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 business judgment rule cannot shield Clovis Oncology Inc.’s directors from shareholder charges that they breached their oversight duty by ignoring reports that their flagship cancer-fighting drug was unlikely … Continue Reading
A recent Delaware Court of Chancery opinion allowed a claim to proceed based on the theory that a termination fee for a merger agreement was not the sole remedy for breach of contract. In Genuine Parts Co. v. Essendant, Inc., C.A. No. 2018-0730-JRS (Del. Ch. Sept. 9, 2019), the court discussed a very fact-specific, contract-based … Continue Reading
Recent attack ads appearing on TV that apparently were financed by a disgruntled litigant unhappy with the results of a decision by a Delaware court, generated an unusual response from the Delaware State Bar Association. A website called Town Square Delaware provides a copy of the letter. The Delaware Business Court Insider also published an … Continue Reading
For readers who follow the law regarding forum selection clauses, a recent article by Professor Joseph Grundfest should be of interest. The good professor addresses the December 2018 Court of Chancery decision in Sciabacucchi v. Salzberg (highlighted on these pages), and the intersection of Delaware law and Federal law in the context of forum selection clauses and the … Continue Reading
A recent Delaware Supreme Court opinion provides a tutorial on the standards imposed on Delaware lawyers when a deponent, who is the lawyer’s client, engages in inappropriate conduct during a deposition. See Shorenstein Hays-Nederland Theaters LLC Appeals, Nos. 596, 2018 and 620, 2018 (Del. Supr. June 20, 2019). My overview of the decision was the focus of … Continue Reading
The requirements for a special litigation committee, in the alternative entity context, that seeks recognition of its legitimacy from the court was recently explained in the Delaware Court of Chancery decision styled: Wenske v. Blue Bell Creameries, Inc., C.A. No. 2017-0699-JRS (Del. Ch. Aug. 28, 2019). Short Overview of Case: This case involves a derivative … Continue Reading
Adding to the voluminous case law interpreting DGCL Section 220 that has been highlighted over the last 14 years on these pages, the recent Delaware Court of Chancery decision in Kosinski v. GGP Inc., C.A. No. 2018-0540-KSJM (Del. Ch. Aug. 28, 2019), is notable for its useful and thorough recitation of the basic requirements of … Continue Reading
A recent Delaware Court of Chancery decision addressed claims that the CEO of a closely-held company breached the duty of loyalty in connection with unauthorized personal expenses charged to the company, and other actions, while he managed the company–that were not consistent with financial management in the best interest of the company. That decision, in … Continue Reading
A recent Delaware Court of Chancery opinion is noteworthy for its many quotable judicial words of wisdom about motions for reargument pursuant to Rule 59(f). In Manti Holdings, LLC v. Authentix Acquisition Company, Inc., C.A. No. 2017-0887-SG (Del. Ch. Aug. 14, 2019), the court described a meritorious motion for reargument as a “useful tool if … Continue Reading
A recent Court of Chancery decision is one of several relatively recent rulings that clarify the limited scope of equitable relief that is available for defamation claims as a narrow exception to the general rule that equity will not enjoin a libel. The opinion in Preston Hollow Capital LLC v. Nuveen LLC, C.A. No. 2019-0169-SG (Del. … Continue Reading
A recent Delaware Court of Chancery opinion should be read by all lawyers who seek to avoid the risk of a fully executed contract being ruled unenforceable due to a court later finding, perhaps suprisingly, that the agreement did not accurately express the understanding of the parties. In Kotler v. Shipman Associates, LLC, C.A. No. … Continue Reading
A recent Delaware Court of Chancery decision explained that: the general rule that a director is entitled to communications with counsel for the board has exceptions, but the threshold issue is whether the attorney involved represents the whole board–or just selected board members. In Gilmore v. Turvo, Inc., C.A. No. 2019-0472-JRS (Del. Ch. Aug. 19, … Continue Reading
A recent Delaware Court of Chancery decision involved the unusual situation where a Special Litigation Committee allowed derivative plaintiffs to pursue claims challenging an acquisition of the defendant company. See In re Oracle Corp. Derivative Litigation, C.A. No. 2017-0337-SG, Letter (Del. Ch. Aug. 15, 2019). Another unusual case in which a Special Litigation Committee did … Continue Reading
The Delaware Court of Chancery granted a TRO recently to enforce a covenant-not-to-compete, or non-compete agreement, notwithstanding a liquidated damages provision and the (unsuccessful) argument that such a provision created the absence of irreparable harm needed for injunctive relief. In Affinity Wealth Management LLC v. McPoyle, C.A. No. 2019-0441-JTL, transcript (Del. Ch. June 18, 2019), the court followed well-established … Continue Reading
Your truly is a contributing author for a recently published treatise entitled: “The Art of M&A: A Merger, Acquisition and Buyout Guide” (5th ed. 2019), edited by Alexandra Reed Lajoux. I was asked to attend a book signing at the flagship Barnes & Noble store on 5th Avenue in New York City on August 22, 2019, at noon, in connection … Continue Reading
The Delaware Supreme Court recently announced a decision of great importance for stockholder demands under Section 220 of the Delaware General Corporation Law. In Tiger v. Boast Apparel, Inc., No. 23, 2019 (Del. Supr. Aug. 7, 2019), the Delaware Supreme Court ruled that: (i) although inspection of records demanded by stockholders pursuant to Section 220 … Continue Reading
The recent Delaware Court of Chancery decision in Windy City Investments Holdings, LLC v. Teachers’ Insurance and Annuity Association of America, C.A. No. 2018-0519-MTZ (Del. Ch. July 26, 2019), discussed an often recurring issue in commercial litigation: a seller of a business who claims that the Earn-Out provisions in the agreement of sale were not … Continue Reading
The Delaware Court of Chancery addressed in a recent opinion the nuances of imposing personal jurisdiction (in a second ruling on the issue in as many days), in connection with someone who served as a de facto manager of an LLC. In Metro Storage International LLC v. Harron, C.A. No. 2018-0937-JTL (Del. Ch. July 19, 2019), the … Continue Reading
A recent Delaware Court of Chancery decision provides an excellent analysis of the requirements for imposing personal jurisdiction based on the Delaware Long Arm Statute, and also addresses the fiduciary duty of disclosure in a thorough manner worthy of careful reading. In Clark v. Davenport, C.A. No. 2017-0839-JTL (Del. Ch. July 18, 2019), the court … Continue Reading
A recent Delaware Court of Chancery case should win a “candor award” for acknowledging that despite the arguments of both sides regarding the alleged intent of parties in the agreement at issue, the court found that notwithstanding multiple re-readings of both the agreement involved, and the arguments of the parties in their briefs, the court … Continue Reading
For those interested in an interpretation of § 174 of the Delaware General Corporation Law, and under what circumstances directors may be personally liable in connection with issuing dividends, as well as the statute of limitations for claims that § 174 was violated, it remains necessary to read the recent Court of Chancery decision in … Continue Reading
The recent Delaware Chancery Court opinion in Ephrat v. medCPU, Inc., C.A. No. 2018-0052-MTZ (Del. Ch. June 26, 2019), remains noteworthy for two reasons, notwithstanding the large number of advancement decisions interpreting DGCL Section 145 appearing on these pages over the last 14 years: (1) It provides an anthology of prior Delaware decisions granting advancement … Continue Reading
Adding to the multitude of Delaware decisions featured on these pages involving the right of corporate directors and officers to advancement of their fees incurred to defend claims against them, pursuant to DGCL Section 145, or by agreement, we offer highlights of Sider v. Hertz Global Holdings, C.A. No. 2019-0237-KSJM, Order (Del. Ch. June 17, 2019), a … Continue Reading
A recent Delaware Court of Chancery decision interpreted an advance notice bylaw in a manner that disapproves of the attempt by the company to require onerous and extensive questions to be completed and returned within a five-day period before the proposed nominations to the board would be considered. The decision in Saba Capital Master v. … Continue Reading
