Cook v. Hewlett-Packard Co., C.A. No. 8667-VCG (Del. Ch. Jan. 24, 2014)(revised Jan. 30, 2014). Issue Addressed: Was a stockholder entitled to additional books and records from Hewlett-Packard regarding accounting fraud at a company HP purchased? Answer: No Short Highlights This post-trial letter opinion from the Court of Chancery denying a request for books and … Continue Reading
Top Ten 2013 Delaware Corporate and Commercial Decisions By: Francis G.X. Pileggi and Kevin F. Brady This is our ninth annual review of key Delaware corporate and commercial decisions. During 2013, we reviewed and summarized over 200 decisions from Delaware’s Supreme Court and Court of Chancery on corporate and commercial issues. Among the decisions with … Continue Reading
Grace v. Ashbridge LLC, C.A. No. 8348-VCN (Del. Ch. Dec. 31, 2013). Issue Addressed: Whether a successor entity was liable for advancement and indemnification claims based on the operating agreement of a successor entity LLC even though the sole allegations involve a predecessor entity and a related entity. Short Answer: No. Brief Overview: An understanding … Continue Reading
In Silverberg v. Gold, et al., C.A. 7646-VCP (Dec. 31, 2013), the Court of Chancery denied defendants’ motion to dismiss a derivative action (for failure to make demand) alleging a breach of fiduciary duty based on insider trading against the directors of Dendreon Corporation, a biotechnology company which had only one commercially available drug product, … Continue Reading
The following article first appeared in a recent edition of The Delaware Business Court Insider. A recent decision of the Delaware Court of Chancery in the case of Osram Sylvania, Inc. v. Townsend Ventures, LLC, C.A. No. 8123-VCP (Del. Ch. Nov. 19. 2013), denied a motion to dismiss a breach of contract claim and a … Continue Reading
Boris v. Schaheen, C.A. No. 8160-VCN (Del. Ch. Dec. 2, 2013). Issue Addressed: Whether the written consents of stockholders pursuant to DGCL Section 228 effectively selected new board members. Brief Overview This 51-page post-trial decision addressed the effectiveness of written consents of stockholders that were designed to select new board members. The two entities involved … Continue Reading
Darby Emerging Market Fund, L.P. v. Ryan, Consol. C.A. No. 8381-VCP (Del. Ch. Nov. 27, 2013). This Chancery decision addressed whether the Court had equitable jurisdiction over a dispute among shareholders of a foreign entity. Delaware’s court of equity relied on the well-worn “clean up doctrine”, which allows it to exercise equitable jurisdiction over an … Continue Reading
Klaassen v. Allegro Dev. Corp. et al., No. 8626-VCL (Del. Ch. Nov. 7, 2013). This Chancery decision is the subject of an appeal to the Delaware Supreme Court. Among the issues to be addressed by Delaware’s high court is whether the actions of a board to dismiss the CEO, who also had voting power over a controlling percentage … Continue Reading
Pfeiffer v. Leedle, C.A. No. 7831-VCP (Del. Ch. Nov. 8, 2013). Issue Addressed: Whether the approval of stock option grants that exceeded the maximum number of stock options allowed under the stock incentive plan was the basis for a breach of fiduciary duty claim against both the board that approved it and the executive who … Continue Reading
We previously highlighted the Court of Chancery decision that upheld a forum selection provision in corporate bylaws that required certain suits involving the internal affairs of the corporation to be filed in Delaware. Boilermakers Local 154 Retirement Fund v. Chevron Corporation, C.A. No. 7220-CS (Del. Ch. June 25, 2013). Professor Larry Hamermesh writes about the voluntary … Continue Reading
Costantini v. Swiss Farm Stores Acquisition LLC, C.A. No. 8613-VCG (Del. Ch. Sept. 5, 2013). A subsequent decision in this case was highlighted on these pages here. Issue Presented: Whether a non-manager of an LLC was entitled to indemnification based on the terms of the LLC agreement. Short Answer: Not based on the applicable terms. … Continue Reading
Louisiana Municipal Police Employees’ Retirement System v. Hershey Co., No. 7996, Master’s Report (Del. Ch. Aug. 16, 2013). This decision rejected a demand for books and records of the Hershey Company based on DGCL Section 220. The stockholder claimed, in essence, that Hershey’s management must be complicit in the abhorrent child labor practices in the two West … Continue Reading
Huff v. Longview Energy Co., C.A. No. 8453-CS (Del. Ch. Aug. 12, 2013). This short letter ruling granted a motion to dismiss a claim for indemnification pursuant to DGCL section 145(c) based on the reasoning that the claim was premature in light of the underlying judgment being subject to a pending appeal. Even though a … Continue Reading
Grove v. Brown, C.A. No. 6793-VCG (Del. Ch. Aug. 8, 2013) Issues Addressed: This post-trial opinion addresses issues involved in a 4-person LLC whose members disputed: (1) what specific ownership interest each had in the LLC; (2) the impact of a member not contributing the required amount of start-up capital; (3) whether there was an … Continue Reading
Southeastern Pennsylvania Transportation Authority v. Volgenau, C.A. No. 6354-VCN (Del. Ch. Aug. 5, 2005) Issue addressed: This Chancery opinion explains the procedures to follow in order to benefit from the business judgment rule’s deferential standard of review for a merger that involves a controlling shareholder and a third-party. This decision provides a road map for … Continue Reading
The Sequoia Presidential Yacht Group LLC v. FE Partners LLC, C.A. No. 8270-VCG (Del. Ch. July 15, 2013). This ruling amplifies the relative paucity of judicial interpretation of the rather new Court of Chancery Rule 5.1 that defines the standard that must be met before filings with the court will be kept confidential or redacted … Continue Reading
In re Dell Inc. Shareholder Litigation, No. 8329, hearing transcript released (Del. Ch. June 27, 2013). In a ruling from the bench, the Court of Chancery denied a request for expedited proceedings requested by challengers of the pending deal involving Dell. The plaintiffs failed to convince the court that they had a “colorable claim” that … Continue Reading
The Sequoia Presidential Yacht Group LLC v. FE Partners LLC, C.A. No. 8270-VCG (Del. Ch. July 5, 2013). Issue Addressed: In this short letter opinion, the Delaware Court of Chancery reiterated the standard of conduct that will be applied to non-Delaware attorneys who apply for admission pro hac vice to practice in Delaware courts The … Continue Reading
Boilermakers Local 154 Retirement Fund v. Chevron Corporation, C.A. No. 7220-CS (Del. Ch. June 25, 2013). Issue Addressed: Enforceability of bylaws adopted by the Board of Directors providing that litigation relating to the internal affairs of the corporation must be filed only in Delaware. Short Answer: Enforceability upheld. See, e.g., 8 Del. C. § 109(a). Preface … 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
Rich v. Fuqi International, Inc., C.A. No. 5653-VCG (Del. Ch. June 12, 2013). Issue Addressed: Should a receiver be appointed to enforce an order to hold an annual shareholders’ meeting pursuant to DGCL section 211? Answer: Yes. Brief Background: The Court of Chancery previously ordered this company to hold a shareholders’ meeting pursuant to DGCL … Continue Reading
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 … Continue Reading
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 merger has, from the … Continue Reading
The current issue of the Delaware Journal of Corporate Law that recently came in the mail, Volume 37, No. 3 (2013), includes a reprinting of the new Practice Guidelines recently promulgated by the Court of Chancery, and also features an introduction to those new court “de facto rules” by Kevin F. Brady and Francis G.X. … Continue Reading
