The analysis, in the context of a post-merger dispute, of the nuances of an indemnification provision and whether or not escrow funds should be released was the subject of a recent Delaware Court of Chancery decision in Reddy v. 2nd Chance Treatment Centers, LLC, C.A. NO. 2024-0193-SKR (Del. Ch., Dec. 12, 2024). Sitting by
equitable jurisdiction
Vice Chancellor rejects reasons to keep D&O coverage suit for $41M judgment in Chancery
By Francis Pileggi on
Posted in Court of Chancery Updates
This post was prepared by Frank Reynolds, who has been following Delaware corporate law, and writing about it for various legal publications, for over 30 years.
The Delaware Court of Chancery recently decided Zhongpin Inc. shareholders’ battle to force the food processor’s director and officer insurer to pay the $41.3 million Chancery Court judgment they…
No Equitable Jurisdiction for This Declaratory Judgment Suit
By Francis Pileggi on
Posted in Court of Chancery Updates
A recent Delaware Court of Chancery opinion provides a reminder of the limited jurisdiction of Delaware’s court of equity and why not all suits for declaratory judgment satisfy the narrow subject matter jurisdiction of the Court of Chancery. See Takeda Pharmaceuticals U.S.A., Inc. v. Genentech, Inc., C.A. No. 2018-0384-MTZ (Del. Ch. Mar. 26, 2019).…
Chancery Exercises Jurisdiction in Dispute Among Shareholders of Foreign Corporation
By Francis Pileggi on
Posted in Court of Chancery Updates
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…
Supreme Court Upholds Forum Selection Clause Against Kuwaiti Company
By Francis Pileggi on
Posted in Delaware Supreme Court Updates
National Industries Group (Holding) v. Carlyle Investment Management LLC, Del. Supr., No. 596, 2012 (May 29, 2013).
Issues Addressed: Enforceability of a forum selection clause, and the prerequisites to vacate a judgment under Court of Chancery Rule 60(b)(6).
Brief Background
This case involved a dispute between two sophisticated entities. One was based in Kuwait…
Chancery Dismisses Contract Case for Lack of Equitable Jurisdiction
By Francis Pileggi on
Posted in Court of Chancery Updates
Charlotte Broadcasting v. Davis Broadcasting of Atlanta, C.A. No. 7793-VCG (Del. Ch. April 2, 2013).
What this case is about: This opinion dismissed a breach of contract claim due to a finding that the claims did not provide a basis for equitable jurisdiction in the Court of Chancery.
Very Short Overview
This short opinion…
Chancery Finds Lack of Equitable Jurisdiction After Trial
By Francis Pileggi on
Posted in Court of Chancery Updates
In Brown v. Rembert, 2008 Del. Ch. LEXIS 180 (Dec. 11, 2008), the Chancery Court was presented with a motion on the eve of trial that raised the issue of whether the claims were within the court’s limited jurisdiction. This detailed post-trial opinion explains why the claims for breach of fiduciary duty related to the use of a…
Chancery Rejects Jurisdiction Over Compensation Claim
By Francis Pileggi on
Posted in Court of Chancery Updates
In Testa v. Nixon Uniform Co., (Del. Ch., Nov. 18, 2008), the Chancery Court rejected an argument that it had equitable or other jurisdiction over a claim that in essence, was for a form of compensation but importantly that compensation claim did not give the departing employee any right to stock, despite an effort to use DGCL Section…
Chancery Applies “Walks Like a Duck” Test for Equity Jurisdiction; and Rejects Alleged Insolvency of Defendant as Hook to Invoke Equitable Jurisdiction
By Francis Pileggi on
Posted in Court of Chancery Updates
Hillsboro Energy, LLC v. Secure Energy, Inc., (Del. Ch., Oct. 3, 2008), read opinion here. The introductory paragraph of the opinion provides the best overview of the case:
This case exemplifies the old adage: If it walks like a duck, and quacks like duck, it’s probably a duck. Despite plaintiff’s ingenious arguments to the
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