Tag Archives: delaware corporate litigation

Chancery Determines Effectiveness of Written Consents of Stockholders pursuant to DGCL Section 228

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

Supreme Court Addresses Claims Against Dissolved Corporation

Anderson v. Krafft-Murphy Company, Inc., Del. Supr., No. 85-2013 (Nov. 26, 2013). Issue Presented: Delaware’s Supreme Court addresses issues of first impression in this opinion, including: does Delaware’s corporation dissolution scheme (8 Del. C. Sections 278 to 282) have a “general” statute of limitations for claims by third-parties against dissolved corporations? Short Answer: No. [Editor’s … Continue Reading

Appeal of Chancery Ruling on Ouster of CEO by Board

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

Chancery Allows Claim for Breach of Fiduciary Duty for Approval of Stock Options in Violation of Stock Option Plan

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

Forum Selection Bylaw Provision Case: Appeal to Supreme Court Dismissed

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

Chancery Rejects Stockholder Demand to Hershey for Books and Records

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

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

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

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

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 purchasing or selling … 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

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 … Continue Reading

Tulane Corporate Law Seminar

This is the 25th year that the Tulane Corporate Law Institute has presented a seminar in New Orleans that attracts corporate litigators and M & A lawyers from around the country to discuss the latest developments in corporate law. Members of Delaware’s Supreme Court and Court of Chancery by far represent the largest number of … Continue Reading
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