In Carlson v. Hallinan, download file, the Chancery Court clarified a 70-plus page opinion of only two months ago that addressed a buffet of corporate issues and which was summarized on this blog here. See 2006 WL 771722.
In this comparatively brief letter opinion, the court clarified its prior opinion because, in part, the parties’ counsel could not agree on the form of order to implement the prior opinion.
The court explained that based on the duty of a fiduciary to establish that they have properly dealt with corporate funds and other assets entrusted to their care, a breach of that duty requires that fiduciary to bear the full cost of an accounting ordered to remedy the breach of that duty.
However, in connection with the expense of a dissolution and receivership for the closely-held company, the court reasoned that the handful of owners would bear the cost in proportion to their ownership interests because one of the reasons for the dissolution was the inability of all the owners to “get along and play nice”; thus they should all bear the cost of the dissolution–keeping in mind the benefit they will all receive by the monetizing of their interests (especially the minority interests). On a procedural note, the court found that even if an argument is waived by not including it in post-trial briefs, the other party would still be required to prove their claim on that argument.