Archives: Chancery Court Updates

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Court of Chancery Has Power to Issue Bench Warrant for Violation of Court Order

The recent Delaware Court of Chancery opinion in Deutsch v. ZST Digital Networks, Inc., C.A. No. 8014-VCL (Del. Ch. June 14, 2018), addresses the court of equity’s authority to issue arrest warrants to enforce its orders. But because it involves facts that are so unusual, for purposes of a short blog post, the only aspect of the decision that is … Continue Reading

Court Explains When Dual Claims for Breach of Fiduciary Duty and Breach of Contract Can Be Pursued

In a recent Delaware Court of Chancery decision in Edinburgh Holdings, Inc. v. Education Affiliates, Inc., C.A. No. 2017-0500-JRS (Del. Ch. June 6, 2018), the court addressed certain procedural rules that should be of interest to corporate and commercial litigators to the extent that the court explains when certain causes of action may or may … Continue Reading

Chancery Defines Key Principles of Corporate Litigation

A recent decision of the Delaware Court of Chancery provides useful definitions and explanations for well-established principles applicable to corporate litigation. The opinion in Steinberg v. Bearden, C.A. No. 2017-0286-AGB (Del. Ch. May 30, 2018), involves claims that a board of directors and two of its officers breached their fiduciary duties by making or permitting … Continue Reading

Chancery Denies TRO: Prevents Minority from Limiting Rights of Controlling Redstone Family

In a high-profile expedited control contest covered on the front page of The Wall Street Journal and most of the major media outlets covering business, law or Hollywood, the Court of Chancery denied the request for a TRO by a minority stockholder that sought to thwart the efforts of the Redstone family from exercising its … Continue Reading

Chancery Addresses Contractually-Defined Fiduciary Duty in LLC Agreement

A recent Delaware Court of Chancery decision addressed claims against the manager of an LLC that required the interpretation of an exculpatory clause and contractually-defined fiduciary duties in the LLC Agreement. MHS Capital LLC v. Goggin, C.A. No. 2017-0449-SG (Del. Ch. May 10, 2018). Brief Background Facts: The detailed facts of this opinion fill about … Continue Reading

Missed Notice Deadline Bars Contract Claim for Escrow Funds

A recent decision of the Delaware Court of Chancery provides a cautionary tale for corporate and commercial litigation practitioners about the importance of complying with contractual notice deadlines. In PR Acquisitions, LLC v. Midland Funding LLC, C.A. No 2017-0465-TMR (Del. Ch. April 30, 2018), the court barred a claim made for funds held in escrow … Continue Reading

Dissolved LLC Revived Due to Inadequate Reserves for Claims

Any commercial or corporate litigator who needs to pursue claims against a dissolved entity should read the recent Delaware Court of Chancery opinion in Capone v. LDH Management Holdings LLC, C.A. No. 11687-VCG (Del. Ch. April 25, 2018). In essence, the court nullified the certificate of cancellation that had dissolved the LLC in this case because … Continue Reading

Mere Act of Forming Delaware Entity Not Basis for Personal Jurisdiction

A recent decision from the Delaware Court of Chancery provides practical insights into the requirements for imposing personal jurisdiction in Delaware over non-residents involved in the formation of a Delaware entity. The act of forming a Delaware entity only, without more, is not sufficient to impose personal jurisdiction in Delaware over a non-resident involved in the formation. The … Continue Reading

Chancery Addresses Scope of Director Consent Statute and Civil Conspiracy Claims

In the context of cross-claims of fraudulent inducement by parties to a merger, the Court of Chancery discussed several principles of Delaware law that serve as useful references for those involved in corporate and commercial litigation.  The opinion in LVI Group Investments, LLC v. NCM Group Holdings, LLC, C.A. No. 12067-VCG (Del. Ch. Mar. 28, … Continue Reading

Delaware Contract Interpretation Principles

Recent decisions of the Delaware courts have provided arguments for considering a broader approach to the more traditional “four corners of the document” view of contract interpretation for so-called unambiguous agreements.  The recent Chancery decision in Plaze, Inc. and Apollo Aerosole Industries LLC v. Callas, C.A. No. 2017-0432-TMR (Del. Ch. Mar. 29, 2018), addresses contract … Continue Reading

Chancery Discusses Revlon in Context of Granting Option to Sell Company

The Delaware Court of Chancery addressed a bevy of basic corporate litigation principles in the context of claims challenging the actions of directors, and determining which standards of review apply, and which procedural prerequisites need to be satisfied. In Carr v. New Enterprise Associates, Inc., C.A. No. 2017-0381-AGB (Del. Ch. Mar. 26, 2018), claims for … Continue Reading

The Business Judgment Rule and DGCL Section 144

A recent decision of the Delaware Court of Chancery discusses the interplay between the business judgment rule and section 144 of the Delaware General Corporation Law (DGCL). Section 144 provides some defenses to what would otherwise be easily challenged, conflicted transactions involving directors. Professor Stephen Bainbridge, well known to readers of this blog and often … Continue Reading

Non-Compete Clause Not Enforced Due to Prior Breach of Employer

A recent Delaware Court of Chancery decision is helpful for anyone seeking to defend or enforce a non-compete agreement that prohibits a former employee from competing with her former employer. In the case of Physiotherapy Corporation v. Moncure, C.A. No. 2017-03960-TMR (Del. Ch. Mar. 12, 2018), the court refused to enforce a non-compete provision against … Continue Reading

Court Denies Application for Interlocutory Appeal or Alternatively Entry of Partial Final Judgment Pursuant to Rule 54(d).

This post was prepared by Justin M. Forcier, an associate in the Wilmington, Delaware office of Eckert Seamans. The recent decision of the Court of Chancery in REJV5 AWH Orlando, LLC v. AWH Orlando Member, LLC, C.A. No. 2017-JRS (Del. Ch. Feb. 28, 2018), is a reminder of how rarely interlocutory appeals are granted. Background: … Continue Reading

Derivative Suit Dismissed Despite Board’s Failure to Follow Best Practices

The best way to explain the noteworthiness, for those engaged in corporate litigation, of the recent Delaware Chancery decision in Wilkin v. Narachi, C.A. No. 12412-VCMR (Del. Ch. Feb. 28, 2018), is to quote from the Court’s introduction: “This case … is a prime example of the difference between a best practice and a legal obligation  … Continue Reading

Chancery Grants Books and Records Request Based on Allegations in DOJ Complaint

This post was prepared by Brian E. O’Neill, Esq. of Eckert Seamans. The Court of Chancery recently granted a Section 220 request for corporate records based almost entirely upon allegations contained in a complaint lodged by the U.S. Department of Justice (“DOJ”) against UnitedHealth., in the matter of In re UnitedHealth Group, Inc. Section 220 … Continue Reading