Tag Archives: Court of Chancery

Chancery Determines Ownership Interest in LLC and Remedy for Breach of Fiduciary Duties

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

Chancery Explains Safest Deal Structure to Defend M & A Challenges

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

Chancery Denies Expedited Proceedings for Challengers of Dell Deal

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

Delaware Court of Chancery Recites Standards Applicable to Non-Delaware Attorneys Admitted Pro Hac Vice

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

Chancery Upholds Bylaws with Forum Selection Clause

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

BJR Protected Allegedly Interested Director Transaction; When Section 220 Tolls Statute of Limitations

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

Court of Chancery Appoints Receiver to Conduct Annual Meeting

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

Key Corporate and Commercial Delaware Decisions for First Five Months of 2013

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

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 merger has, from the … Continue Reading

Insider Trading Claim against Kohlberg Kravis Roberts & Co. Allowed to Proceed

In re: Primedia, Inc., Shareholders Litigation, Cons., C.A. No. 6511-VCL (Del. Ch. May 10, 2013). Issue Addressed:  Whether insider trading claim based on state law should be allowed to proceed despite motion to dismiss by special litigation committee. Short Answer:  Motion to dismiss denied. Brief Background Details of this case were previously highlighted on these … Continue Reading

Chancery Declines to Enjoin Acquisition of Plains Exploration and Production Co.

In Re Plains Exploration & Production Company Stockholder Litigation, Cons., C.A. No. 8090-VCN (Del. Ch. May 9, 2013). Issues Addressed: Were Revlon duties of the board breached due to the absence of a special committee and pre-market check in connection with the sale of the company, and (ii) were disclosure obligations breached due to alleged … Continue Reading

Post-Mediation Statement by Mediator Not Admissible to Enforce Settlement

United Health Alliance, LLC v. United Medical, LLC, C.A. No. 7710-VCP (Del. Ch. May 6, 2013). Issue Addressed: Whether a post-mediation e-mail by a mediator is admissible for purposes of enforcing the terms of a settlement reportedly reached during mediation. Short Answer:  No. Brief Overview This short but useful decision describes a situation involving a mediation during … Continue Reading

Settlement Agreement Enforced Without All Signatures

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

Attorney/Client Privilege and Work Product Doctrine Again Addressed by Chancery

AM General Holdings LLC v. The Renco Group, Inc., C.A. No. 7639-VCN (Del. Ch. April 18, 2013). A prior Chancery decision in this case was highlighted on these pages at this link. Issue Addressed:  Whether the attorney/client privilege and the work product doctrine are defenses to a motion to compel. Short Answer:  They can be. … Continue Reading

Chancery Addresses Attorney/Client Privilege and Work Product Doctrine

JPMorgan Chase & Co. v. American Century Companies, Inc., C.A. No. 6875-VCN (Del. Ch. April 18, 2013). Issue Addressed: Whether the attorney/client privilege and work product doctrine were defenses to a motion to compel? Short Answer:  Yes in part and no in part. Brief Overview This letter decision provides a useful application of both the attorney/client … Continue Reading

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, defense counsel … Continue Reading

Chancery Addresses Reasonableness of Fees Awarded Pursuant to Contract

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

Chancery Addresses “At Issue” Exception to Attorney/Client Privilege

In re Comverge, Inc., Shareholders Litigation, C.A. No. 7368-VCP (Del. Ch. April 10, 2013). Issue Presented: Whether the attorney-client privilege was a defense to a motion to compel documents. Short Answer:  Yes, under the circumstances of this case. Summary of Analysis The court observed that under Court of Chancery Rule 26(b)(1), the “parties may obtain … Continue Reading

Supreme Court Reverses Chancery on Collateral Estoppel/Demand Futility and Section 220 Issues

Pyott v. Louisiana Municipal Police Employees’ Retirement System, No. 380, 2012 (Del. Supr., April 4, 2013) Issues Addressed:  (1) Whether or not a prior ruling by a California court dismissing a derivative suit served as a bar to subsequent Delaware derivative suits; and (2) Whether the failure to use Section 220 before filing suit created a … Continue Reading

Chancery Enforces Non-Competition Agreement

Simplexity, LLC v. Zeinfeld, C.A. No. 8171-VCG (Del. Ch. April 5, 2013) (Redacted Version) Issue Addressed:  This case involves a dispute between two companies over the hiring of the former CEO of Simplexity, Andrew Zeinfeld.  (The publication of this opinion was delayed while confidential data was redacted.) Short Overview Simplexity contends that Zeinfeld’s employment with … Continue Reading
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