A review of key corporate and commercial cases from Delaware in 2009 follows in this post. Also, Francis Pileggi and Kevin Brady have written an article highlighting the “Top 5” key corporate and commercial cases for 2009 from Delaware’s Chancery Court and Supreme Court . The article, available here, first appeared in the Delaware Law Weekly. Their article about the top corporate and commercial cases in Delaware for the first six months of the year was published in the ABA’s Business Law Today magazine, available here. See also our review of 2009 cases in the NYU Law & Business Journal.
A review of key corporate and commercial decisions in Delaware for each of the last four years (2005 through 2008) has appeared on this blog for the benefit of litigators and lawyers who follow these areas of Delaware law. Each of those prior annual overviews can be accessed here.
In addition to the corporate and commercial cases from 2009 highlighted in the above-linked two articles, the following Delaware decisions that did not make it into our “top 5 article” from among the 260 or so corporate and commercial decisions in 2009 that we covered on this blog, nonetheless should be of interest to those who want to keep updated on the latest corporate and commercial rulings from Delaware’s Court of Chancery and Supreme Court.
The following format merely identifies the issues addressed in other noteworthy cases from 2009 and provides hyperlinks to a fuller overview of each case as well as a link to each opinion.
Delaware Supreme Court Opinions
Gantler v. Stephens. This Delaware Supreme Court decision made it clear that fiduciary duties are also imposed on officers of corporations in addition to directors.
General Motors Corporation v. Grenier. In this opinion, the Delaware Supreme Court addresses issues related to whether or not the trial court properly allowed expert testimony after a Daubert hearing.
Olson v. Halverson. This Delaware Supreme Court decision affirmed that the statute of frauds applies to oral LLC agreements that cannot be performed within one year.
Whittington v. Dragon Group LLC. The Delaware Supreme Court establishes a bright line rule in this opinion for the creation of “contracts under seal” to which a 20-year statute of limitations applies.
Delaware Court of Chancery Decisions
Case Financial, Inc. v. Alden, No. 1184-VCP (Del. Ch., Aug. 21, 2009). Chancery Court Discusses Procedural Requirements for Parent Corporation to Pursue Claims Against Directors of Wholly-Owned Subsidiary.
Concord Steel, Inc. v. Wilmington Steel Processing Co., Inc., No. 3369-VCP (Del. Ch. Sept. 30, 2009). Chancery Enforces Restrictive Covenant and Grants Permanent Injunction.
Duthie v. CorSolutions Medical, Inc., et al., No. 3048-VCN (Del. Ch., June 16, 2009). Chancery Court Modifies Advancement Award Based on Changed Circumstances.
eBay Domestic Holdings, Inc. v. Newmark, No. 3705-CC (Del. Ch. Oct. 29, 2009). Chancery Court Rejects Request for Fees and Costs Despite Granting Second Motion to Compel Discovery Against eBay. (This is only one of many pre-trial decisions in this case that was tried in December 2009).
JAKKS Pacific, Inc. v. THQ/JAKKS Pacific, LLC, No. 4295-VCL (Del. Ch. May 6, 2009). Chancery Court Denies Books and Records Demand for LLC.
Julian v. Julian, No. 4137-VCP (Del. Ch. Sept. 9, 2009). Chancery Court Addresses: Aiding and Abetting Fiduciary Duty of LLC Manager; Right of LLC Member to Resign; and Arbitrability. (This is one of several decisions in this matter.)
Latesco, L.P. v. Wayport, Inc., No. 4167-VCL (Del. Ch. July 24, 2009). Court of Chancery Rules on Issue of First Impression: Do Fiduciary Duties Apply in the Context of a Right of First Refusal Agreement Between a Corporation and its Shareholders.
Lola Cars Int’l Limited v. Krohn Racing, LLC, No. 3379-VCN (Del. Ch. Nov. 12, 2009). Court of Chancery Decides Fiduciary Duty Claims Against LLC Manager and Allows Dissolution Claim to Proceed and Clarifies Standards for Member to Seek Dissolution of LLC.
Mickman v. American International Processing, L.L.C., Del. Ch., No. 3869-VCP (July 28, 2009). Chancery Court Grants Access to General Ledger and Right to Obtain Photocopies Based on Terms of LLC Agreement but Denies a Request for Attorneys’ Fees. (A separate decision in this matter was highlighted on this blog here.)
NACCO Industries Inc. v. Applica Incorporated, No. 2541-VCL (Del. Ch. Dec. 22, 2009). Chancery Retains Jurisdiction over Claims of False Disclosures in Schedule 13D Filings Despite Federal Jurisdiction over Exchange Act Violations by Hedge Funds; and Allows Claim of Damages to Proceed Despite Payment of Termination Fee to Losing Bidder
State Line Ventures, LLC v. RBS Citizens, No. 4705-VCL (Del. Ch. Dec. 2, 2009). This letter decision of the Delaware Court of Chancery must be read by any Delaware lawyer serving as “local counsel”, and more importantly, should be required reading for any non-Delaware lawyer (or any out of state attorney) who requests a Delaware lawyer to be his or her “local counsel”.
Stockman v. Heartland Industrial Partners L.P., No. 4227-VCS (Del. Ch. July 14, 2009). Court of Chancery Grants Advancement Rights and Allows Indemnification Claims.
In Re: Trados Incorporated Shareholder Litigation, No. 1512-CC (Del. Ch. July 24, 2009). Post-Berger Class Action Survives Motion to Dismiss Where Common Stockholders Received Nothing and Preferred Stockholders Received $52 Million.
Triton Construction Co., Inc. v. Eastern Shore Electrical Services, Inc., No. 3290-VCP (Del. Ch. May 18, 2009). Chancery Addressed the Duty of Loyalty and other Fiduciary Duties of Departing Salaried Employees, as well as the Duty to Preserve Electronic Data and related claims.
Wayne County Employees’ Retirement System v. Corti, No. 3534-CC (Del. Ch. July 24, 2009). Court of Chancery Dismisses Fiduciary Duty Claims Regarding Vivendi Deal.
Xu v. Heckmann Corporation, No. 4673-CC (Del. Ch. October 26, 2009). Chancery Court Discusses Fiduciary Duty of Director to Disclose Information While Negotiating Release with Corporation and Whether Lack of Disclosure Could Invalidate the Release.
Five Recent Chancery Court Decisions on Electronic Discovery Issues.
Beard Research Inc. v. Kates, (May 29, 2009). Court Awards Fees For Spoliation of Evidence.
Grace Brothers Ltd. v. Siena Holdings, Inc. (June 2, 2009). Court Granted Motion to Compel Emails of Directors and Addresses Failure to Preserve
Omnicard Inc. v. Mariner Health Care Management Co.. (May 29, 2009).The Court Defines the Duty to Preserve Electronically Stored Information and Imposes Adverse Inference for Spoliation
TR Investors, LLC, et al. v. Genger, 2009 WL 4696062 (Dec. 9, 2009). The Court Imposed Harsh Penalties for Spoliation of Evidence in Violation of a Status Quo Order.
Triton Constr. Co., Inc. v. Eastern Shore Electrical Services, Inc. (May 18, 2009). The Court Addressed Spoliation of Evidence and the Duty to Preserve Evidence.