The most comprehensive description in a Delaware decision in several decades of the broad and flexible authority of the Court of Chancery to fashion an appropriate customized equitable remedy was provided, with bountiful citations to authority and treatises, in the recent decision styled In Re Oxbow Carbon LLC Unitholder Litigation, C.A. No. 12447-VCL (Del. Ch. Aug. 1, 2018). Several of the prior decisions in this case providing more detailed factual background were highlighted on these pages previously.
This opinion contains the type of all-inclusive coverage of a topic that deserves to be treated with the same reverence one would afford a frequently-consulted reference book that should be readily accessible in the “tool box” of those involved in corporate or commercial litigation who might need to quote authority for the capacious scope of the Court of Chancery’s flexible and customized equitable remedial powers.
The most important parts of the opinion, with the broadest potential applicability for corporate and commercial litigation, include the following:
- The decision includes the most encyclopedic description in a Delaware opinion, with the most citations to authority and other scholarly sources, about which this writer is aware, of the doctrinal underpinning and public policy reasons, as well as historical origin, of the copious and flexible authority of the Court of Chancery to fashion appropriate equitable remedies customized to the circumstances of each case. See pages 4 through 8. Compare a relatively recent Chancery decision addressing the same general topic in a much more abbreviated fashion, highlighted on these pages.
- The court describes the prerequisites for the discretionary remedy of specific performance. See pages 8 and 9.
- The court explains how its flexibility to fashion an appropriate remedy is available to modify the typical limitations of the remedy of specific performance–to the extent that the court is not constrained to order performance of a contract exactly as the contract is written, but instead may provide a more customized type of specific performance. See page 13.
- In connection with its authority to both fashion a customized remedy and to monitor enforcement or execution of the court’s judgment and remedial decision, the court provides an extensive analysis, with plentiful citations to authority, of its power to appoint an independent monitor to oversee the implementation of its judgment (as opposed to a receiver). See pages 16 to 21.
POSTSCRIPT: In January 2019, the Delaware Supreme Court granted in part and reversed in part this decision.