Tag Archives: Court of Chancery

Chancery Denies Request for Books and Records of Hewlett-Packard

Cook v. Hewlett-Packard Co., C.A. No. 8667-VCG (Del. Ch. Jan. 24, 2014)(revised Jan. 30, 2014). Issue Addressed: Was a stockholder entitled to additional books and records from Hewlett-Packard regarding accounting fraud at a company HP purchased? Answer: No Short Highlights This post-trial letter opinion from the Court of Chancery denying a request for books and … Continue Reading

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

Chancery Denies Claim For Advancement and Indemnification From Successor Entity

Grace v. Ashbridge LLC, C.A. No. 8348-VCN (Del. Ch. Dec. 31, 2013). Issue Addressed:  Whether a successor entity was liable for advancement and indemnification claims based on the operating agreement of a successor entity LLC even though the sole allegations involve a predecessor entity and a related entity. Short Answer:  No. Brief Overview:  An understanding … Continue Reading

Chancery Addresses State Law Insider Trading Claim for Second Time in Two Weeks

In Silverberg v. Gold, et al., C.A. 7646-VCP (Dec. 31, 2013), the Court of Chancery denied defendants’ motion to dismiss a derivative action (for failure to make demand) alleging a breach of fiduciary duty based on insider trading against the directors of Dendreon Corporation, a biotechnology company which had only one commercially available drug product, … Continue Reading

Chancery Determines Effectiveness of Written Consents of Stockholders pursuant to DGCL Section 228

Boris v. Schaheen, C.A. No. 8160-VCN (Del. Ch. Dec. 2, 2013). Issue Addressed:  Whether the written consents of stockholders pursuant to DGCL Section 228 effectively selected new board members. Brief Overview This 51-page post-trial decision addressed the effectiveness of written consents of stockholders that were designed to select new board members.  The two entities involved … Continue Reading

Chancery Exercises Jurisdiction in Dispute Among Shareholders of Foreign Corporation

Darby Emerging Market Fund, L.P. v. Ryan,  Consol. C.A. No. 8381-VCP (Del. Ch. Nov. 27, 2013). This Chancery decision addressed whether the Court had equitable jurisdiction over a dispute among shareholders of a foreign entity. Delaware’s court of equity relied on the well-worn “clean up doctrine”, which allows it to exercise equitable jurisdiction over an … Continue Reading

Appeal of Chancery Ruling on Ouster of CEO by Board

Klaassen v. Allegro Dev. Corp. et al., No. 8626-VCL (Del. Ch. Nov. 7, 2013). This Chancery decision is the subject of an appeal to the Delaware Supreme Court. Among the issues to be addressed by Delaware’s high court is whether the actions of a board to dismiss the CEO, who also had voting power over a controlling percentage … Continue Reading

Chancery Allows Claim for Breach of Fiduciary Duty for Approval of Stock Options in Violation of Stock Option Plan

Pfeiffer v. Leedle, C.A. No. 7831-VCP (Del. Ch. Nov. 8, 2013). Issue Addressed:  Whether the approval of stock option grants that exceeded the maximum number of stock options allowed under the stock incentive plan was the basis for a breach of fiduciary duty claim against both the board that approved it and the executive who … Continue Reading

Forum Selection Bylaw Provision Case: Appeal to Supreme Court Dismissed

We previously highlighted the Court of Chancery decision that upheld a forum selection provision in corporate bylaws that required certain suits involving the internal affairs of the corporation to be filed in Delaware. Boilermakers Local 154 Retirement Fund v. Chevron Corporation, C.A. No. 7220-CS (Del. Ch. June 25, 2013). Professor Larry Hamermesh writes about the voluntary … Continue Reading

Chancery Rejects Stockholder Demand to Hershey for Books and Records

Louisiana Municipal Police Employees’ Retirement System v. Hershey Co., No. 7996, Master’s Report (Del. Ch. Aug. 16, 2013). This decision rejected a demand for books and records of the Hershey Company based on DGCL Section 220. The stockholder claimed, in essence, that Hershey’s management must be complicit in the abhorrent child labor practices in the two West … Continue Reading

Chancery Determines Ownership Interest in LLC and Remedy for Breach of Fiduciary Duties

Grove v. Brown, C.A. No. 6793-VCG (Del. Ch. Aug. 8, 2013) Issues Addressed: This post-trial opinion addresses issues involved in a 4-person LLC whose members disputed: (1) what specific ownership interest each had in the LLC; (2) the impact of a member not contributing the required amount of start-up capital; (3) whether there was an … Continue Reading

Chancery Explains Safest Deal Structure to Defend M & A Challenges

Southeastern Pennsylvania Transportation Authority v. Volgenau, C.A. No. 6354-VCN (Del. Ch. Aug. 5, 2005) Issue addressed: This Chancery opinion explains the procedures to follow in order to benefit from the business judgment rule’s deferential standard of review for a merger that involves a controlling shareholder and a third-party. This decision provides a road map for … Continue Reading

Chancery Denies Expedited Proceedings for Challengers of Dell Deal

In re Dell Inc. Shareholder Litigation, No. 8329, hearing transcript released (Del. Ch. June 27, 2013). In a ruling from the bench, the Court of Chancery denied a request for expedited proceedings requested by challengers of the pending deal involving Dell. The plaintiffs failed to convince the court that they had a “colorable claim” that … Continue Reading

Delaware Court of Chancery Recites Standards Applicable to Non-Delaware Attorneys Admitted Pro Hac Vice

The Sequoia Presidential Yacht Group LLC v. FE Partners LLC, C.A. No. 8270-VCG (Del. Ch. July 5, 2013). Issue Addressed: In this short letter opinion, the Delaware Court of Chancery reiterated the standard of conduct that will be applied to non-Delaware attorneys who apply for admission pro hac vice to practice in Delaware courts The … Continue Reading

Chancery Upholds Bylaws with Forum Selection Clause

Boilermakers Local 154 Retirement Fund v. Chevron Corporation, C.A. No. 7220-CS (Del. Ch. June 25, 2013).  Issue Addressed: Enforceability of bylaws adopted by the Board of Directors providing that litigation relating to the internal affairs of the corporation must be filed only in Delaware. Short Answer:  Enforceability upheld.  See, e.g., 8 Del. C. § 109(a). Preface … 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

Court of Chancery Appoints Receiver to Conduct Annual Meeting

Rich v. Fuqi International, Inc., C.A. No. 5653-VCG (Del. Ch. June 12, 2013). Issue Addressed: Should a receiver be appointed to enforce an order to hold an annual shareholders’ meeting pursuant to DGCL section 211? Answer: Yes. Brief Background: The Court of Chancery previously ordered this company to hold a shareholders’ meeting pursuant to DGCL … 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