Archives: Chancery Court Updates

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Court Imposes Penalties for Failure to Fulfill Discovery Obligations

The Delaware Court of Chancery recently issued a decision that should be required reading for any lawyer that practices before it, whether they be Delaware counsel or non-Delaware counsel admitted pro hac vice, and whether they engage in corporate and commercial litigation or other types of cases before the court.  In the matter styled: In … Continue Reading

Chancery Interprets “Reasonable Efforts” Clause

Several recent Delaware decisions, as noted on these pages earlier this week here, and commented on here, have added to the case law that still only amounts to a relatively modest body of law in Delaware, interpreting the phrase: “reasonable efforts” and various permutations on that phrase, often found in post-closing earn out disputes but prevalent in … Continue Reading

Collection of Cases on Earn Out Disputes

A recent article on The Harvard Law School Corporate Governance Blog collected decisions, mostly based on Delaware law, that address Earn Out disputes, which generally involve agreements for the sale of a company that allow for post-closing payments subject to various milestones or revenue targets being satisfied. Commonly, the buyer of the company is required to use a … Continue Reading

Chancery Addresses Commercially Reasonable Efforts and Pre-Judgment Interest

A recent Delaware Court of Chancery opinion addressed issues that are of importance to commercial and corporate litigators. In CompoSecure, L.L.C. v. CardUX, LLC f/k/a Affluent Card, LLC, C.A. No. 1254-VCL (Del. Ch. revised Feb. 12, 2018), the court provided a thorough analysis of a contract dispute in a post-trial ruling that primarily relied on New Jersey … Continue Reading

Court of Chancery Rejects Efforts to Seek Attorneys’ Fees from Stockholder of Insolvent Corporation

In deciding an issue of first impression, the Delaware Court of Chancery in City of Miami General Employees’ and Sanitation Employees’ Retirement Trust v. C&J Energy Service, Inc., et al., C.A. No. 9980-CB (Del. Ch. January 23, 2018), addresses several principles that should be of interest to corporate litigators: A fee award, such as one … Continue Reading

Fraudulent Transfer Claims Allowed to Proceed After Account Drained

The letter ruling by the Delaware Court of Chancery in Daugherty v. Highland Capital Management, C.A. No. 2017-0488-SG, (Del. Ch. January 16, 2018), provides a helpful description of the elements of a fraudulent transfer claim and their application to facts involving efforts to escape collection efforts. Background Facts: The essential background facts involve allegations that … Continue Reading

Chancery Refuses Invitation to Apply Garner Exception to Attorney-Client Privilege

Anyone interested in the most complete and recent explanation of the Garner exception to the attorney-client privilege needs to read the Delaware Court of Chancery’s ruling in Buttonwood Tree Value Partners, L.P. et al. v. R.L. Polk & Co., Inc., et al., C.A. No. 9250-VCG (Del. Ch. Jan. 10, 2018). This letter ruling addresses a … Continue Reading

Chancery Rejects Contract-Based Claim for Attorneys’ Fees

Anyone seeking attorneys’ fees in Delaware based on a “prevailing party clause” in an agreement–who has not been completely and unequivocally vindicated in that litigation, needs to read the Chancery court ruling in the case styled: The Mrs. Fields Brand, Inc. v. Interbake Foods LLC, C.A. No. 12201-CB (Del. Ch. Jan. 5, 2018). In essence, citing … Continue Reading

13th Annual List of Key Delaware Corporate and Commercial Decisions for 2017

This is the 13th year that I have created an annual list of the key corporate and commercial decisions of the Delaware Supreme Court and the Delaware Court of Chancery. I chose the following rulings from among the more than 100 corporate and commercial decisions that have been highlighted on this blog over the past … Continue Reading

Violations of Directors’ Fiduciary Duty of Disclosure May Require Nominal Damages

A recent decision from the Delaware Court of Chancery examines the liability that directors may face for failing to fulfill their fiduciary duty of disclosure to stockholders—including mandatory nominal damages when the violation causes “impairment of economic or voting rights.” In Chatham Asset Management, LLC v. Papanier, C.A. No. 2017-0088-AGB (Del. Ch. Dec. 22, 2017), … Continue Reading

Chancery Partially Denies Books and Records Request

This post was prepared by Brian E. O’Neill, Esq. of Eckert Seamans. The Court of Chancery recently granted, in part, a request for books and records–largely based on the LLC’s operating agreement with respect to items subject to mandatory production, but denied the request for most of the items subject to discretionary production. In Aloha Power Company, LLC … Continue Reading

Chancery: Demand Futility Not Shown in Context of Caremark Claims

A recent decision of the Delaware Court of Chancery provides a scholarly and practical explanation of the onerous prerequisites that must be satisfied before a Caremark claim will meet the rigors of the demand futility analysis in order to justify the absence of pre-suit demand on the board. The 82-page decision in Oklahoma Firefighters Pension & Retirement … Continue Reading

Chancery Upholds Shortened Statute of Limitations (“Survival Clauses”) by Contract

A recent Delaware Court of Chancery opinion is an important tool for the toolbox of corporate and commercial litigators for upholding what the court refers to as “a survival clause”–which provides a contractually shortened period by which claims must be made. HBMA Holdings, LLC v. LSF9 Stardust Holdings LLC, C.A. No. 12806-VCMR (Del. Ch. Dec. 8, … Continue Reading

Chancery Enforces Choice of Law Clause

In connection with a recent decision granting a declaratory judgment to recognize the terms of and to enforce a loan, the Court of Chancery in the matter of Standard General L.P. v. Charney, C.A. No. 11287-CB (Del. Ch. Dec. 19, 2017), addressed several issues of practical importance to Delaware corporate and commercial litigators.  The background … Continue Reading

Court Explains When Breach of Contract and Breach of Fiduciary Duty Claims May Proceed in Tandem

A recent Delaware Court of Chancery opinion is useful for its explanation of those circumstances in which the court will allow both a breach of contract claim and a breach of fiduciary duty claim to be pursued in the same case against the same defendant.  See Capella Holdings, LLC v. Anderson, C.A. No. 9809-VCS (Del. … Continue Reading

Chancery Rejects Challenge to State Contract Bid Award

A recent Delaware Court of Chancery decision rejected a challenge by an unsuccessful bidder to an award by the state of a professional services contract. This decision provides a helpful example of how difficult it remains to challenge such bid awards. Many thanks to Deputy Attorney General Larry Lewis for bringing this opinion to our attention. We … Continue Reading

Chancery Denies Rule 5.1 Motion to Maintain Confidentiality of Pleadings

This post was prepared by Brian E. O’Neill, Esq. of Eckert Seamans. The Court of Chancery recently denied a motion to maintain the confidentiality of redactions in the public version of the complaint and briefs related to the defendants’ motion to dismiss. In Oklahoma Firefighters Pension Retirement System v. Corbat, C.A. No. 12151-VCG (Del. Ch. … Continue Reading

Court Rejects Pre-Trial Restrictions on Expert Testimony

A recent short letter ruling by the Delaware Court of Chancery provides a useful tool for the toolbox of commercial and corporate litigators regarding pre-trial arguments to exclude the testimony of an expert who has prepared a report, even though in the Court of Chancery motions in limine to obtain pre-trial rulings on such evidentiary issues are … Continue Reading