Delaware case law is well-established regarding the aspect of the fiduciary duty of loyalty that prohibits a corporate director from usurping a corporate opportunity. A recent decision from the Delaware Court of Chancery applies that well-settled prohibition in a flexible manner to a set of facts that have apparently not been squarely addressed in prior precedent. … Continue Reading
A recent decision by the Delaware Court of Chancery provides an example of those rare instances where the court refers a violation of legal ethics to the Office of Disciplinary Counsel for investigation, as compared to the court itself determining the appropriate penalty. See Charter Communications Operating LLC v. Optymyze, LLC, et al., C.A. No. 2018-0865-JTL, … Continue Reading
A recent decision by the Complex Commercial Litigation Division of the Delaware Superior Court in Winshall, et al. v. Viacom International, Inc., C.A. No. N15C-06-137 EMD CCLD (Del. Super., Feb. 25, 2019), ruled that a claim for indemnification was not ripe until a final adjudication, after appeal, was decided. In a matter involving a claim … Continue Reading
Among the multitude of court decisions on DGCL Section 220 highlighted on these pages, a rare bird is the shifting of fees by the court based on the bad-faith exception to the American Rule. In a rare instance that should not be considered anything other than unusual, the Court of Chancery recently granted, in a transcript … Continue Reading
A recent short Order of the Court of Chancery reiterated one of the limitations on the right of a director to receive corporate information. In the latest installment of the internecine imbroglio in the litigation captioned Schnatter v. Papa John’s International, Inc., C.A. No. 2018-0542-AGB, Order, (Del. Ch. Feb. 25, 2019), the Court explained that DGCL … Continue Reading
A recent post-trial decision from the Delaware Court of Chancery denied a claim for corporate books and records based on DGCL § 220 after finding that there was no credible basis for wrongdoing to support the stated investigative purpose for the demand. Hoeller v. Tempur Sealy International, Inc., C.A. No. 2018-0336-JRS (Del. Ch. Feb. 12, … Continue Reading
A recent Court of Chancery decision is notable for its analysis of an issuance of shares approved by a sole director–but without stockholder approval. In the matter of Applied Energetics, Inc. v. Farley, C.A. No. 2018-0489-TMR (Del. Ch. Jan. 24, 2019), the court considered a somewhat unusual set of facts that included a shell corporation, at the time of … Continue Reading
A recent Delaware Court of Chancery decision addressed the important issue of the right of directors to be given access to corporate records. In Schnatter v. Papa John’s International, Inc., C.A. No. 2018-0542-AGB (Del. Ch. Jan. 15, 2019), Delaware’s court of equity considered a claim under Section 220(d) of the Delaware General Corporation Law (DGCL) … Continue Reading
A recent Delaware Court of Chancery decision determined that “words” prevailed over “numbers” when they appear next to each other as contract terms in a manner that is inconsistent and contradictory. In Fetch Interactive Television, LLC v. Touchstream Technologies, Inc., C.A. No. 2017-0637-SG (Del. Ch. Jan. 2, 2019), the court described in extensive detail the … Continue Reading
A recent transcript ruling by the Delaware Court of Chancery in Gasgarth v. TVP Investments, LLC, C.A. No. 2018-0621-JTL, transcript ruling (Del. Ch. Dec. 7, 2018), explained that the right to advancement was not extinguished by an amendment of a counterclaim to specifically withdraw breaches of fiduciary duty counterclaims and remove factual allegations relating to … Continue Reading
When the phrase “commercially reasonable efforts” appears as a standard of performance in contracts, it seems predetermined to generate litigation, and the recent Court of Chancery decision in Himawan v. Cephalon, Inc., C.A. No. 2018-0075-SG (Del. Ch. Dec. 28, 2018), supports that observation. Although the agreement in this case had a contractual definition for “commercially reasonable efforts”, prior … Continue Reading
A recent Delaware Court of Chancery decision provides noteworthy rulings on the limited scope of a Section 225 summary proceeding regarding the proper composition of the board of directors, as well as the notice requirements for a written consent in lieu of a stockholders’ meeting pursuant to Section 228 of the Delaware General Corporation Law … Continue Reading
A recent seminal decision of the Delaware Court of Chancery must be included in the lexicon of every lawyer who wants to understand the boundaries of Delaware law on forum-selection clauses in corporate documents. In the case of Sciabacucchi v. Salzberg, C.A. No. 2017-0931-JTL (Del. Ch. Dec. 19, 2018), the Court determined that a forum-selection clause … Continue Reading
A recent Court of Chancery decision explains when an agreement will be deemed ambiguous such that extrinsic evidence will be allowed, and related contract interpretation principles. Key Issue Addressed: The court, in Zayo Group, LLC v. Latisys Holdings, LLC, C.A. No. 12874-VCS (Del. Ch. Nov. 26, 2018), described the “real controversy” in the matter as … Continue Reading
The Delaware Court of Chancery recently resolved an issue about the scope of a release that was part of a settlement agreement. In Merging Europe Growth Fund, L.P. v. Figlus, C.A. No. 7936-VCMR (Del. Ch. Dec. 10, 2018), the court considered cross-motions to enforce a settlement agreement. One way to describe this case is “a … Continue Reading
The Delaware Court of Chancery recently had occasion to describe the important norms that lawyers are expected to follow, and the minimum standards of attorney conduct imposed on both Delaware and non-Delaware counsel who enter their appearance in a matter before the Court. See Lendus, LLC v. Goede, C.A. 2018-0233-SG (Del. Ch. Dec. 10, 2018). This case is noteworthy for a few reasons. … Continue Reading
A common theme in cases before the Delaware Court of Chancery involves a buyer and a seller of a business disagreeing about some aspect of the deal. So it was in the matter of Great Hill Equity Partners IV, L.P. v. SIG Growth Equity Fund I, LLLP, C.A. No. 7906-VCG (Del. Ch. Dec. 3, 2018). … Continue Reading
Why This Decision is Noteworthy: By comparison to some of the other corporate and commercial litigation issues addressed by the Court of Chancery, there remains a relatively modest number of court decisions that address whether an LLC should be dissolved based on the statutory standard that it is “not reasonably practicable” to carry on the LLC. … Continue Reading
The Court of Chancery recently explained the public policy reasons for enforcing discovery rules and scheduling deadlines, as well as explaining the types of penalties available for failure to comply with discovery obligations or deadlines. The key takeaways from the decision in Terramar Retail Centers, LLC v. Marion #2-Seaport Trust U/A/D June 21, 2002, C.A. … Continue Reading
A recent Chancery decision in the matter of In Re Tangoe Inc. Stockholders Litigation, Consol. No. C.A. 2017-0650-VCS (Del. Ch. Nov. 20, 2018), explained when the Corwin standard does not apply to cleanse a stockholder-approved transaction. Under Corwin, the Delaware Supreme Court held that the business judgment rule is invoked as the appropriate standard of review … Continue Reading
This synopsis was prepared by Mitchell Mengden, a law student at the Georgetown University Law Center. A recent Delaware Court of Chancery opinion outlines the applicable standards when challenging a board’s decision to reject a pre-suit demand. In Busch v. Richardson, C.A. No 2017-0868-AGB, (Del. Ch. Nov. 14, 2018), the court upheld a board’s decision to … Continue Reading
A recent Delaware Court of Chancery decision recognized that a non-signatory to an agreement may enforce the provisions of a forum-selection clause under certain conditions. Although this holding is counterintuitive, there are other Delaware decisions which recognize that in some circumstances a non-signatory to an agreement may either enjoy the benefits of that agreement or … Continue Reading
A recent Delaware Court of Chancery bench ruling provides guidance on two important procedural topics that do not enjoy a robust body of case law to illuminate the nuances that practitioners must be familiar with in connection with certain aspects of Chancery litigation. In the matter styled: In Re Morrow Park Holding LLC, Cons., C.A. No. 2017-0036-TMR (Del. … Continue Reading
A recent Delaware Court of Chancery opinion explained the risks associated with using prior material breach of a contract as a defense. In the matter of Post Holdings Inc. v. NPE Seller Rep LLC, C.A. No. 2017-0772-AGB (Del. Ch. Oct. 29, 2018), a complaint by the buyer of a business based on alleged fraud and misrepresentation sought indemnification … Continue Reading
