The analysis, in the context of a post-merger dispute, of the nuances of an indemnification provision and whether or not escrow funds should be released was the subject of a recent Delaware Court of Chancery decision in Reddy v. 2nd Chance Treatment Centers, LLC, C.A. NO. 2024-0193-SKR (Del. Ch., Dec. 12, 2024). Sitting by
Court of Chancery Updates
Removal of LLC Manager Upheld
By Francis Pileggi on
Posted in Court of Chancery Updates
In an expedited post-trial decision, the Delaware Court of Chancery recently determined who the proper managers were of an LLC, as well as the validity of the removal of a manager, pursuant to the summary proceedings provided for in Section 18-110 of the Delaware Limited Liability Company Act. In St. Peters, L.P. v. Bold On …
Chancery Rejects Musk’s Reasons to Revise Ruling on Tesla Pay Plan
By Francis Pileggi on
Posted in Court of Chancery Updates
Frank Reynolds, who has been covering Delaware corporate decisions for various national publications for over 35 years, prepared this article
The Delaware Court of Chancery recently declined to revise its January post-trial decision that the Tesla Inc. directors’ more than $55 billion pay package for CEO Elon Musk was a breach of duty that must…
Chancery Reviews Section 220 Basics
By Francis Pileggi on
Posted in Court of Chancery Updates
Aimee Czachorowski, an attorney in the Delaware office of Lewis Brisbois, prepared this post.
Chancellor McCormick’s recent letter decision in Floreani, et al. v. FloSports, Inc., C.A. No. 2023-0684-LM-KSJM (Del. Ch. Oct. 31, 2014), illustrates the pitfalls of non-compliance with the technical requirements of a Section 220 demand by a stockholder for corporate books…
Chancery Interprets Charter and DGCL to Allow Reincorporation in Nevada with Majority Vote
By Francis Pileggi on
Posted in Court of Chancery Updates
In a masterpiece of contract interpretation and statutory analysis, the Delaware Court of Chancery recently reconciled juxtaposed provisions in the Delaware General Corporation Law and a Certificate of Incorporation to allow a reincorporation of a Delaware company in Nevada with a majority vote—as compared to requiring a supermajority vote. Gunderson v. The Trade Desk, Inc…
Chancery Approves Merger of Distressed Company that Nets Zero to Common Stockholders
By Francis Pileggi on
Posted in Court of Chancery Updates
A recent Delaware Court of Chancery opinion addressed the not infrequent situation where a distressed company is sold or merged but only the preferred stockholders receive consideration—and the common stockholders receive nothing. In Jacobs v. Akademos, Inc., Del. Ch., C.A. No. 2021-0346-JTL (Del. Ch. Oct. 30, 2024), a scholarly work of art, the…
Chancery Enforces Release as Condition Precedent to Severance Payments
By Francis Pileggi on
Posted in Court of Chancery Updates
In a recent decision, the Delaware Court of Chancery determined that an agreement that required a release to be signed as a condition precedent to receiving severance benefits was enforceable, and that the failure to sign the release was a defense to the payment of severance benefits. An important aspect of this decision was that…
Chancery Clarifies Details Needed Under Rule 88 to Seek Fees
By Francis Pileggi on
Posted in Court of Chancery Updates
The Delaware Court of Chancery recently clarified the requirements of Rule 88 which refers to an affidavit that must be submitted when attorneys’ fees are requested from the Court. The short 2-page letter-ruling provides citations to authority and an explanation why the amount of time charged and the rates sought were not in proportion to…
Chancery rules conflicted dual fiduciaries must face derivative suit over Match spinoff
By Francis Pileggi on
Posted in Court of Chancery Updates
Frank Reynolds, who has been covering Delaware corporate decisions for various national publications for over 35 years, prepared this article
The Delaware Court of Chancery recently reconsidered most of its earlier dismissal of an investor challenge to IAC/InterActive Corp’s spinoff of its Match.com internet dating subsidiary after the state high court ruled that dual-position Match/IAC…
Delaware Court of Chancery Explains Nuances of Formal Opinion Letters
By Francis Pileggi on
Posted in Court of Chancery Updates
A recent Delaware Court of Chancery decision should be read by every lawyer who issues formal legal opinion letters—and those who litigate issues involving them. In Bandera Master Funds LP v. Boardwalk Pipeline Partners, LP, C.A. No. 2018-0372-JTL (Del. Ch. Sept. 9, 2024), the court amplified its earlier post-trial decision, highlighted on these pages…