A common type of business litigation case in Delaware involves post-closing purchase price adjustments, a variation of often-litigated earn-out disputes. Many agreements for the sale of a business include a provision that appoints an independent accounting firm to resolve disputes regarding a determination post-closing of working capital as of the closing date, for example, which
contract interpretation
Chancery Provides Guidance on Interpretation of LLC Agreement
By Francis Pileggi on
Posted in Chancery Court Updates
The recent Chancery decision in Pearl City Elevator, Inc. v. Gieseke, C.A. No. 2020-0419-JRS (Del. Ch. March 23, 2021), addressed the issue of whether the procedures in an LLC Agreement were correctly followed, such that a party acquired sufficient ownership interest in order to control the board.
This decision is useful for its recitation of…
16th Annual Review of Key Delaware Corporate and Commercial Decisions
16th Annual Review of Key Delaware Corporate and Commercial Decisions
By: Francis G.X. Pileggi and Chauna A. Abner
This is the 16th year that Francis Pileggi has published an annual list of key corporate and commercial decisions of the Delaware Supreme Court and the Delaware Court of Chancery. This list does not attempt to include…
Conflicting Forum Selection Clauses Addressed
By Francis Pileggi on
Posted in Chancery Court Updates
A recent Delaware Court of Chancery opinion interpreted related agreements that included forum selection clauses that were conflicting. In Mack v. Rev Worldwide, Inc., C.A. No. 2019-0123-MTZ (Del. Ch. Dec. 30, 2020), the court addressed forum selection provisions in two related agreements which the court treated as one because they were incorporated by reference.
The…
When Tandem Claims May Proceed for Breaches of Both Fiduciary Duty and Contract
By Francis Pileggi on
Posted in Selected Articles by Francis
Yours truly and my colleague Chauna Abner have published an article for the recent issue of The Delaware Business Court Insider on the titular topic. The analysis that determines when dual claims for breach of contract and breach of fiduciary duty based on substantially the same operative facts might survive a motion to dismiss, is…
Chancery says board faction access to rivals’ control dispute discovery ‘depends’ on adversity and standing
By Francis Pileggi on
Posted in Chancery Court Updates
This post was prepared by Frank Reynolds, who has been following Delaware corporate law, and writing about it for various legal publications, for over 30 years.
A discovery ruling by the Delaware Court of Chancery in a contest between two board factions for control of Adkins Energy LLC allowed plaintiff Pearl City Elevator, Inc. access…
Must-Read Chancery Decision for Buyers of Businesses Whose Value Depends on Retaining Customer Relationships
By Francis Pileggi on
Posted in Chancery Court Updates
A recent Delaware Court of Chancery decision addressed the issue of whether a seller was liable for not disclosing the notification it received prior to closing that one or more key customers were terminating their relationship with the seller’s business. Swipe Acquisition Corporation v. Krauss, C.A. No. 2019-0509-PAF (Del. Ch. Aug. 25, 2020). This…
Chancery Addresses Third-Party Beneficiary Issues
By Francis Pileggi on
Posted in Chancery Court Updates
A recent Court of Chancery letter ruling provides useful definitions and related statements of Delaware contract law in connection with issues that arose over an asset purchase agreement. In CHS/Community Health Systems, Inc. v. Steward Health Care System LLC, C.A. No. 2019-0165-JRS (Del. Ch. Aug. 21, 2020), the following statements of law provided by the…
Delaware Supreme Clarifies Contract-Based Right to Corporate Records
By Francis Pileggi on
Posted in Delaware Supreme Court Updates
A recent Delaware Supreme Court decision should be required reading for anyone interested in the latest iteration of Delaware law on the contract-based right to demand “books and records” in the alternative entity context. Delaware’s High Court ruled in Murfey v. WHC Ventures, LLC, Del. Supr., No 294, 2019 (July 13, 2020), that the…
Supreme Court Interprets Key Words in Agreement
By Francis Pileggi on
Posted in Delaware Supreme Court Updates
A recent Delaware Supreme Court decision is noteworthy for the approach it takes in determining the meaning of a word in an agreement, for example, by parsing the syntax and sentence structure where the word appears in the agreement. In Borealis Power Holdings Inc. v. Hunt Strategic Utility Investment, L.L.C., Del. Supr., No. 68…