A recent Delaware Court of Chancery decision provides an important lesson about the downside of imprecise drafting, and the need to express with precision how specific risks are to be allocated between the purchaser and seller of a business. In Julius v. Accurus Aerospace Corporation, C.A. No. 2017-0632-MTZ (Del. Ch. Oct. 31, 2019), the court … Continue Reading
Among the multitude of court decisions on DGCL Section 220 highlighted on these pages, a rare bird is the shifting of fees by the court based on the bad-faith exception to the American Rule. In a rare instance that should not be considered anything other than unusual, the Court of Chancery recently granted, in a transcript … Continue Reading
Last month, in a comprehensive advancement decision captioned White v. Curo Texas Holdings, LLC, C.A. No. 12369-VCL (Del. Ch. Feb. 21, 2017), the Delaware Court of Chancery applied what has become known in Delaware as the “Fitracks Procedures” to determine the appropriate amount of an advancement award when the exact amount of fees for covered … Continue Reading
ASB Allegiance Real Estate Fund v. Scion Breckenridge Managing Member LLC, C.A. No. 5483-VCL (Del. Ch. Sept. 16, 2013) This Chancery decision, on remand from the Delaware Supreme Court, awarded attorneys’ fees based on the bad faith exception to the American Rule. The Supreme Court had remanded because the award of fees was originally based … Continue Reading
Cartanza v. Cartanza, C.A. No. 7618-VCP (Del. Ch. July 8, 2013). Bottom line: This short letter ruling amplified the reasoning in the court’s prior decision in this case, highlighted here, in which the court awarded fees in connection with a motion to compel a deposition. The point of this short post is to serve as … Continue Reading
Sutherland v. Sutherland, C.A. No. 2399-VCN (Del. Ch. May 30, 2013). Issue Addressed: Whether certain directors violated their fiduciary duties by benefiting from a system of charging for administrative expenses for personal matters that was more favorable to certain directors. Short Answer: No. Background: Many prior Delaware decisions in this long-running internecine family business dispute have … Continue Reading
SIGA Technologies, Inc. v. PharmAthene, Inc., Del. Supr., No. 314, 2012 (May 24, 2013). This Delaware Supreme Court decision was the subject of a BloombergBusinessweek article on Sunday, May 26. The Court of Chancery’s opinion was highlighted on these pages at this link. Also, several other prior Chancery decisions in this case were also outlined on … Continue Reading
Whittington v. Dragon Group LLC, C.A. No. 2291-VCP (Del. Ch. May 1, 2013). Multiple prior decisions in this case have been highlighted on these pages and they provide more background details for the interested reader. Issue Addressed: Whether a settlement agreement needs to be fully executed by all parties in order to be enforceable. Short Answer: No. … Continue Reading
Cartanza v. Cartanza, C.A. No. 7618-VCP (Del. Ch. April 16, 2013). Issue Addressed: Whether attorneys’ fees should be awarded due to defense counsel obstructing the efforts of opposing counsel to depose his client. Short Answer: Yes. Brief Overview This letter ruling is a useful tool for the toolbox of any litigator. In essence, defense counsel … Continue Reading
Edgewater Growth Capital Partners L.P. v. H.I.G. Capital, Inc., C.A. No. 3601-CS (Del. Ch. April 18, 2013). This ruling explains both an issue about attorneys’ fees and the revision of a previous Chancery opinion in this case highlighted on these pages here. Issue Addressed: The standard that applies to award fees pursuant to the terms of a … Continue Reading
In re: Paetec Holding Corp. Shareholders Litigation, C.A. No. 6761-VCG (Del. Ch. Mar. 19, 2013). This Chancery opinion explains why attorneys’ fees were awarded in the amount of $500,000 based on a settlement of a challenge to a merger that resulted in additional disclosures prior to the deal closing. This is an excellent overview of the … Continue Reading
Edgewater Growth Capital Partners LP v. HIG Capital, Inc., C.A. 3601-CS (Del. Ch., Feb. 28, 2013). This 70-page decision provides useful and extensive analysis of the duties of directors of an insolvent corporation and related claims against a private equity shareholder who enforced its foreclosure rights. The court dismissed the claims and found that the foreclosure … Continue Reading
Forsythe v. ESC Fund Management Co. (U.S.), Inc., C.A. 1091-VCL (Del. Ch. Feb. 6, 2013). Issue addressed: Whether the court would allow objectors to the settlement of a derivative suit to guarantee the amount of the settlement and “take a chance” at pursuing a higher recovery at trial or in a later, new settlement, in … Continue Reading
In re MoneyGram Int’l, Inc. S’holders Litig., C.A. No. 6387-VCL (Del. Ch. Jan. 7, 2013). This case is about the award of attorneys’ fees. This case is notable because it involves the award of fees for non-monetary benefits received during the injunction phase of a case that later proceeded to trial. After the motion for … Continue Reading
Noteworthy 2012 Corporate and Commercial Decisions from Delaware’s Supreme Court and Court of Chancery. By: Francis G.X. Pileggi and Kevin F. Brady. Introduction This is the eighth year that we are providing an annual review of key Delaware corporate and commercial decisions. During 2012, we reviewed and summarized over 200 decisions from Delaware’s Supreme Court … Continue Reading
Bessenyei v. Vermillion, Inc., C.A. No. 7572-VCN (Del. Ch. Nov. 16, 2012). Issues Addressed: (1) Whether a notarized signature signed in the absence of a notary results in an invalid verification; and (2) Whether knowingly presenting an improperly notarized verification is a basis to dismiss the complaint under Delaware Court of Chancery Rule 41(b). Short Answers: (1) Yes; … Continue Reading
Gatz Properties LLC v. Auriga Capital Corp., No. 148, 2012 (Del. Supr. Nov. 7, 2012) (Per Curiam). Issue Addressed Delaware’s High Court held that the manager of an LLC violated a contracted-for fiduciary duty that adopted the equitable standard of entire fairness in a conflict of interest transaction between the LLC and its manager. Brief … Continue Reading
Soterion Corp. v. Soteria Mezzanine Corp., C.A. No. 6158-VCN (Del. Ch. Oct. 31, 2012). Why This Case is Noteworthy: This decision addresses for the first time in Delaware the applicable standard to determine when the threat of a lawsuit can be tortious interference with prospective business relationships. This opinion also features the rare instance when attorneys’ … Continue Reading
Lake Treasure Holdings Ltd. v. Foundry Hill GP, No. 6546-VCL (Del. Ch. Sept. 11, 2012). Why this case is noteworthy: This ruling provides practical insight into the logistical realities of discovery practice in the Delaware Court of Chancery and the gravitas required from out-of-state attorneys who may not be familiar with the seriousness with which … Continue Reading
Crumplar v. The Superior Court of the State of Delaware, No. 643 & 644, 2011 (Del. Supr., Oct. 22, 2012). Why this case is noteworthy: This Delaware Supreme Court opinion establishes new rules and standards that will govern when trial judges seek to penalize lawyers for “not following the rules” of legal ethics and civil … Continue Reading
Feeley v. NHAOCG, LLC, is a pending Chancery case involving issues that relate to a contest for control, and which has thus far generated two opinions, highlighted on these pages here and here. A transcript of an oral argument in this case has recently been made available, regarding a claim in the case that has not yet … Continue Reading
Dias v. Purches, C.A. No. 7199-VCG (Del. Ch. Oct. 1, 2012). Issue Addressed: This case discussed the award of counsel fees in connection with a class action settlement. The court discounted the amount that would otherwise be awarded due to the majority of boilerplate claims that were added to the single meritorious one. Brief Overview … Continue Reading
Shocking Technologies, Inc. v. Michael, C.A. No. 7164-VCN (Del. Ch. Oct. 1, 2012). Issues addressed: (1) Whether a dissident director may leak confidential data as part of his battle with the majority of directors, without breaching the duty of loyalty? (2) When a director breaches his duty of loyalty by leaking confidential data, but no … Continue Reading
Marra v. Brandywine School District, C.A. No. 5574-VCN (Del. Ch. Sept. 28, 2012). This is a useful little 20-page letter ruling for the purpose of illustrating the challenge of winning a motion seeking the award of attorneys’ fees based on the bad faith exception to the American Rule. The context is a subcontractor who sued … Continue Reading
