Several new Chancery Court cases were published recently on the court’s website. Here are a few quick summaries of the issues addressed in those cases.
Zimmerman v. Braddock (Noble, VC, September 8, 2005) – The very limited issue addressed in this case is whether the court should grant a Motion for Leave to File a Second Amended Derivative Complaint. The only issue that the court had to decide regarding the amendment was whether such amendment would be futile because (1) the plaintiff’s claim against the defendants for breach of their fiduciary duties by engaging in insider trading and misappropriating confidential information, failed to state a claim as a matter of law, and (2) whether the Second Amended Complaint failed to assert well pled allegations to show that demand upon the Board would have been futile. The court determined that the plaintiff would be allowed to amend his Complaint. The court had previously dismissed the First Amended Complaint but despite Rule 15(aaa), the court determined that dismissal with prejudice would not “be just under the circumstances”, and therefore the dismissal of the First Amended Complaint was made without prejudice.

All Pro Maids, Inc. v. Layton (Parsons, VC, August 23, 2005) – This case determined an application for attorneys’ fees made approximately one year after judgment was entered in favor of the plaintiffs. The application for fees covered costs and time charges after judgment was entered on breach of an employment contract which specifically allowed for attorneys’ fees. The application for fees included work done in post-trial discovery in aid of execution, as well as in an appeal before the Delaware Supreme Court which affirmed the trial court’s decision. The court granted the application for fees with a slight discount.
Haywood v. Ambase Corporation (Parsons, VC, August 22, 2005) – This is a decision, after trial, in a books and records demand under Section 220 of the Delaware General Corporation Law. The essence of the demand for books and records was based on a claim that the executives of the company were being paid excessive compensation and an expert in executive compensation prepared a report to buttress the claim and to compare the compensation with other comparable company executives. Although allowing the demand for books and records requested, after discovery, trial and post-trial briefing, the court declined a request to make the company pay for the attorneys’ fees of the plaintiffs, finding inapplicable the bad faith exception to the American Rule.