Archives: Chancery Court Updates

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Chancery Addresses Indemnification for Affirmative Claims of Directors

The Delaware Court of Chancery recently addressed an issue of importance to directors of companies as well as those interested in corporate litigation. In the case of Dore v. Sweports, Ltd., C.A. No. 10513-VCL (Del. Ch. Jan. 31, 2017), the court addressed situations where a director conceivably could be indemnified for fees incurred in pursuing an … Continue Reading

Court Addresses Whether Unclean Hands Bars Advancement

Justin M. Forcier, an associate in the Delaware office of Eckert Seamans, prepared this overview. The Court of Chancery recently addressed whether unclean hands may be a recognized defense to advancement actions.  Hankinson v. Pike Holdings Inc., C.A. No. 12730-CB (Del. Ch. Nov. 15, 2016) (telephonic transcript ruling). Background:  Plaintiff was a director and CEO of … Continue Reading

Chancery Issues Additional Advancement and Indemnification Rulings in Quiznos Restructuring

Alexandra D. Rogin, an Eckert Seamans associate, prepared this overview. The Court of Chancery issued two opinions relating to a web of advancement and indemnification claims brought on behalf of multiple, separate plaintiffs: (1) Meyers v. Quiz-Dia LLC, C.A. No. 9878-VCL (Del. Ch. Jan. 9, 2017); and (2) Meyers v. Quiz-Dia LLC, C.A. No. 9878-VCL … Continue Reading

Chancery Denies Quasi-Appraisal Remedy and Discusses Notice Requirements for Short-Form Merger Transaction

Alexandra D. Rogin, an Eckert Seamans associate, prepared this overview. In the Court of Chancery’s opinion styled, In re United Capital Corp. Stockholders Litigation, C.A. No. 11619-VCMR (Del. Ch. Jan. 4, 2017), the plaintiff sought a quasi-appraisal remedy for purported breaches of disclosure in connection with a short-form merger transaction.  In granting the defendants’ motion … Continue Reading

Court Grants Dismissal Based on First-Filed Rule

Justin M. Forcier, an associate in the Delaware office of Eckert Seamans, prepared this overview. With the ever-increasing globalization of business, readers will appreciate this Court of Chancery opinion discussing dismissal based on the first-filed rule.  Gramercy Emerging Markets Fund, et al. v. Allied Irish Banks, P.L.C. et al., C.A. No. 10321-VCG (Del. Ch. December … Continue Reading

Chancery Provides in Depth Analysis of Fair Value Determination in Appraisal Proceeding

Alexandra D. Rogin, an Eckert Seamans associate, prepared this overview. The thorough 75-page post-trial decision in Merion Capital L.P. v. Lender Processing Servs., Inc., C.A. No. 9320-VCL (Dec. 16, 2016), is a must read for those involved in appraisal proceedings.  In the memorandum opinion, Vice Chancellor Laster provides a comprehensive analysis of the fair value … Continue Reading

Chancery Rejects Fee-Shifting for Forum Selection Clause

The recent Chancery decision invalidating a fee-shifting bylaw in connection with a forum selection provision was the subject of an article authored by my colleagues Gary Lipkin, Justin Forcier and Alexandra Rogin, which appeared this week in the Delaware Business Court Insider. The article appears below. In Solak v. Sarowitz [C.A. No. 12299-CB (Del. Ch. Dec. … Continue Reading

Chancery Grants Stay and Refers Indemnification Claims to Arbitrator to Determine Arbitrator’s Jurisdiction

Alexandra D. Rogin, an Eckert Seamans associate, prepared this overview. In Meyers v. Quiz-Dia LLC, C.A. No. 9878-VCL (Dec. 2, 2016), the Chancery Court stayed indemnification claims to determine whether they were arbitrable. Background: This matter involves the perenial issue of arbitrability.  Plaintiffs sued three Quiznos sandwich shop entities for indemnification and advancement pursuant to … Continue Reading

Chancery Dismisses Action for Lack of Personal Jurisdiction over LLC and LLC Owners

Alexandra D. Rogin, an Eckert Seamans associate, prepared this overview. In IMO Dissolution of Arctic Ease, C.A. No. 8932-VCMR (Dec. 9, 2016), the Chancery Court rejected personal jurisdiction under Delaware’s Limited Liability Company Act and the conspiracy theory of jurisdiction.  The Court provides helpful guidance on when someone can be considered an LLC manager for purposes of … Continue Reading

Court Rejects Derivative Claims Failing Pleading Standards of Rule 23.1

Justin M. Forcier, an associate in the Delaware office of Eckert Seamans, prepared this overview. This Court of Chancery decision provides useful guidance on the prerequisites for filing derivative claims and satisfying Rule 23.1. Kops v. Hassell, et al., C.A. No. 11982-VCG (Del. Ch. Nov. 30, 2016). Background: Kops brought a derivative suit on behalf … Continue Reading

Chancery Orders Arbitration Pursuant to Email Agreement

Gomes v. Karnell, C.A. No. 11814-VCMR (Nov. 30, 2016) Alexandra D. Rogin, an Eckert Seamans associate, prepared this overview. A recent Chancery Court opinion enforced an agreement to arbitrate based on an email exchange. Background: This matter involves a dispute between three members of an LLC over the validity of an arbitration agreement.  The parties … Continue Reading

Chancery Bars Fraud Claim Based on Anti-Reliance Clauses

Key Legal Issue Addressed: Whether a purported disclaimer of extra-contractual representations protected a business seller from fraud claims? Answer: Yes, based on the circumstances found in the case of  IAC Search, LLC v. Conversant LLC, C.A. No. 11774-CB (Del. Ch. Nov. 30, 2016). This Delaware Court of Chancery opinion should be in the toolbox of every commercial … Continue Reading

Claims Barred Pursuant to Settlement Agreement and Res Judicata.

Justin M. Forcier, an associate in the Delaware office of Eckert Seamans, prepared this overview. Background:  In 2005, iHeartCommunications (“iHC), as the parent company of Clear Channel Outdoor Holdings, Inc. (“CCOH”), initiated an initial public offering of CCOH’s common stock.  Prior to the IPO, however, iHC and CCOH entered into several intercompany agreements (the “Agreements”) … Continue Reading

Chancery Upholds Ambiguous Non-Compete Provision in Sales Contract

Alexandra D. Rogin, an Eckert Seamans’ associate, prepared this overview. A recent Delaware Court of Chancery post-trial opinion held that while an ambiguous non-compete agreement was enforceable, the defendants had not violated its terms.  Therefore, the Court determined that its earlier injunction was improvidently granted. Brace Indus. Contracting, Inc. v. Peterson Enters., et al., C.A. … Continue Reading

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
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