Tag Archives: Section 225

Chancery Addresses Disclosure Obligations in Connection with Directors’ Elections

Red Oak Fund, L.P. v. Digirad Corp., C.A. No. 8559-VCN (Del. Ch. Aug. 5, 2013). Issue Addressed: In the context of a challenge to the election of directors, the Court of Chancery considered claims that the disclosure obligations of the directors were breached. Short overview: This short letter opinion in the context of a Section … Continue Reading

Chancery Bars Claims Based on “Issue Preclusion” Doctrine

TR Investors, LLC v. Genger, C.A. No. 6697-CS (Del. Ch. Feb. 18, 2013). Issue addressed: Whether the doctrine of “issue preclusion” prevented the relitigation of issues previously decided, and thus supported the grant of a motion for summary judgment. Short answer: Yes. Short Overview This 58-page opinion chronicles the long and tortuous procedural history of … Continue Reading

Chancery Addresses Charitable Nonstock Corporations and De Facto Directors

Hockessin Community Center, Inc. v. Swift, C.A. No. 7789-VCL (Del. Ch. Oct. 5, 2012). This decision is most useful for its treatment of nonstock corporations and de facto directors, although it also features enlightening historical anecdotes about important civil rights struggles in Delaware during the early 1950s. Delaware does not have a separate statute for … Continue Reading

Chancery Dismisses Part of Fiduciary Claim that Sought Removal of Director Based on Inherent Equitable Power of Court

Shocking Technologies, Inc. v. Michael, C. A. No. 7164-VCN (Del. Ch. April 10, 2012). Issue Addressed: Whether the Court of Chancery has the inherent authority to remove a director for breach of fiduciary duty, other than via DGCL Section 225?  Short answer:  The issue was not directly decided, but based on the facts of this case, the … Continue Reading

Chancery Rules on Motion to Disqualify and Motion to Revoke Pro Hac Vice Admission; Addresses Legal Ethics Violations; Requires Disclosure of Potential Conflicts in Future Pro Hac Vice Motions

Manning v. Vellardita, C.A. No. 6812-VCG (Del. Ch. March 28, 2012), is an important decision of the Delaware Court of Chancery on legal ethics as applied to non-Delaware attorneys who appear before the Court pro hac vice. Issues Addressed: Whether lack of complete candor to the Court in a Motion for Admission Pro Hac Vice … 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

Court of Chancery Validates Written Consents in Section 225 Action; Finds Directors Breached Fiduciary Duty in Issuance of Preferred Shares

 In Johnston v. Pedersen, C. A. No. 6567-VCL (Del. Ch. September 23, 2011), read opinion here, the Court in a post-trial decision, found that that the defendant directors breached their fiduciary duties when issuing the Series B Preferred Stock and as a result, the holders of the Series B Preferred were not entitled to a … Continue Reading

Chancery Determines Both Valid Directors and Valid Shareholders in Section 225 Action and also Explains Proper Statutory Formalities that Must be Strictly Followed for Stock Split

Blades v. Wisehart, C.A. No. 5317-VCS (Del. Ch. Nov. 17, 2010), read 34-page opinion here. Issues Decided In this action pursuant to DGCL Section 225, the Court of Chancery addressed whether unanimous written consents validly removed the defendant directors from the board and whether the same written consents validly elected new directors for a company … Continue Reading

Chancery Grants Motion To Intervene in Contested Stock Issuance Case

Noe v. Kropf, 2008 Del. Ch. LEXIS 148 (Oct. 15, 2008), is a Chancery Court decision that discusses the factors under Chancery Court Rule 24  applicable to a motion to intervene. This case involved a shareholder who sought to intervene because the original plaintiff was requesting from the Court a declaration that the stock owned by the … Continue Reading