Among the key corporate and commercial Delaware decisions that we have highlighted on these pages during the first five months of 2013, the following decisions either clarified existing Delaware law or announced new law on important substantive or procedural topics. This is a supplement to the annual review of cases we have provided on this
Chancery Applies Business Judgment Rule to Freezeout by Majority Shareholder
In Re MFW Shareholder Litigation, C.A. No. 6566-CS (Del. Ch. May 29, 2013).
Issue Addressed: What standard of review should apply to a going-private merger conditioned upfront by the controlling stockholder on approval by both a properly empowered, independent committee and an informed, uncoerced majority-of-the-minority vote.
Short Answer: When a controlling stockholder
Delaware Fiduciary Duty of Disclosure Explained by Chancery
In re Wayport, Inc. Litigation, Cons., C.A. No. 4167-VCL (Del. Ch. May 1, 2013).
Issues Addressed: Among the several issues addressed in this case, the most noteworthy is a fulsome discussion and restatement of the fiduciary duty of disclosure that directors and majority shareholders owe to other existing shareholders from whom they are
Chancery Penalizes Obstruction in Efforts to Take Deposition
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,
Chancery Addresses Right to Direct Claim for Dilution of Minority Shareholders
Carsanaro v. Bloodhound Technologies, Inc., C.A. No. 7301-VCP (Del. Ch. March 15, 2013).
This 76-page Chancery decision addresses issues that include the following: (1) when a claim for dilution of minority shares can be pursued directly instead of, or in addition to, derivately; (2) restrictions imposed by DGCL Section 160 on the right to redeem
Chancery and Proxy Puts
Kallick v. Sandridge Energy, Inc., C.A. No. 8182-CS (Del. Ch. Mar. 8, 2013).
The highly regarded corporate law scholar Professor Larry Hamermesh has provided his insights on this decision in highlights available on his blog at The Institute of Delaware Corporate & Business Law. The entire post follows:
Chancellor Strine’s March 8, 2013 opinion
Key Delaware Corporate and Commercial Decisions in 2012
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
Key Corporate and Commercial Decisions in the 2nd and 3rd Quarters of 2012
Key corporate and commercial decisions that we have highlighted, with commentary, over the last few months (roughly the 2nd and 3rd quarters of 2012), are compiled at the hyperlinks below for the convenience of our readers.
Supreme Court Upholds $2 Billion Judgment and $300 Million Fee Award
LP Member Protected from Self-Interested Transaction by Terms
The Borders of Revlon Duties
In re Synthes, Inc. S’holder Litig., C.A. No. 6452-CS (Del. Ch. Aug. 17, 2012). This recent opinion by Chancellor Leo Strine, Jr. from the Court of Chancery includes a discussion of the contours of fiduciary duties that were announced many years ago in the Delaware Supreme Court’s Revlon decision. Professor Stephen Bainbridge has already
Delaware Does Not Impose Fiduciary Duty, Per Se, to Minimize Corporate Taxes
Seinfeld v. Slager, C.A. No. 6462-VCG (Del. Ch. June 29, 2012).
Issues Presented
(1) Whether board approval of a supplemental retirement bonus was a breach of fiduciary duty to the extent that it constituted waste and did not qualify for a tax deduction; and (2) Whether a stock option plan for the directors was