Archives: Chancery Court Updates

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Few Court Filings Meet Confidentiality Requirements

For those who need to understand the prerequisites for, and limitations of, maintaining court filings as confidential, the recent Delaware Court of Chancery opinion must be read in the matter styled:  In re Appraisal of Columbia Pipeline Group, Inc., Cons. C.A. No. 12736-VCL (Del. Ch. Aug. 30, 2018). Issue addressed: This decision describes when documents … Continue Reading

Chancery Interprets Certificate of Designations for Preferred Stock Rights

A recent Delaware Court of Chancery decision provides many useful statements of Delaware corporate law. The opinion in the matter of  Cedarview Opportunities Master Fund, L.P. v. Spanish Broadcasting System, Inc., C.A. No. 2017-0785-AGB (Del. Ch. Aug. 27, 2018), extends to 57-pages, but for purposes of this short blog post, I intend to highlight only … Continue Reading

LLCs are Not Only Creatures of Contract

The Delaware Court of Chancery recently addressed the challenged removal of an LLC manager and the validity of written consents. In Godden v. Franco, C.A. No. 2018-0504-VCL (Del. Ch. Aug. 21, 2018), the court explained several important principles that the Delaware courts use to analyze issues in the LLC context and interpretive rules involving LLC … Continue Reading

Right to Redeem Shares Survived Merger

The Court of Chancery in a recent decision addressed the issue of whether a “put right” that a company did not have sufficient funds to honor when exercised, was enforceable against the surviving company after a merger when the surviving company had the funds needed. The Court of Chancery answered this question in the affirmative … Continue Reading

Chancery Rejects TRO Request to Enjoin Defamatory Statements

The Delaware Court of Chancery, relying on precedent, rejected a request for a TRO to enjoin future defamatory statements by one business partner against another, primarily because of constitutional principles prohibiting prior restraint of free speech rights protected by the First Amendment–especially in the procedural posture of a preliminary injunction or TRO, without a full … Continue Reading

Application of Revised MFW Framework

A recent post on the Harvard Law School Corporate Law Blog, (on which I have published several articles as a contributing author), reviewed the Court of Chancery’s decision in Olenik v. Lozinski, C.A. 2017-0414-JRS (Del. Ch. July 20, 2018), in which a modification of the “ab initio” requirement of the MFW framework was applied in order for the … Continue Reading

Court Describes Required Pretrial Disclosure of Scope of Expert Testimony/Opinions

A recent decision of the Delaware Court of Chancery provides clarification on the amount of pretrial disclosure required in order for an expert’s testimony at trial not to be stricken. Project Boat Holding, LLC v. Bass Pro Group, LLC, C.A. No. 12606-VCS (Del. Ch. Aug. 10, 2018).  This opinion addresses a point of practical importance not only … Continue Reading

Chancery Denies Motion to Dismiss Earn-Out Claim Due to Ambiguity

One of the more common forms of commercial litigation continues to be disputes regarding earn-out formulas for post-closing payments due if certain milestones are met.  The Delaware Court of Chancery decision in Fortis Advisors LLC v. Stora Enso AB, C.A. No. 12291-VCS (Del. Ch. Aug. 10, 2018), involved a motion to dismiss earn-out claims.  Background: The … Continue Reading

Chancery Provides Comprehensive Explanation of the Broad Scope and Flexibility of its Equitable Remedial Powers

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. … Continue Reading

Chancery Instructs on Anti-Reliance Clauses that Bar Extra-Contractual Fraud Claims

The Delaware Court of Chancery recent provided explicit guidance to drafters of M&A agreements and those that litigate such agreements, to the extent that it provides clarion instruction on the prerequisites for contractual clauses that will bar extra-contractual claims for fraud. In the case styled ChyronHego Corporation v. Wight, C.A. No. 2017-0548-SG (Del. Ch. July 31, … Continue Reading

Chancery Explains Limitations on Right of Directors to Corporate Information

In the latest iteration of the ongoing litigation involving CBS Corporation and its controlling stockholder, the Court of Chancery recently provided a textbook summary of the general rule that directors have the right to unfettered access to corporate data, with three general exceptions. In the case styled In re CBS Corporation Litigation, Consol. C.A. No. … Continue Reading

Court of Chancery Explains the Phrase “Sound Business Practices” in L.P. Agreement

A recent Delaware Court of Chancery opinion explained the meaning of undefined terms in a limited partnership agreement which required the general partner in the Limited Partnership to use “best efforts” and “sound business practices.” In connection with claims that the general partner breached the agreement, the court in Wenske v. Blue Bell Creameries, Inc., … Continue Reading

Chancery Addresses Indemnification Claim

The Delaware Court of Chancery in Daugherty v. Highland Capital Management, L.P., C.A. No. 2017-0488-SG (Del. Ch. June 29, 2018), primarily addressed the issue of laches and equitable tolling that constituted the majority of the 29-page decision, but the last two pages relating to indemnification are the most memorable parts of the opinion.  The procedural history … Continue Reading

Chancery Applies Entire Fairness Standard to Transaction with Controller

A recent Court of Chancery opinion provides a useful reiteration of the reasons why the entire fairness standard will apply to a transaction between a controller and a controlled corporation. The case of In Re Hansen Medical, Inc. Stockholders Litigation, C.A. No. 12316-VCMR (Del. Ch. June 18, 2018), arose from a squeeze-out merger.  The court addressed … Continue Reading

Chancery Awards Interim Fees Based on Fee-Shifting Contract Provision

A recent letter ruling of the Delaware Court of Chancery awarded interim fees based on a fee-shifting contract provision, prior to the final conclusion of the case, based on pre-trial rulings on issues covered by the fee-shifting clause. In Sparton Corporation v. O’Neil, C.A. No. 12403-VCMR (Del. Ch. June 18, 2018), the court addressed that fee issue … Continue Reading

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
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