Archives: Delaware Supreme Court Updates

Subscribe to Delaware Supreme Court Updates RSS Feed

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

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 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

Delaware Supreme Court Pens Must-Read Contract Decision

SIGA Technologies, Inc. v. PharmAthene, Inc., Del. Supr., No. 20, 2015 (Dec. 23, 2015). Why This Case Is Noteworthy: Any lawyer interested in the latest iterations of contract law by the Delaware Supreme Court needs to read this opinion. More specifically, any lawyer who advises clients on the binding nature or enforceability of letters of … Continue Reading

Top Three Delaware Corporate Decisions for 2015

For the last decade or so on these pages, I have selected annually the top Delaware corporate law decisions. This is a somewhat subjective exercise in light of the estimated 200 or more notable corporate and commercial decisions issued each year by Delaware’s Supreme Court and Court of Chancery. This year the top three Delaware corporate … Continue Reading

Delaware Supreme Court to Hear Argument on When Stockholders Can Demand Records of Aborted Merger

Tomorrow, the Delaware Supreme Court will hear oral argument on an appeal of the decision of the Court of Chancery which denied a request by a stockholder for books and records, pursuant to DGCL Section 220, related to the aborted merger of AbbVie, Inc., a pharmaceutical spin-off of Abbott Labs, and Shire, a pharmaceutical company based in Ireland. … Continue Reading

Delaware Supreme Court Rules on Director Independence

The Delaware Supreme Court issued two decisions a few days ago, in the Sanchez and Corwin cases. The Sanchez case addressed the topic of director independence and when pre-suit demand is excused in the context of long-term personal relationships. Prof. Usha Rodrigues provides scholarly insights on the Sanchez case that she graciously shared with us.  By way … Continue Reading

Delaware Supreme Court Addresses Standard of Review for Board’s Consideration of Stockholder Demand

The Delaware Supreme Court’s opinion in Espinoza v. Dimon, et al., No. 425, 2015 (Del. Sept. 15, 2015), addressed a certified question of corporate law from the United States Court of Appeals for the Second Circuit. Although the Delaware Supreme Court refused to provide a complete answer to the precise question presented, based on factual issues that … Continue Reading

Independent Directors Have New Ammunition to Obtain Dismissal of Suits

A recent Delaware Supreme Court decision that provides independent directors with a new basis to be dismissed from lawsuits against them, was highlighted in my latest article published in Directorship, the magazine of the National Association of Corporate Directors. The case is styled:  In re Cornerstone Therapeutics Inc. Stockholder Litigation, No. 564, 2014; Leal et al. … Continue Reading

Supreme Court Rejects Malicious Prosecution/Fee-Shifting Claim

Blue Hen Mechanical, Inc. v. Christian Brothers Risk Pooling Trust, Del. Supr., No. 589, 2014 (Del. June 15, 2015). This Delaware Supreme Court opinion has practical application for corporate litigators and civil litigators generally, due to the manner in which it addresses: (i) how to deal with suits filed allegedly in bad faith; and (ii) how to deal with a … Continue Reading

New Rules for Delaware Rapid Arbitration Act

Delaware’s newly adopted Rapid Arbitration Act, as previously explained on these pages, is intended to provide a procedure for expedited resolution of major commercial disputes, as an alternative to conventional corporate and commercial litigation, with assistance from the Court of Chancery to implement the parties’ agreement to follow the new procedure, subject to limited challenges on an expedited … Continue Reading

Delaware Supreme Court Clarifies Law on Dismissal of Claims Against Directors

The Delaware Supreme Court clarified the types of claims against independent directors that are eligible for a motion to dismiss regardless of the standard of review that applies to those claims. In re Cornerstone Therapeutics Inc. Stockholder Litigation, No. 564, 2014; Leal et al. v. Meeks et al., No. 706, 2014, opinion issued (Del. May … Continue Reading

Divided Supreme Court Upholds First-Filed Rule

The Delaware Supreme Court provided this week the latest iteration of Delaware law on the first-filed rule and whether a particular issue is covered by an arbitration clause. Over a vigorous dissent, Delaware’s high court affirmed a decision of the Delaware Court of Chancery that applied the first-filed rule to an arbitration proceeding that preceded … Continue Reading

Familial Relationships and Controlling Stockholders

An appeal pending before the Delaware Supreme Court addresses the impact of familial relationships on the independence of directors, as well as the classification of a group of stockholders as controlling stockholders for purposes of determining both pre-suit demand and the standard of review.  See Delaware County Employees’ Retirement Fund v. Sanchez, No. 702, 2014, … Continue Reading

Delaware Supreme Court: Mexican Law Applies

Bell Helicopter Textron, Inc. v. Arteaga, No. 333,2014 (Del. Supr., Apr. 6, 2015). This Delaware Supreme Court decision provides a useful application of principles that determine which jurisdiction’s laws apply to a particular suit with facts involving multiple fora. This split opinion concludes that the law of Mexico should apply to a lawsuit pending in Delaware state … Continue Reading

Delaware Supreme Court’s Latest Iteration of Implied Covenant of Good Faith and Fair Dealing

Nationwide Emerging Managers, LLC v. Northpointe Holdings, LLC, No. 441, 2014 (Del. Supr., Mar. 18, 2015). This Delaware Supreme Court opinion is notable for at least the following reasons: (i) it provides the latest iteration of Delaware law on the amorphous but important contract provision imposed by law on every Delaware contract: the implied covenant … Continue Reading
LexBlog