Tag Archives: francis pileggi

Directors may face oversight liability for not properly monitoring key drug’s clinical trial

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

Termination Fee May Not be Sole Remedy for Termination of Merger Agreement

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

Delaware State Bar Association Responds to Attack Ads Against Delaware Courts

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

Forum Selection Clauses; Delaware Law; Federal Law; Internal Affairs Doctrine; and Chancery’s Sciabacucchi Decision

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

Delaware Supreme Court Instructs on Standards of Deposition Conduct

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

Chancery Describes Special Litigation Committee Requirements for Alternative Entities

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

Chancery Finds Proper Purposes in Section 220 Demand in Absence of KFW Procedural Protections

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

Chancery Addresses Prerequisites for Prima Facie Duty of Loyalty Claim

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

Director Denied Attorney/Client Communications–Firm Did Not Represent Whole Board

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

Special Litigation Committee Allows Derivative Litigation

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

TRO Granted to Enforce Covenant-Not-To-Compete Despite Liquidated Damages Provision

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

I’m a Contributing Author for: “The Art of M&A: A Merger, Acquisition and Buyout Guide” (5th ed. 2019)

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

Confidentiality Agreement Not Always Required for Section 220 Demands

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

Earn-Out Dispute: Ambiguous Terms Bar Motion to Dismiss

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

Chancery Addresses Personal Jurisdiction Over Co-Conspirator

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

Chancery Interprets DGCL § 174

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

Advancement Granted for Post-Termination Use of Confidential Information

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

Chancery Advancement Ruling Recites Basic Principles and Nuances

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

Advance Notice Bylaws Interpreted

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
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