Archives: Other Court Decisions

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U.S. Supreme Court Addresses Discharge of Judgment for Breach of Fiduciary Duty

Bullock v. BankChampaign, N.A., No. 11-1518, 2013 U.S. LEXIS 3521 (U.S. May 13, 2013) Issue Addressed: This U.S. Supreme Court opinion considered whether a director found liable for a breach of fiduciary duty could discharge his debts related to that breach in Bankruptcy Court pursuant to 11 U.S.C. § 523(a)(4) of the Bankruptcy Code. The … Continue Reading

Appellate Court Addresses Advancement of Defense Costs in Criminal Proceeding

A recent California appellate court decision, Mt. Hawley Insur. Co. v. Lopez, addresses an important topic regarding the advancement of defense costs when a director or officer is facing criminal prosecution.  The decision was sent to us by our friends Fran Goins and Jim Wing, who are respectively chairs of the Developments and D&O Insurance Subcommittees … Continue Reading

Bankruptcy Court Applies Laches, Not Statute of Limitations to Professionals Who Allegedly Conspired With Fiduciaries

Miller v. Kirkland & Ellis LLP, Adv. No. 12-50713 (PJW) (Bankr. D. Del. Oct. 2, 2012). Tara Lattomus of Eckert Seamans prepared this case summary. Issue Addressed Whether the two year statute of limitations or the equitable doctrine of laches applied to claims against attorneys who allegedly conspired with corporate fiduciaries to defraud their client? … Continue Reading

District Court Disqualifies Firm Due to Client Representation of Over 15 Years Ago

We have written frequently on these pages about decisions that have addressed potential conflicts of interest in the litigation context, both real and imagined, in the state and federal courts. See, e.g., cases and articles on these pages here. The U.S. District Court for the District of Delaware recently disqualified counsel based on a finding of a … Continue Reading

Confidential Court of Chancery Arbitration Proceedings Found Unconstitutional — Violate Qualified Right of Access

Delaware Coalition for Open Government v. Hon. Leo E. Strine, Jr., et al., D. Del. C.A. No. 1:11-1015 (Aug. 30, 2012). Issue Presented: Do the Court of Chancery’s confidential arbitration proceedings violate the First Amendment’s qualified right of access? Answer:  Yes.  As a general rule, proceedings cannot be closed to the public except in limited circumstances.  … Continue Reading

New York Court Adopts Tooley Test for Identifying Derivative v. Direct Actions

The New York Supreme Court Appellate Division, First Department issued a decision in Yudell v. Gilbert, Case No. 600404/08 (Aug. 7, 2012) affirming the dismissal of an action regarding a joint venture.  See decision here.  The Court, in analyzing the difference between a direct and a derivative action, stated that “New York lacked a clear … Continue Reading

The Right to Bear Arms for Self-Defense in Delaware

The U.S. District Court for the District of Delaware recently issued a decision interpreting the Second Amendment to the U.S. Constitution, regarding the right to bear arms, as well as its counterpart in Delaware’s Constitution, as applied to residents of public housing. Doe v. Wilmington Housing Authority. We represent the plaintiff, with assistance from the country’s oldest civil rights … Continue Reading

Arbitrability of Fiduciary Duty Claims in Pennsylvania Law

We often review Delaware cases that address issues of arbitrability. For comparison purposes we bring you two recent decisions of the Pennsylvania Superior Court (the intermediate appellate court in the Keystone State), that addressed the issue of arbitrability in two companion cases involving the issue of whether breach of fiduciary duty claims against a trustee … Continue Reading

Contract Interpretation Principles under PA Law

For those interested in contract interpretation principles under PA law, and in particular when extrinsic evidence will be allowed, such as course of performance and usage of the trade, the recent opinion by the U.S. District Court for the Eastern District of Pennsylvania, in Artesian Water Company v. Chester Water Authority, may be instructive. We represent … Continue Reading

District Court Denies Security Holders Request for Extra Time to Consider Tender Offer for Human Genome Sciences Shares

David v. Human Genome Sciences, Inc., C. A. No. 12-965-SLR (D. Del.) (July 26, 2012). Issue Presented: Did the plaintiffs, security holders of defendant Human Genome Sciences, Inc. (“HGSI”), meet their burden of proof for injunctive relief in order for investors in HGSI to have more time to consider whether to tender their shares? Short … Continue Reading

Third Circuit Limits the Taxation of E-Discovery “Costs” Against the Losing Party

The United States Court of Appeals for the Third Circuit in Race Tires America v. Hoosier Racing Tire Corp., et al., issued a decision on March 16, 2012 on a matter of first impression, vacating the Western District of Pennsylvania’s decision awarding in excess of $365,000 in taxable costs for activities related to e-discovery, such as hard … Continue Reading

Bankruptcy Court Limits Executive Compensation

In re Verasun Energy Corp.,  No. 08-12606 (BLS) (Bankr. D. Del. March 26, 2012) Issue Addressed Whether claims of former executives for money owed under change-in-control agreements should be capped by section 507(b)(7) of the Bankruptcy Code? Short Answer The Bankruptcy Court held that the change in control agreements were employment contracts and that the … Continue Reading

PA Court Refuses to Pierce Veil of LLC

James T. Walmsley and Christopher W. Sullivan v. Frederick H. Ehmann, Steven Fishman, et al., C.A. No. 1845 EDA 2009 (Pa. Super. Ct. Feb. 28, 2012). This decision concerns the Pennsylvania Superior Court upholding the Court of Common Pleas ruling not to pierce the corporate veil of a Pennsylvania LLC, and the factors that are … Continue Reading

Bankruptcy Court Addresses Whether Landlord or Debtor Tenant Must Evict Bankrupt Subtenant

In re Amicus Wind Down Corporation, No. 11-13167 (KG) (Bankr. D. Del. Feb. 24, 2012). Issue Addressed Whether the burden of evicting a bankrupt subtenant fell upon the debtor/tenant or landlord? Short Answer The Bankruptcy Court for the District of Delaware held that the burden of evicting the subtenant and delivering the premises to the landlord was … Continue Reading

Practice Guidelines for Delaware Court of Chancery and Default Electronic Discovery Standards for U.S. District Court, District of Delaware

We have previously written on these pages about the relatively new Guidelines issued by the Delaware Court of Chancery, which are intended to give guidance to practitioners on procedural protocols before the Court. We have also written on these pages about the recently updated Default Standards for Electronic Discovery in the U.S. District Court for the District of … Continue Reading

Status of Federal Suit Challenging Confidential Arbitration in Court of Chancery

The Delaware Court of Chancery’s confidential and expedited arbitration procedure, in which selected disputes are heard before a member of the Court at a final hearing within 90 days of a complaint being filed, as described in a prior post here, have been challenged in a federal lawsuit that was filed in October to contest the … Continue Reading

U.S. Supreme Court Recognizes “Ministerial Exception” as Defense to Discrimination Claims Against Churches

In Hosanna-Tabor v. EEOC (download here), the U.S. Supreme Court yesterday recognized a defense that churches may assert against claims by some employees based on anti-discrimination laws, such as a minister that claims she was discriminated against on an issue that comes within the scope of the church’s religious beliefs. Professor Bainbridge comments on this important … Continue Reading

Bankruptcy Judge Explains Preference Law and Two Common Defenses

Burtch v. Revchem Composites, Inc., f/n/a Revchem Plastics, Inc. (In re Sierra Concrete Design, Inc.), Adv. Case No. 10-52667 (CSS) (Bankr. D. Del., Jan. 4, 2012), read opinion here. Tara Lattomus of Eckert Seamans prepared this summary. Issue Addressed Whether a creditor sued in a preference action was entitled to summary judgment based upon the … Continue Reading

District of Delaware Revises Default Standard for Discovery of Electronically Stored Information

Periodically we report on rule changes in the federal courts so that practitioners are away of these changes and how they might affect litigation practice in Delaware courts.  On December 8, 2011, the District of Delaware revised its Default Standard for Discovery Including Electronically Stored Information (the “Revised Default Standard”), which applies if the parties … Continue Reading

Amendment of Preference Complaint Relates Back and Avoids Statute of Limitations

Miller v. Metal Exchange Corporation (In re:  IH 1, Inc. f/k/a Indalex Holdings Finance, Inc.), Adv. Case No. 11-51329 (PJW) (Bankr. D. Del., Dec. 30, 2011), read opinion here. This summary was prepared by Tara Lattomus of Eckert Seamans. Issue Addressed Whether a Chapter 7 trustee could amend a preference complaint pursuant to Federal Rule … Continue Reading

Delaware Supreme Court’s Test for Demand Futility in Aronson Followed by Marshall Islands Supreme Court

For those readers who are students of Delaware corporate law and are interested in how Delaware corporate law is viewed by other courts in different parts of the world, we present an interesting decision recently issued by the High Court of the Republic of the Marshall Islands (located in the South Pacific) where the Court granted the defendants’ motion … Continue Reading

Pennsylvania Court Dismisses Derivative Action Challenging Merger Based on SLC Report

From time to time it is interesting to compare corporate law decisions from courts outside of Delaware. In Fundamental Partners, et al. v. Gaudet, et al., No. 11112589 (Phila. Ct. Com. Pl., Nov. 23, 2011), read opinion here, the Court of Common Pleas in Philadelphia, PA, dismissed a shareholder derivative action challenging the acquisition of … Continue Reading