Highlights & Analysis of Key Decisions from Delaware's Supreme Court & Court of Chancery
The Delaware Supreme Court has announced a revised standard for an important aspect of corporate litigation: the analysis of pre-suit demand futility for purposes of pursuing a derivative stockholder claim, in United Food and Commercial Workers Union and Participating Food Industry Employers Tri-State Pension Fund. v. Zuckerberg, No. 404, 2020 (Del. Sept. 23, 2021).
Before…
A recent Delaware Court of Chancery decision must be read by anyone interested in the latest iteration of Delaware law concerning when a non-signatory may be bound by a forum selection clause in an agreement. In Florida Chemical Company, LLC v. Flotek Industries, Inc., C.A. No. 2021-0288-JTL (Del. Ch. Aug. 17, 2021), the court provides…
A recent Delaware Court of Chancery decision is noteworthy for its clarification of the nuanced contours of Delaware law regarding contractual restrictions on the perennial feature of Delaware commercial litigation, known as post-closing fraud claims. In Online Healthnow, Inc. v. CIP OCL Investments, LLC, C.A. No. 2020-0654-JRS (Del. Ch. Aug. 12, 2021), the court…
A recent Chancery decision recounts the epic tale of a group of business partners who were longtime friends and who later accused each other, after forming a business together, of fraud and breach of fiduciary duty. In Stone & Paper Investors, LLC v. Blanch, C.A. No. 2018-0394-PAF (Del. Ch. July 30, 2021), the court describes…
In connection with a recent dispute among LLC members, the Court of Chancery discussed an apparent issue of first impression in Delaware: The rights of the fiduciary of a debtor who seeks to help a creditor-entity that the fiduciary has an interest in. In Skye Mineral Investors, LLC v. DXS Capital (U.S.) Limited, C.A. No.…
The Delaware Court of Chancery recently published an updated version of Practice Guidelines. Weighing in at 38 single-spaced pages, it must be read by both Chancery litigators and those out-of-state counsel who litigate Chancery cases. The original Practice Guidelines highlighted on these pages, promulgated in 2012, were a mere 18-pages in length.
Courtesy of…
For the last 16 years, these pages have featured many highlights of court decisions addressing the right of a stockholder, or a member of an LLC, to demand a company’s “books and records“. Regular readers will recall much commentary about why the exercise of such rights are not for the fainthearted.
Why this decision…
The Delaware Court of Chancery recently explained under what circumstances dual claims will be allowed to proceed for both breach of fiduciary duty and breach of contract in the context of the manager of an LLC allegedly using LLC assets for his personal benefit in a manner not shared by all the other LLC members.…
Regular readers of these pages may recall multiple prior blog posts on both veil-piercing and reverse veil-piercing over the last 16 years. Serious students should review the book on the topic by the renowned corporate law scholar, and a friend of this blog, Professor Stephen Bainbridge. The Delaware Court of Chancery recently recognized reverse-veil-piercing in…
A common type of business litigation case in Delaware involves post-closing purchase price adjustments, a variation of often-litigated earn-out disputes. Many agreements for the sale of a business include a provision that appoints an independent accounting firm to resolve disputes regarding a determination post-closing of working capital as of the closing date, for example, which…