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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

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 rejects claim under the Deceptive Trade Practices Act

Any newcomer to Delaware would note the proliferation of business names containing some variation on “Diamond State” or “Blue Rock” – and, as the Court of Chancery recently noted in its letter opinion in Diamond State Tire, Inc. v. Diamond Town Tire Pros & Auto Care, Inc., C.A. No. 11550-VCS (August 15, 2016), the inclusion of … 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 Useful 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 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

Request for Interim Fee Award Denied and Representative Plaintiff Disqualified

In a pair of related decisions issued on the same day, June 29, 2016, the Court of Chancery in Smollar v. Potarazu (here and here) made the unusual move of disqualifying a derivative plaintiff and his counsel, and granting a motion to intervene brought by another stockholder who sought to become the representative plaintiff. Key Issues Addressed … 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

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
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