Tag Archives: delaware corporate litigation

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

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 in Kallick v. SandRidge … Continue Reading

Duties of Directors of Insolvent Company Addressed

Edgewater Growth Capital Partners LP v. HIG Capital, Inc., C.A. 3601-CS (Del. Ch., Feb. 28, 2013). This 70-page decision provides useful and extensive analysis of the duties of directors of an insolvent corporation and related claims against a private equity shareholder who enforced its foreclosure rights. The court dismissed the claims and found that the foreclosure … Continue Reading

Chancery Dismisses Duplicative Delaware Suit in Favor of First-Filed California Case

In Re Diamond Foods, Inc. Derivative Litigation, C.A. No. 7657-CS (Del. Ch. Feb. 28, 2013). Issue Addressed: Whether a derivative suit filed in Delaware should be dismissed in favor of a similar first-filed action in California. Short Answer: Yes. Short Overview of Case The factual background involves alleged manipulation of the financial statements of the company by the … Continue Reading

Chancery Denies Motion to Expedite

In re BioClinica, Inc. Shareholder Litigation, C.A. No. 8272-VCG (Del. Ch. Feb. 25, 2013). This Chancery ruling denied a motion to expedite claims in consolidated cases that were quickly filed to challenge the merger of BioClinica with JLL Partners. The court explained the basis for the denial as the absence of any colorable claims. In … Continue Reading

Chancery Addresses Section 220 Issues

Doerler v. American Cash Exchange, Inc., C.A. No. 7640-VCG (Del. Ch. Feb. 19, 2013). This gem of a Chancery decision provides an excellent overview of both the basic prerequisites of a claim for books and records under DGCL Section 220 as well as the nuances of certain defenses that may be–and may not be available … Continue Reading

Chancery Bars Claims Based on “Issue Preclusion” Doctrine

TR Investors, LLC v. Genger, C.A. No. 6697-CS (Del. Ch. Feb. 18, 2013). Issue addressed: Whether the doctrine of “issue preclusion” prevented the relitigation of issues previously decided, and thus supported the grant of a motion for summary judgment. Short answer: Yes. Short Overview This 58-page opinion chronicles the long and tortuous procedural history of … Continue Reading

Delaware Board’s Fiduciary Duty of Oversight for Foreign Operations

In re Puda Coal, Inc. Stockholders Litigation, C.A. No. 6476-CS (Del. Ch. Feb. 6, 2013)(Bench ruling). Thanks to Tariq Mundiya of Willkie Farr for forwarding the transcript. This bench ruling, highlighted on The Harvard Law School Corporate Governance Blog, for which I am a contributing author, addressed a claim for a breach of the board’s duty of … Continue Reading

Chancery Grants Expedited Proceedings To Consider Appointment of Receiver or Custodian for Insolvent Company

Balch Hill Partners, L.P. v. Shocking Technologies, Inc., C.A. No. 8249-VCN (Del. Ch. Feb. 7, 2013). Issue addressed: Whether expedited proceedings should be granted to consider the appointment of a receiver or custodian for an allegedly insolvent company pursuant to DGCL Sections 291 and 226? Short answer: Yes Brief Overview This letter ruling was in … Continue Reading
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