Chancery Addresses Section 225 and Section 228 Issues

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 (DGCL). See Brown v. Kellar, C.A. No. 2018-0687-MTZ (Del. Ch. Dec. 21, 2018). Many Section 225 cases and Section 228 cases have been highlighted on these pages over the last 14 years.

Three Important Topics Addressed:

Although the factual details of this case are necessary to understand the holding that denied in part the motion for summary judgment, for purposes of the most widespread applicability for those involved in corporate litigation, I will highlight the key takeaways that include memorable statements of Delaware law on three important topics:

(1) the circumscribed scope of Section 225 summary proceedings;

(2) the impact of not providing prompt notice of a written consent of stockholders under Section 228; and

(3) the impact, if any, on the effectiveness of a Section 228 written consent if the notice requirements under Rule 14c-2 of the Securities Exchange Act of 1934 are not complied with—assuming full compliance with Section 228.

Brief Background:

This case involved a stockholder who brought an action to determine the composition of the board of directors pursuant to Section 225 of the DGCL.

Procedurally, the opinion addressed a motion for summary judgment to determine the proper members of the board. As often happens in these matters, there is a parallel plenary action that raises issues regarding a breach of fiduciary duty and which also seeks a declaratory judgment.

At the heart of the dispute is whether certain written consents in lieu of a stockholders’ meeting to remove an incumbent director, then to replace him with another director, was valid and effective upon delivery.  The counterargument was that the court should not grant summary judgment in order to allow it to consider issues of inequitable conduct that would allegedly void the written consents.

In addition to the issue of whether prompt notice under Section 228(e) of the DGCL was a condition precedent to effectiveness of the written consent under Section 228, another issue addressed is whether or not the notice requirements under Rule 14c-2 of the Securities Exchange Act of 1934 supersede the notice requirements under Section 228.

Key Takeaways

Section 225 Principles:

  • Whether or not an issue other than the proper composition of the board should be considered by the court in a summary Section 225 proceeding turns: “upon a determination of whether it is necessary to decide in order to determine the validity of the election . . . by which the defendant claims to hold office.” See footnotes 41 through 44 and accompanying text.
  • Although the summary nature of a Section 225 proceeding limits the scope of issues that will be addressed, Delaware courts “reject the notion that rigid, inflexible rules preclude this court from hearing anything but the narrowest arguments in Section 225 cases.”
  • Rather, the court may adjudicate a claim that a director does not validly hold corporate office because that director obtained the office through fraud, deceit, or breach of contract . . . but only for the limited purpose of determining the corporation’s de jure directors and officers. See footnote 40 and accompanying text.
  • Section 225 proceedings are in rem, meaning that the defendants “are before the court, not individually, but rather, as respondents being invited to litigate their claims in the res (the disputed corporate office) or be forever barred from doing so.” See footnote 39 and accompanying text.
  • Prior decisions by the Court of Chancery exemplify the ability of the court to review appropriate claims of inequitable conduct within the boundaries of a Section 225 case. See footnotes 47 through 49 and accompanying text.
  • The court will review issues “that could infect the composition of a company’s de jure directors and officers under Section 225, notwithstanding formal compliance with the voting procedures and requirements for those offices.” See footnotes 50-51 and accompanying text.
  • The court explained that it may consider the well-known principle announced in Schnell v. Chris-Craft Industries, 285 A.2d 437, 439 (Del. 1971), that “inequitable action does not become permissible simply because it is legally possible.” Schnell, 285 A.2d at 439.
  • The court reasoned that Schnell empowers the court in a Section 225 case to look at both technicalities and equities notwithstanding the relatively narrow scope of a Section 225 proceeding.
  • The “twice tested principle” of Delaware corporate law applies in 225 cases. That is, under Delaware law: “in every case, corporate action must be twice tested: first, by the technical rules having to do with the existence and proper exercise of the power; second, by equitable rules.” See footnote 52.

Section 228 Principles:

The court quoted from subsection (e) of Section 228 which requires prompt notice of the taking of corporate action by less than unanimous written consent of stockholders in lieu of a meeting. The sub-issue involved in this case was whether the absence of that notice under Section 228(e) prevents an otherwise valid written consent from taking effect. Based on the facts of this case, the court answered that question in the negative.

  • Section 228 unambiguously permits a majority of the stockholders of a corporation to act immediately and without prior notice to the minority. See footnotes 58-59.
  • Section 228(a) provides as a condition precedent that pursuant to Section 228(c) the consents must be “properly delivered” in order to be effective. See footnote 60 and accompanying text. In contrast, Section 228(e) does not make notice to the minority a condition precedent to an effective written consent.
  • Section 228(e) is not a condition precedent or a prerequisite to a corporate action by written consent but, the court explained that it is: “rather an additional obligation resulting from that corporate action.” See Slip op. at 23.
  • Nonetheless, the court emphasized that “prompt notice to the minority stockholders is of critical importance. Failure to provide that notice has, in unique circumstances, compelled the Court to deviate from the default rule that written consents are effective upon delivery.” Id.
  • The court referenced cases where egregious failure to provide that notice to non-consenting stockholders for several months resulted in the effectiveness under the default rule being delayed until notice requirement was remedied. See footnotes 65 through 71 and accompanying text.
  • The court found based on the facts of the instant matter that the foregoing “extreme” exception to the default rule was an applicable. Slip op. at 25.

Interface of Section 228 and Rule 14c-2 of the Exchange Act:

The court referred to other Delaware decisions that addressed the interfacing between Delaware corporate law requirements and Federal securities law and regulations.

  • The failed argument in this case was that Rule 14c-2 of the Securities Exchange Act of 1934 provided an independent notice requirement that precludes effective written consents until notice is given but “at the same time prevents [the company in this case] from giving that notice.” See footnotes 72 through 79 and accompanying text.
  • The court explained that the parties did not brief the issue of the jurisdiction of the Court of Chancery to interpret Rule 14c-2, but the court assumed without deciding that it could address the impact of that Rule on the validity of the written consents at issue in this case—based on Delaware law.
  • The parties also agreed that the Exchange Act Rules did not preempt Delaware law. See footnotes 79-80.
  • The court wrote that important policies underlying the Internal Affairs Doctrine suggest that the power of the state of incorporation should not be lightly overturned, but in any event the court held that its application of Section 228 to the written consents at issue “is not affected by Rule 14c-2.” Slip op. at 29.
  • The court reasoned that “even if Rule 14c-2 imposes a notice requirement beyond that found in Section 228, the Director Consents would still be effective under Delaware law. This court has consistently found that corporations cannot avoid their obligations under Delaware law, like holding annual meetings, by pointing to additional or reportedly conflicting obligations under Rule 14 of the Exchange Act.” See footnotes 81-82 for supporting case law.
  • The court observed a fundamental problem with the argument made by the Director Defendants as it relates to the interaction between federal law and Delaware law. The federal rule was meant to reinforce management accountability to stockholders and it cannot be used as a tool to indefinitely deprive stockholders of the franchise. See footnote 88. The Director Defendants in this case offer Rule 14c-2 as a basis to avoid giving stockholders notice, and the court rejected that argument.
  • The argument that Rule 14c-2 and Section 228 operate together to prevent the company from making any disclosure to the stockholders in this situation “stands the purpose of corporate and securities law on its head.” See footnote 91 and accompanying text.
  • Ultimately, the court found that it need not make a ruling on the substance of Rule 14c-2, because Rule 14c-2 did not “inform” its rulings on Section 228.

Rethinking the Board of Directors

Professor Stephen Bainbridge is a nationally-recognized corporate law scholar whose prolific scholarship is often cited in Delaware court opinions. His recently published essay entitled: Rethinking the Board of Directors: Getting Outside the Box, is an introduction to a symposium about his latest book. It includes the following abstract:


In our new book, Outsourcing the Board: How Board Service Providers Can Improve Corporate Governance, Todd Henderson and I change the conversation about corporate governance by examining the origins, roles, and performance of boards with a simple question in mind: why does the law require governance to be delivered through natural persons? Through tracing the development of boards from quasi-political bodies to the current ‘monitoring’ role, we find the reasons for this requirement to be wanting. Instead, we propose that corporations be permitted to hire other business associations—known as ‘Board Service Providers’ or BSPs—to provide governance services. Just as corporations hire law firms, accounting firms, and consulting firms, so too should they be permitted to hire governance firms, a small change that will dramatically increase board accountability and enable governance to be delivered more efficiently.

This essay will serve as the introduction to a forthcoming symposium about our book.


Chancery Rules on Limits of Forum-Selection Clauses in Corporate Documents

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 in a certificate of incorporation was invalid and ineffective to the extent that it purported to “require any claim under the Securities Act of 1933 to be brought in federal court” (the “Federal Forum Provisions”).

Why this Case is Noteworthy: The court reasoned in its holding that: “The constitutive documents of a Delaware corporation cannot bind a plaintiff to a particular forum when the claim does not involve rights or relationships that were established by or under Delaware’s corporate law.  In this case, the Federal Forum Provisions attempt to accomplish that feat.  They are therefore ineffective and invalid.”

Overview of Key Points:

This opinion is destined to form part of the bedrock of foundational Delaware corporate decisions and could rightly be the subject of a lengthy law review article, but for purposes of this quick blog post, I will merely highlight a few of the more notable excerpts in bullet points.

  • A substantial basis for the court’s reasoning was a prior decision from the Court of Chancery which upheld the validity of corporate bylaws that required claims based on the internal affairs doctrine and related claims to be brought exclusively in the Court of Chancery. That decision by the current Chief Justice of Delaware, writing at the time as the Chancellor, was Boilermakers Local 154 Retirement Fund v. Chevron Corp., 73 A.3d 934 (Del. Ch. June 25, 2018).
  • Although the Boilermakers case involved bylaws, the Sciabacucchi decision explained why that same reasoning applied to a certificate of incorporation which is governed by similar provisions in the Delaware General Corporation Law (DGCL). The court in Sciabacucchi explained that the reasoning in Boilermakers focused on the ability to enforce forum-selection clauses that related to the internal corporate matters of a Delaware corporation as opposed to external matters, such as claims arising under the Securities Act of 1933.
  • The Court buttressed its reasoning by referring to the codification of the Boilermakers decision, shortly after its publication, by means of the adoption of a new Section 115 of the DGCL. In connection with that new DGCL section, the Delaware General Assembly also passed new amendments to Sections 102 and 109 of the DGCL which prohibit fee-shifting provisions in the certificate of incorporation or bylaws particularly in connection with claims related to the internal affairs of a corporation as defined by DGCL Section 115.
  •  The Court’s reasoning was also supported by reference to what the court referred to as “first principles.” Those first principles included several basic tenets of corporate law such as the following: (i) Although the document filed with the state that gives rise to an artificial entity such as a corporation, and confers powers on it, is a contract, it is not an ordinary private contract among private actors; (ii) The certificate of incorporation is a multi-party contract that includes the State of Delaware. Unlike an ordinary contract, it also includes terms by reference that are imposed by the DGCL; (iii) Unlike an ordinary contract, a charter can only be amended to the extent that it complies with the DGCL; (iv) The DGCL specifies what provisions a charter may or may not include; and (v) Although the courts enforce both types of contracts, when enforcing relationships created by the corporate contract, the courts use an overlay of fiduciary duty. See pages 38 to 42 and footnotes 111 to 125.
  • A thorough analysis of the contours and policy behind the internal affairs doctrine is an important feature of this opinion. See, e.g., pages 41-46.

In sum, the court reasoned that the “constitutive documents of a Delaware corporation cannot bind the plaintiff to a particular forum when the claim does not involve rights or relationships that were established by or under Delaware’s corporate law.” The opinion provides extensive citations to substantial scholarship, case law and statutes.

Prof. Ann Lipton provides extensive insights in her blog post about this case with links to her articles on the topic. The good professor’s scholarship on this issue was also cited by the court in the above opinion.

Many cases have been highlighted on this blog regarding forum-selection clauses in private agreements. See, e.g., here and here. In some of the posts on these pages about cases involving forum-selection clauses, a graphic of the Roman Forum adds color as well as an etymological connection.

SUPPLEMENT: Professor Stephen Bainbridge, a prolific corporate law scholar, kindly links to this post on his blog.

Chancery Addresses When Extrinsic Evidence Allowed

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 one arising from the parties’ disagreement about what the contract regarding the sale of a company provided in connection with whether a disclosure was required when a customer “failed to renew” as opposed to “terminated” its status as a customer. 

Key Legal Principles Addressed:

·     The court explained when an agreement will be considered ambiguous such that extrinsic evidence will be permitted.  The court emphasized that a contract is not rendered ambiguous simply because the parties do not agree on its proper construction.  Rather a contract is ambiguous only when the provisions in controversy are “reasonably or fairly susceptible of different interpretations or may have two or more different meanings.” See pages 34 to 35.

·     The court described the types of extrinsic evidence that will help to inform the court regarding the intent of the parties based on an objective theory of contracts, e.g., usage of trade and course of dealings, as well as the drafts of the agreement leading to a final document and the negotiation history of the parties.  See pages 36 to 37.

·     The court observed that although a basic rule of contract construction is not to render terms of a contract superfluous, that rule doesn’t apply to synonyms–in this matter the court referred to various sources to interpret the definitions in this context of “terminate” and “cancel” to be essentially synonymous. 

·     The extrinsic evidence in this matter revealed that the parties did not intend to equate the terms “terminate or cancel” with “non-renewal” of customer agreements such that it required disclosure of those customers who chose “not to renew.”  See 37 to 39.

·     Two other points supported the court’s reasoning.  Prior drafts of the agreement showed that the buyer tried to include as part of required disclosures, those customers who “refused to renew” but the seller rejected that language and it did not appear in the final agreement.  The court also referred to the hoary concept of caveat emptor.  This made it incumbent on the buyer to be explicit and precise about what risk it was–or was not–assuming.

·     Regarding damages, the court explained “benefit of the bargain damages” when the value of a sold company is impaired by misrepresentations.  See page 45 and footnote 200.

·     In addition to failing to prove breach of contract, the plaintiff also failed to establish the minimum damages or “basket” that had to be met before the indemnification duty was triggered in this matter. 

Compare: recent decision in the Great Hill Equity matter, highlighted on these pages, which interpreted an indemnification clause which had a “cap”–as opposed to the provision in this indemnification clause in this matter which had a “minimum basket” that had to be met (filled) before any indemnification obligations were triggered.

Compare also: recent article by Bryan Garner in the ABA Journal that discusses what the famous wordsmith refers to as “contractual busts” or provisions in contracts that “make no literal sense at all.”

Supplement: Regarding the meaning of words in contracts, Professor Gordon Smith, Dean at the Brigham Young University Law School and the co-author of the well-read blog called Conglomerate, discusses in a recent post a new approach to researching the meaning of words and the use of words, especially as a word is used during different periods of time, called “Corpus Linguistics.” He refers in the above-linked post to a recent United States Supreme Court decision that appears to refer to this approach, and the BYU-developed database on which it is based called the Corpus of Historical American English.

Court Determines Scope of Release

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 dispute about whether there was a resolution of the dispute.”

Why This Case is Noteworthy: This decision deserves a place in the “virtual toolbox” of those engaged in corporate and commercial litigation because the court examines the parameters of a release when there is a dispute about whether or not certain claims or pending matters are covered.

Brief Background:

The parties in this case agreed to three basic terms of a settlement based only on the exchange of several emails—but no one formal document was executed by all the parties.

The key issue was which of the many lawsuits among the parties was covered by the mutual release provision of their settlement.

Key Takeaways:

  • The court recited the general legal principles applicable to releases and the typical scope of a release. See pages 9 and 10.
  • The court recited the familiar contract interpretation principle that when an agreement is ambiguous, extrinsic evidence is permitted to be considered as a means of determining the intent of the parties, such as, the history of negotiations, draft agreements, course of performance of the parties, and trade customs.
  • The court reasoned that if there was an intent to include in the release a lawsuit pending in the Ukraine in addition to the itemized Delaware lawsuits, that particular foreign litigation should have been expressly itemized as were the other pending cases.

Chancery Describes Minimum Standards of Attorney Conduct

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. In addition to the recitation of basic principles on which the practice of law is based, the decision provides citations to authority and quotable excerpts for use in a brief when issues of attorney conduct arise. The behavior involved in this case was egregious, and it serves as a reminder of the outer limits of conduct that will not be tolerated, for example during depositions and during other interactions among counsel and clients.

This case also serves as a reminder that in Delaware the trial courts do not view themselves–in the first instance–as enforcers of all the rules of professional conduct for lawyers–unless a violation interferes with the administration of justice in the litigation–though they may, as in this case, refer the matter to the Office of Disciplinary Counsel, which is an arm of the Delaware Supreme Court, or the analogous agency in other states when the conduct of an non-Delaware attorney is an issue.

The court begins the opinion by citing another case that exhorts attorneys to: “think twice, three times, four times, perhaps even more” before seeking sanctions against other attorneys for inappropriate conduct. Both parties in this case filed cross-motions for sanctions, but the court found only one of them to be warranted.

The court emphasizes in its introduction that it derives no pleasure in criticizing others because judges understand the “pressures and frustrations of practice.” The court also referred to members of the bench as not being above reproach, with the following phrase: “None of our own eyes being timber-free….” See page 2.

In sum, without dwelling on the embarrassing details, if an attorney’s conduct is truly egregious enough, this decision provides the authority and reasoning to address the problem, especially if that attorney is admitted pro hac vice.

Compare: Recent Chancery decision highlighted on these pages that explained why it was important for lawyers to follow the rules applicable to discovery, as well as abiding by related deadlines.

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 effect” clause was triggered in such a way as to allow an acquiring party to terminate a merger pre-closing. Much has been written in trade publications about the Akorn case. See, e.g., here and here.

Court Rejects Indemnification Cap on Fraud Claims

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).

This opinion weighs in at 153-pages and provides extensive factual details especially in the first 90-pages.  There were several prior decisions in this case highlighted on these pages, that provide more background information. 

Key Issues:

The key issues in this post-trial decision relate to whether fraud was proven, and whether damages were established in an amount that exceeded the cap on indemnification claims provided in the agreement of the parties.  In addition to allegations of breach of the representations and warranties in the agreement, the case included allegations of fraud, primarily relating to the knowledge of the sellers regarding excessive chargebacks that endangered the business model of the seller.

The legal analysis begins with a review of the claims for indemnification, as well as the argument that due to alleged fraud, the damages should not be limited to the escrow funds established by the merger agreement.  See page 91.

Key Takeaways:

·     Notably, the court explains that in Delaware the elements of fraud and “fraud in the inducement” are the same.  The court expounds at length on the various nuances and subtleties of such claims.  See Slip op. at 93 to 97.  The court applies those elements and nuances of the claims in an analysis that extends from page 97 to page 134.

·     A thorough analysis of the indemnification claims begins at page 134, and the key holdings on the indemnification claims are found at pages 147 to 150.

·     Although many indemnification claims and merger agreements have common themes, naturally their precise terms differ.  Many indemnification provisions have a cap on damages related to those claims.

Highlights of Court’s Holdings:

In this case, the court read the indemnification provisions to provide exclusive remedies only for specific types of claims, but the clause excluded damages based on fraud, for which the agreement did not provide a cap or limitation.  That is, the court explained that when the contract is viewed as a whole, the indemnification language involved exempts fraudsters from the benefits of the negotiated limits on liability.  See page 146 (emphasis on the word “fraudsters” in original).

The court also explained that the indemnification provision was part of a bargained-for liability structure that was intended to limit losses only from breaches of representations and warranties, that would be paid for from a fund that was created from the sale proceeds.

Damages for fraud were not limited to those referenced in the indemnification clause.  The court explained that this exclusion in the indemnification clause allowed an action to be brought against tortfeasers for damages without the limitations of the indemnification clause.  See pages 149 to 150.

SUPPLEMENT: In a recent bench ruling, the Court rejected an argument that the indemnification clause could be used as a broad liability cap, such as for a claim that the payment provision of an agreement of sale was breached–as opposed to a breach of the representations and warranties clause. See Glidepath, Ltd. v. Beumer Corp., C.A. No. 12220-VCL (Del. Ch. Nov. 26, 2018)(Transcript at 4-6). The court referred to the Curo case in the transcript ruling. The advancement aspects of that case were highlighted on these pages. (Yours truly represents Glidepath, Ltd. in a pending earn-out matter.)

Court Dissolves LLC Based on “Not Reasonably Practicable” Standard

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.  In Decco U.S. Post-Harvest, Inc. v. Mirtech, Inc., C.A. No. 2018-0100-JTL (Del. Ch. Nov. 28, 2018), the court, in a comparatively short opinion, interprets Section 18-802 of the Delaware LLC Act to order a dissolution of the LLC involved in this matter.

Takeaways: The key takeaways from this case begin with the provisions of Section 18-802 of Title 6 of the Delaware Code, which provides in pertinent part that the Court of Chancery may decree a dissolution of a limited liability company:  “Whenever it is not reasonably practicable to carry on the business in conformity with a limited liability company agreement.”  A party may obtain dissolution by showing that: “the defined purpose of the entity has become impossible to fulfill.”  See footnote 64 and accompanying text.

Although the court looks at the purpose-clause in the operating agreement of the LLC to determine the purpose for which it was formed, “other evidence of purpose may be helpful as long as the court is not asked to engage in speculation.”  See footnote 66.

Holding: the court found that the purpose for which the LLC was formed in this case was to engage in the commercialization of a product that the LLC did not own the intellectual property rights for, and therefore, it was relatively straightforward for the court to conclude after its analysis, that because it was impossible to pursue the purpose for which the LLC was formed, the statutory standard for dissolution was satisfied. That is, it was no longer reasonably practicable to continue the LLC in conformity with the purpose for which it was formed.

Chancery Describes Penalties Available for Discovery Violations

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. No. 12875-VCL (Del. Ch. Dec. 4, 2018), include the following:

  • The court explains the policy reasons for the need to enforce the rules of discovery and scheduling deadlines. See pages 19 to 20.
  • The court describes the types of penalties that are available for the court to impose for a party’s failure to comply with discovery rules or deadlines. See pages 21 to 25. See generally, Rule 37(b)(2).
  • The court explained that Delaware courts generally will strictly adhere to discovery deadlines. See footnote 48.

There are multiple Delaware decisions highlighted on these pages regarding the topic addressed in this decision. See, e.g., here and here.