Archives: Delaware Supreme Court Updates

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Supreme Court Affirms Akorn Decision

The Delaware Supreme Court, in Akorn, Inc. v. Fresenius Kabi AG, et al., Del. Supr., No. 535, 2018 (Dec. 7, 2018), affirmed in a 3-page order, two days after oral argument, the Court of Chancery’s 253-page decision which was highlighted on these pages, and which is thought to be the first Delaware decision to find that a “material adverse … Continue Reading

Delaware Supreme Court Clarifies MFW Standard for Application of Business Judgment Review to a Merger

The issue presented to the Delaware Supreme Court in Flood v. Synutra International, Inc., Del. Supr., No. 101, 2018 (Oct. 9, 2018), was whether it was proper for the Court of Chancery to apply the MFW standard by: “(i) allowing for the application of the business judgment rule if the controlling stockholder conditions its bid on both of the key procedural … Continue Reading

Chancery Filings Now Due at 5:00 p.m. Eastern Time in Non-Expedited Cases

As foreshadowed earlier in a post about a recent Delaware Supreme Court Order whose purpose was to promote a better work-life balance for lawyers and their staff, the Court of Chancery recently amended its Rule 79.2 to require most filings to be made by 5:00 p.m. Eastern Time in non-expedited cases. This does not apply to initial filings … Continue Reading

Delaware Supreme Court Issues Order to Improve Work/Life Balance

The Chief Justice of the Delaware Supreme Court issued an Order recently that seeks to improve work/life balance of both practicing lawyers and their staff. Among the most important aspects of the Order include the requirement that Delaware courts amend their rules and electronic filing policies to require all court filings in non-expedited matters, except … Continue Reading

Supreme Court Clarifies Contract Formation and Forum Selection Clause Principles

The Delaware Supreme Court recently clarified for the first time the test to be used in Delaware to determine whether a contract’s terms are sufficiently definite to create an enforceable contract. In Eagle Force Holdings, LLC v. Campbell, No. 399, 2017 (Del. Supr., May 24, 2018), the court addressed whether various documents signed by the … 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

Supreme Court Bars Wal-Mart Claims Based on Issue Preclusion

The Delaware Supreme Court recently issued an epic opinion, ending the lengthy saga of litigation involving efforts by some stockholders of Wal-Mart to pursue claims in connection with alleged improprieties relating to the Mexican subsidiary of Wal-Mart, in California State Teachers’ Retirement System v. Alvarez , Del. Super., No. 295, 2016 (Jan. 25, 2018).  Multiple prior decisions in this … 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

Supreme Court Rejects Earn-Out Claim

The recent Delaware Supreme Court decision in Exelon Generation Acquisitions, LLC v. Deere & Company, No. 28,2017 (Del. Supr., Dec. 18, 2017), reversed the trial court ruling and rejected an earn-out claim based on the application of well-settled contract interpretation principles. The specific contract terms that were interpreted are fairly sui generis and not widely … Continue Reading

Supreme Court Allows Challenge to Director Compensation Claims; Rejects Ratification Defense

In its first explicit clarification of Delaware law on stockholder ratification in many years, the Delaware Supreme Court provided a virtual restatement of the prerequisites for valid stockholder ratification of director actions. In doing so, Delaware’s High Court allowed a claim to proceed which challenged allegedly excessive director compensation.  In the case styled: In re Investors … Continue Reading

Fiduciary Duties in Limited Partnerships

For my latest column in Directorship, the publication of the National Association of Corporate Directors, I discuss a recent Delaware Supreme Court decision that addresses fiduciary duties as modified in the context of a limited partnership agreement. The case of Brinckerhoff v. Enbridge Energy Company was previously highlighted on these pages, but the opinion remains … Continue Reading

Supreme Court Dismisses Post-Closing Adjustment Claim

A recent Delaware Supreme Court decision dismissed a claim for post-closing adjustments to the purchase price for the sale of a company. Anecdotally, almost every merger or acquisition agreement that includes a purchase price that provides for an adjustment after closing for such things as net working capital or an earnout will generate a dispute.  The … Continue Reading

Delaware Supreme Court Addresses Contractual Fiduciary Standard

Last week the Delaware Supreme Court reversed its prior decision interpreting a master limited partnership agreement that provided what Delaware’s high court described as a contractual fiduciary standard.  The Court’s opinion is necessary reading for anyone who drafts or litigates alternative entity agreements that waive fiduciary duties but provide other contractual replacement standards.  In Brinckerhoff … Continue Reading

Supreme Court Defines “Commercially Reasonable Efforts”

The Delaware Supreme Court recently analyzed, for the first time, a common contractual standard in business agreements.  The legal meaning of the phrase “commercially reasonable efforts” does not enjoy clarity in the law. Lawyers and jurists alike should be excused if they view the law on this topic as not entirely self-evident.  The split decision … Continue Reading

Supreme Court Affirms Chancery Penalties for Litigation Misconduct

The Supreme Court’s recent affirmance of penalties imposed by the Delaware Court of Chancery for litigation misconduct is a useful tool for litigators of all stripes to brandish as an incentive for both their clients and opposing parties to comply with the rules of the road in connection with obligations to preserve evidence during discovery–and to … Continue Reading

Delaware Supreme Court Finds that Implied Covenant of Good Faith and Fair Dealing Requires Reversal

This Delaware Supreme Court decision must be read by anyone who hopes to understand the nuances of the rarely successful claim for breach of the implied covenant of good faith and fair dealing, especially in the context of a limited partnership agreement which waives all fiduciary duties. In Dieckman v. Regency GP LP, No. 208, 2016 (Del. … Continue Reading

Supreme Court Hears Argument on Impact of Decisions in Other Fora

The Delaware Supreme Court recently heard the appeal in a case involving the Lululemon company which addressed the impact of a decision in another forum on the ability of stockholder in a Delaware derivative suit to make the same or similar claims. Laborers’ District Council Construction Industry Pension Fund et al. v. Bensoussan et al., … Continue Reading

Supreme Court Clarifies Attorney Charging Liens

Readers of these pages who make their living by practicing law in private law firms will be interested in the recent Delaware Supreme Court opinion captioned Katten Muchin Rosenman LLP v. Sutherland, No. 151, 2015 (Del. Jan. 6, 2017). Others–not so much. Why would private lawyers care about this decision? Because, generally speaking, it will make it easier to collect … Continue Reading