In a targeted proceeding pursuant to Section 225 of the DGCL with the limited purpose of determining whether members of the board of directors were properly removed, the Delaware Court of Chancery determined that the plaintiff did not establish its burden of proof to challenge the removal of board members. In Barbey v. Cerego, Inc
Section 225
16th Annual Review of Key Delaware Corporate and Commercial Decisions
16th Annual Review of Key Delaware Corporate and Commercial Decisions
By: Francis G.X. Pileggi and Chauna A. Abner
This is the 16th year that Francis Pileggi has published an annual list of key corporate and commercial decisions of the Delaware Supreme Court and the Delaware Court of Chancery. This list does not attempt to include…
Chancery Addresses Section 225 and Section 228 Issues
A recent Delaware Court of Chancery decision provides noteworthy rulings on the limited scope of a Section 225 summary proceeding regarding the proper composition of the board of directors, as well as the notice requirements for a written consent in lieu of a stockholders’ meeting pursuant to Section 228 of the Delaware General Corporation Law…
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…
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…
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…
Chancery Reopens Final Judgment to Allow Motion for Contempt
T.R. Investors, LLC v. Genger, C.A. No. 3994-CS (Del. Ch. Nov. 9, 2012).
Issue Addressed: Whether a final judgment in this case should be reopened under Chancery Rule 60(b)(6) in order for the prevailing party to present a motion for contempt due to the lack of compliance with the final order by the…
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…
Chancery Allows Challenge to Director Election to Proceed
Gentili v. L.O.M. Med. Int’l, Inc., C.A. No. 7600-VCG (Del. Ch. Aug. 17, 2012).
Issue: Whether non-unanimous written consents of shareholders were sufficient to thwart a challenge to the election of directors at an annual meeting?
Short answer: No.
Background:
This is a summary proceeding pursuant to DGCL Section 225 to…
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…