Tag Archives: business judgment rule

Key 2013 Delaware Corporate and Commercial Decisions

Top Ten 2013 Delaware Corporate and Commercial Decisions By: Francis G.X. Pileggi and Kevin F. Brady This is our ninth annual review of key Delaware corporate and commercial decisions. During 2013, we reviewed and summarized over 200 decisions from Delaware’s Supreme Court and Court of Chancery on corporate and commercial issues. Among the decisions with … Continue Reading

BJR Protected Allegedly Interested Director Transaction; When Section 220 Tolls Statute of Limitations

Sutherland v. Sutherland, C.A. No. 2399-VCN (Del. Ch. May 30, 2013). Issue Addressed:  Whether certain directors violated their fiduciary duties by benefiting from a system of charging for administrative expenses for personal matters that was more favorable to certain directors. Short Answer:  No. Background: Many prior Delaware decisions in this long-running internecine family business dispute have … Continue Reading

Key Corporate and Commercial Delaware Decisions for First Five Months of 2013

Among the key corporate and commercial Delaware decisions that we have highlighted on these pages during the first five months of 2013, the following decisions either clarified existing Delaware law or announced new law on important substantive or procedural topics. This is a supplement to the annual review of cases we have provided on this … Continue Reading

Chancery Applies Business Judgment Rule to Freezeout by Majority Shareholder

In Re MFW Shareholder Litigation, C.A. No. 6566-CS (Del. Ch. May 29, 2013). Issue Addressed: What standard of review should apply to a going-private merger conditioned upfront by the controlling stockholder on approval by both a properly empowered, independent committee and an informed, uncoerced majority-of-the-minority vote. Short Answer: When a controlling stockholder merger has, from the … Continue Reading

Delaware Fiduciary Duty of Disclosure Explained by Chancery

In re Wayport, Inc. Litigation, Cons., C.A. No. 4167-VCL (Del. Ch. May 1, 2013). Issues Addressed: Among the several issues addressed in this case, the most noteworthy is a fulsome discussion and restatement of the fiduciary duty of disclosure that directors and majority shareholders owe to other existing shareholders from whom they are purchasing or selling … Continue Reading

Chancery Penalizes Obstruction in Efforts to Take Deposition

Cartanza v. Cartanza, C.A. No. 7618-VCP (Del. Ch. April 16, 2013). Issue Addressed:  Whether attorneys’ fees should be awarded due to defense counsel obstructing the efforts of opposing counsel to depose his client. Short Answer: Yes. Brief Overview This letter ruling is a useful tool for the toolbox of any litigator.  In essence, defense counsel … Continue Reading

Chancery Addresses Right to Direct Claim for Dilution of Minority Shareholders

Carsanaro v. Bloodhound Technologies, Inc., C.A. No. 7301-VCP (Del. Ch. March 15, 2013). This 76-page Chancery decision addresses issues that include the following: (1) when a claim for dilution of minority shares can be pursued directly instead of, or in addition to, derivately; (2) restrictions imposed by DGCL Section 160 on the right to redeem … Continue Reading

Chancery and Proxy Puts

Kallick v. Sandridge Energy, Inc., C.A. No. 8182-CS (Del. Ch. Mar. 8, 2013). The highly regarded corporate law scholar Professor Larry Hamermesh has provided his insights on this decision in  highlights available on his blog at The Institute of Delaware Corporate & Business Law. The entire post follows: Chancellor Strine’s March 8, 2013 opinion in Kallick v. SandRidge … Continue Reading

Key Delaware Corporate and Commercial Decisions in 2012

Noteworthy 2012 Corporate and Commercial Decisions from Delaware’s Supreme Court and Court of Chancery. By: Francis G.X. Pileggi and Kevin F. Brady. Introduction This is the eighth year that we are providing an annual review of key Delaware corporate and commercial decisions. During 2012, we reviewed and summarized over 200 decisions from Delaware’s Supreme Court … Continue Reading

Key Corporate and Commercial Decisions in the 2nd and 3rd Quarters of 2012

Key corporate and commercial decisions that we have highlighted, with commentary, over the last few months (roughly the 2nd and 3rd quarters of 2012), are compiled at the hyperlinks below for the convenience of our readers. Supreme Court Upholds $2 Billion Judgment and $300 Million Fee Award LP Member Protected from Self-Interested Transaction by Terms of LP Agreement … Continue Reading

The Borders of Revlon Duties

In re Synthes, Inc. S’holder Litig., C.A. No. 6452-CS (Del. Ch. Aug. 17, 2012). This recent opinion by Chancellor Leo Strine, Jr. from the Court of Chancery includes a discussion of the contours of  fiduciary duties that were announced many years ago in the Delaware Supreme Court’s Revlon decision. Professor Stephen Bainbridge has already provided scholarly … Continue Reading

Chancery Decides: Not Per Se Breach of Fiduciary Duty for a Board to Fail to have a Succession Plan.

Zucker v. Andreessen, C.A. No. 6014-VCP (Del. Ch. June 21, 2012). Issues Presented (1) Whether a $40 million severance package for the CEO of Hewlett-Packard, who could have been terminated for cause, constituted corporate waste; and (2) Whether the failure of the board to have a clearly defined succession plan in place was a breach … Continue Reading

Key Delaware Corporate and Commercial Decisions in First 4 Months of 2012

The following key Delaware corporate and commercial decisions from the first four months of 2012 are a follow-up to our summary of the key decisions that we featured from 2011. We highlight on these pages all the corporate and commercial opinions from Delaware’s Supreme Court and Court of Chancery, and we have chosen the following 2012 rulings … Continue Reading

Chancery Rejects Motion for Attorneys’ Fees Based on Complaint Mooted by Actions of Board

Freedman v. Adams, C.A. No. 4199-VCN (Del. Ch. March 30, 2012). Issue Addressed The Court of Chancery addressed the standard for awarding attorneys’ fees when there has been a stipulated dismissal of a derivative action which was largely mooted by measures taken by the defendant board of directors shortly after the complaint was served. Background The complaint … Continue Reading

Chancery Denies Motion to Dismiss Claims for Breach of Fiduciary Duty in Connection with Merger

Frank v. Elgamal, C.A. No. 6120-VCN (Del. Ch. March 30, 2012).  See summary of prior Chancery decision in this matter highlighted on these pages. Issue Addressed Whether it was premature to rule on a fiduciary duty claim based on the entire fairness standard, at the motion to dismiss stage. Answer:  Yes. Summary of Holding In this challenge … Continue Reading

Chancery Denies (Again) Injunctive Relief in Challenge to Conflicted Merger with Premium Price

In re Delphi Financial Group Shareholder Litigation, Cons. C.A. No. 7144 -VCG (Del. Ch. Mar. 6, 2012). This is the third Delaware Court of Chancery decision in as many weeks that denied injunctive relief, in an expedited opinion, in response to a challenged transaction–despite criticism in two of the cases, of the process and the players, but … Continue Reading

Noteworthy 2011 Corporate and Commercial Decisions from Delaware’s Supreme Court and Court of Chancery

Noteworthy 2011 Corporate and Commercial Decisions from Delaware’s Supreme Court and Court of Chancery. By:  Francis G.X. Pileggi and Kevin F. Brady. Introduction This is the seventh year that we are providing an annual review of key Delaware corporate and commercial decisions. During 2011, we reviewed and summarized approximately 200 decisions from Delaware’s Supreme Court … Continue Reading

Duties of Directors of Wholly-Owned, Financially Troubled Subsidiaries

Professor J. Haskell Murray of the Regent University School of Law, a former law clerk for the Delaware Court of Chancery, has published a paper on an issue about which the Delaware courts have not yet provided clear and unambiguous guidance. An excerpt from an abstract of the professor’s paper, titled: ‘Latchkey Corporations’: Fiduciary Duties in Wholly Owned, … Continue Reading

Court of Chancery Dismisses Breach of Fiduciary Duty, Waste and Caremark Claims Challenging Goldman Sachs Compensation Structure

In the case of In Re The Goldman Sachs Group, Inc. Shareholder Litigation, C.A. No. 5215-VCG (Oct. 12, 2011), read opinion here, Vice Chancellor Glasscock, in his first major corporate law decision, granted defendants’ motion to dismiss a derivative action brought against Goldman’s current and former directors for failure to make a pre-suit demand. At … Continue Reading

Chancery Denies Motion to Dismiss Claims Alleging Breach of Duty of Loyalty against Directors in Sale of Company

New Jersey Carpenters Pension Fund v. infoGROUP, Inc., C.A. No. 5334-VCN (Del. Ch. Sept. 30, 2011), read initial opinion here and revised opinion here Issue Addressed Whether directors breached their duty of loyalty in connection with the sale of a company based on their domination and/or intimidation by the largest shareholder.  Background This case involved the … Continue Reading

Bainbridge on Chandler’s Citigroup Decision

Professor Bainbridge provides scholarly commentary here on the recent Chancery Court decision in Citigroup, including a rebuttal to Professor Jay Brown and an analysis of Caremark duties, as well as a discussion of the theoretical and practical underpinning of the Business Judgment Rule. My prior highlighting of the Citigroup case and a link to the … Continue Reading
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