Archives: Chancery Court Updates

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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 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: (i) a director may be exposed to personal liability even when ostensibly acting on behalf of a corporation in … Continue Reading

Chancery Will Decide Claims Based on Law of India

The Delaware Court of Chancery in Pipal Tech Ventures Private Limited v. MoEngage, Inc., C.A. No. 10381-VCG (Del. Ch. Dec. 17, 2015), applies the overwhelming hardship standard to deny a motion to dismiss based on a forum non conveniens argument even when the location of most of the events, witnesses and applicable law support the litigation taking place in … Continue Reading

Doctrine of Laches Bars Quasi-Appraisal Remedy

In Houseman v. Sagerman, C.A. No. 8897-VCG (Del. Ch. Nov. 19, 2015), the Delaware Court of Chancery described the form of remedy known as a quasi-appraisal. The Court of Chancery explained that quasi-appraisal is not itself a cause of action, but is instead a remedy that, where appropriate, awards stockholders damages based on the going-concern value … Continue Reading

Director Who Was Tricked into Resigning Reinstated

In Martin v. Med-Dev Corp., C.A. No. 10525-VCP (Del. Ch. Oct. 27, 2015), the Court of Chancery  invalidated the resignation of a director who was tricked into resigning from his board position, and the Court reinstated him as chairman. The Court’s opinion is also notable for its discussion of what steps must be taken for … Continue Reading

Chancery Determines that BJR Applies Instead of Revlon Standard

The Court of Chancery in the recent decision styled In re Zale Corporation Stockholders Litigation, C.A. No. 9388-VCP (Del. Ch. Oct. 29, 2015), in a rare grant of a motion for reargument pursuant to Rule 59, dismissed a financial advisor after the court had previously denied the same motion to dismiss the financial advisor. The current ruling is … Continue Reading

Chancery Enforces Covenant Not To Compete

The Chancery opinion in Revolution Retail Systems, LLC v. Sentinel Technologies, Inc., C.A. No. 10605-VCP (Del. Ch. Oct. 30, 2015), discusses many issues in connection with the breach of contract for the sale of a business. The sale involved an ongoing collaborative relationship. Although Texas law applied to many aspects of the case, the court cited … Continue Reading

Facebook’s Mark Zuckerberg Required to Follow Corporate Formalities

The Delaware Court of Chancery yesterday held, on a question of first impression, that a controlling stockholder must formally ratify a self-dealing transaction by a vote at a meeting of stockholders or by written consent in order to shift the standard of review from entire fairness to the business judgment rule.  In Espinoza v. Zuckerberg, … Continue Reading

Chancery Dismisses Challenge to Board Decision to Settle Claims

In Shaev v. Adkerson, C.A. No. 10436-VCN (Del. Ch. Oct. 5, 2015), the Delaware Court of Chancery dismissed claims for breach of fiduciary duty including the disclosure obligations of the board which granted stock units valued at approximately $35 million in connection with its decision to settle potential claims that could have been brought for … Continue Reading

Chancery To Be Less Likely to Approve Fees in Disclosure Only Cases

In re Riverbed Technology, Inc., Stockholders Litigation, Cons. C.A. No. 10484-VCG (Del. Ch. Sept. 17, 2015). This Delaware Court of Chancery opinion is noteworthy because it provides notice to corporate litigators in Delaware that any future requests for court approval of a class action settlement, or for attorneys’ fees in connection with a class action … Continue Reading

Court Strikes Impertinent Portion of Complaint

In Carlyle Investment L.L.C. v. Moonmouth Company S.A., C.A. No. 7841-VCP (Del. Ch. Sept. 10, 2015), the Delaware Court of Chancery grants the rare motion to strike a part of the complaint that the court considers scandalous or impertinent pursuant to Court of Chancery Rule 12(f). See Slip op. at 45-46. In addition, the court addresses other topics of interest … Continue Reading

Court of Chancery Addresses Discovery Conduct

The Court of Chancery recently reiterated its expectations of Delaware discovery conduct at a hearing in Medicalgorithmics S.A. v. AMI Monitoring, Inc., C.A. No. 10948-CB (Transcript).  Notable among the Court’s comments at the hearing were: The Court stressed the importance of attorney review of documents before production, saying that, absent a “quick-peek” agreement, attorney involvement should … Continue Reading

Post-Trial Intervention Denied

The Court of Chancery rejected a request for post-trial intervention under Court of Chancery Rule 24, in the matter styled Shawe v. Elting, et al., C.A. No. 9686-CB (Del. Ch. Sept. 2, 2105). Rule 24 is a useful rule to be familiar with for corporate and commercial litigation in general. This is the third decision in this case … Continue Reading

Rare Rejection of Advancement Claim

In the recent Chancery decision of Lieberman v. Electrolytic Ozone, Inc., C.A. No. 10152-VCN (Del. Ch. Aug. 31, 2015), the court rejected claims for advancement by former officers and directors who sought to have their former company pay for the attorneys’ fees they incurred in defending a suit brought against them by the company for whom … Continue Reading

Chancery Determines Proper Board Members in Section 225 Action

The Delaware Court of Chancery in Kerbawy v. McDonnell, C.A. No. 10769-VCP (Del. Ch. Aug. 18, 2015), addresses whether written consents of stockholders were effective in replacing the board members of the company involved.  The case features the interplay between DGCL § 225 and § 228 in this corporate litigation over control of the company. DGCL … Continue Reading

Short Observation on Long Delaware Chancery Decisions

Based on the more than ten years that I have been highlighting corporate and commercial decisions on these pages, primarily from Delaware’s Supreme Court and Court of Chancery, I am aware that the main reason busy readers visit these pages is not for metaphysical ruminations. This short observation has at least some practicality. Over the last three weeks or … Continue Reading
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