corporate and commercial litigation in Delaware. In Nguyen v. Barrett, C.A. No. 11511-VCG (Del. Ch. Sept. 28, 2016), the court addressed several notable topics in connection with claims challenging a merger agreement. For example, the court explained what was needed to successfully … Continue Reading

Extra-Contractual Claims Barred

This Court of Chancery decision provides a useful example of those circumstances in which the express terms of a contract serve as a barrier for claims of fraud, misrepresentation and related claims that are dependent on statements or other facts outside the four corners of an agreement. Flores, et al. v. Strauss Water Ltd., C.A. … Continue Reading

Former CEO Entitled to Advancement and Fees on Fees under the Delaware LLC Act.

Justin M. Forcier, an associate in the Delaware office of Eckert Seamans, prepared this overview. The Court of Chancery recently granted advancement of fees in Harrison v. Quivus Sys., Inc., C.A. No. 12084-VCMR (Del. Ch. Aug. 5, 2016) (TRANSCRIPT), based on the more flexible language of the Delaware LLC Act as compared with the more … Continue Reading

Court Rejects Section 220 Demand for Corporate Records

This Delaware Court of Chancery opinion is notable for denying, after trial, a demand for books and records of a publicly held company for purposes of valuation and to seek documents under Section 220 to investigate alleged mismanagement based on Caremark claims.  Beatrice Corwin Living Irrevocable Trust v. Pfizer, Inc., C.A. No. 10425-JL (Del. Ch. … Continue Reading

Delaware Primer on BJR Applicability and Stockholder Ratification

Why Notable: This Delaware Chancery decision is essential reading for those involved in corporate litigation who need to know under what circumstances uncoerced and informed stockholder approval will cleanse the vote of a conflicted board and entitle it to the defense of the business judgment rule (BJR) – – when no controlling stockholder is involved either … Continue Reading

Chancery Applies 3-Year Contract Statute of Limitations

Justin M. Forcier, an associate in the Delaware office of Eckert Seamans, prepared this overview. The latest Delaware opinion in long-running litigation in this case granted partial summary judgment as a result of the claims for breach of contract being subject to the three-year statute of limitations for contracts. AM General Holdings LLC v. The Renco … Continue Reading

Non-Signatory Still Bound by Contract

The Delaware Court of Chancery recently addressed important contract principles, including when a non-signatory will be bound by a contract, as well as burden of proof standards and requirements to establish damages, that have wide application for corporate and commercial litigation, in Medicalgorithmics S.A. v. AMI Monitoring, Inc., C.A. No. 10948-CB (Del. Ch. Aug. 18, 2016). … Continue Reading

The Transitive Property of Entity Litigation

In a recent ruling destined to be referred to often, the Delaware Court of Chancery provided the analysis used, in the context of a closely-held company, to determine an award of attorneys’ fees in representative corporate litigation. It is most notable for its discussion of the infrequently discussed concept of the “transitive property of entity … Continue Reading
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