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
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
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
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
Key Delaware Corporate and Commercial Decisions in 2012
Noteworthy 2012 Corporate and Commercial Decisions from Delaware’s Supreme Court and Court of Chancery.
By: Francis G.X. Pileggi and Kevin F. Brady.
Introduction
This is the eighth year that we are providing an annual review of key Delaware corporate and commercial decisions. During 2012, we reviewed and summarized over 200 decisions from Delaware’s Supreme Court
Chancery Finds Inadequate Representation by Derivative Plaintiff; Dismisses Complaint with Prejudice
South v. Baker, C.A. No. 7294-VCL (Del. Ch. Sept. 25, 2012).
Issues Addressed
: This decision is a candidate for inclusion in the pantheon of iconic Delaware Court of Chancery opinions addressing the following issues: (1) When derivative plaintiffs and their counsel will be presumptively found to provide inadequate representation resulting in the complaint’s
Delaware Does Not Impose Fiduciary Duty, Per Se, to Minimize Corporate Taxes
Seinfeld v. Slager, C.A. No. 6462-VCG (Del. Ch. June 29, 2012).
Issues Presented
(1) Whether board approval of a supplemental retirement bonus was a breach of fiduciary duty to the extent that it constituted waste and did not qualify for a tax deduction; and (2) Whether a stock option plan for the directors was
Chancery Decides: Not Per Se Breach of Fiduciary Duty for a Board to Fail to have a Succession Plan.
Zucker v. Andreessen, C.A. No. 6014-VCP (Del. Ch. June 21, 2012).
Issues Presented
(1) Whether a $40 million severance package for the CEO of Hewlett-Packard, who could have been terminated for cause, constituted corporate waste; and (2) Whether the failure of the board to have a clearly defined succession plan in place was a
Chancery Denies a Motion for Reargument and Motion to Amend its Ruling
The Ravenswood Investment Company L.P. v. Winmill, C.A. No. 3730-VCN (Del. Ch. Nov. 30, 2011), read letter ruling here. A prior decision by the Delaware Court of Chancery in this case was highlighted on these pages here.
Issue Addressed
The Court addressed a motion for reargument under Rule 59(f), as well as Court
Delaware Court of Chancery Dismisses Dow Shareholders’ Derivative Claims Regarding Rohm and Haas Acquisition for Failure to Plead Demand Futility
In Re The Dow Chemical Company Derivative Litigation, Cons. No. 4339, (Del. Ch., Jan. 11, 2010), read opinion here.
Kevin Brady and Ryan Newell of the Connolly Bove firm prepared this synopsis.
On January 11, 2010, a year after a major corporate battle between the Dow Chemical Company (“Dow”) and Rohm & Haas