Tag Archives: francis pileggi

The Intersection of Corporate Law and the Political Activity of CEOs

Professor Stephen Bainbridge, the nationally-recognized, prolific corporate law expert, known to readers of this blog (among other reasons) for citations in Delaware court opinions to his scholarship, provides scholarly commentary and citation to multiple sources regarding the corporate law implications for the political activity of CEOs–including some who think of themselves as social justice warriors. The … Continue Reading

Recent Decision Clarifies Safe Harbors in DGCL § 144 for Board Action

The following article appeared in the current issue of the Delaware Business Court Insider: Recent Decision Clarifies Safe Harbors in DGCL § 144 for Board Action By: Francis G.X. Pileggi* and Chauna A. Abner** The recent Superior Court decision in Toedtman v. Turnpoint Medical Devices, Inc., C.A. No. N17C-08-210 RRC (Del. Super. Ct., Jan 23, … Continue Reading

No Equitable Jurisdiction for This Declaratory Judgment Suit

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). Background: … Continue Reading

Consent to Jurisdiction Implied by Adoption of Forum Selection Bylaw

A recent Delaware Court of Chancery decision is noteworthy for its finding that the adoption of a forum selection bylaw implied consent to jurisdiction to the extent that it required lawsuits by stockholders against the company to be filed in Delaware.  See In re: Pilgrim’s Pride Corp. Derivative Litigation, C.A. No. 2018-0058-JTL (consol.) (Del. Ch. … Continue Reading

Chancery Finds Usurpation of Corporate Opportunity

Delaware case law is well-established regarding the aspect of the fiduciary duty of loyalty that prohibits a corporate director from usurping a corporate opportunity. A recent decision from the Delaware Court of Chancery applies that well-settled prohibition in a flexible manner to a set of facts that have apparently not been squarely addressed in prior precedent.  … Continue Reading

Delaware Courts and Legal Ethics

A recent decision by the Delaware Court of Chancery provides an example of those rare instances where the court refers a violation of legal ethics to the Office of Disciplinary Counsel for investigation, as compared to the court itself determining the appropriate penalty. See Charter Communications Operating LLC v. Optymyze, LLC, et al., C.A. No. 2018-0865-JTL, … Continue Reading

Supreme Court Denies Motion to File Amicus Brief

Ameliorating the relative paucity of case law on the prerequisites for successfully motioning the Delaware Supreme Court for approval to file an amicus curiae brief, is a recent Order in the matter styled In re Verizon Insurance Coverage Appeals, Nos. 558, 560,  561, 2018, Order (Del. Feb. 21, 2019). The Delaware Supreme Court via this Order denied a motion to … Continue Reading

Chancery Denies Section 220 Demand for Corporate Books and Records

A recent post-trial decision from the Delaware Court of Chancery denied a claim for corporate books and records based on DGCL § 220 after finding that there was no credible basis for wrongdoing to support the stated investigative purpose for the demand. Hoeller v. Tempur Sealy International, Inc., C.A. No. 2018-0336-JRS (Del. Ch. Feb. 12, … Continue Reading

Company Required to Produce Emails Among Management to Stockholders

The Delaware Supreme Court recently issued an opinion that clarifies the duty of a company to produce emails among its management in a Section 220 case. In KT4 Partners LLC v. Palantir Technologies, Inc., Del. Supr., No. 281, 2018 (Jan. 29, 2019), Delaware’s High Court addressed a demand under Delaware General Corporation Law (DGCL) Section … Continue Reading

Chancery Enjoins Shares Issued to Director Without Stockholder Approval

A recent Court of Chancery decision is notable for its analysis of an issuance of shares approved by a sole director–but without stockholder approval. In the matter of Applied Energetics, Inc. v. Farley, C.A. No. 2018-0489-TMR (Del. Ch. Jan. 24, 2019), the court considered a somewhat unusual set of facts that included a shell corporation, at the time of … Continue Reading

Supreme Court Explains the Implied Covenant of Good Faith and Fair Dealing

A recent Delaware Supreme Court decision is must-reading for those who need to know the latest iteration of Delaware law on the implied covenant of good faith and fair dealing. In Oxbow Carbon & Minerals Holdings, Inc. v. Crestview-Oxbow Acquisition, LLC, Del. Supr. No. 536, 2018 (Jan. 17, 2019), Delaware’s High Court provided the latest … Continue Reading

Chancery Clarifies Director’s Right to Corporate Records

A recent Delaware Court of Chancery decision addressed the important issue of the right of directors to be given access to corporate records. In Schnatter v. Papa John’s International, Inc., C.A. No. 2018-0542-AGB (Del. Ch. Jan. 15, 2019), Delaware’s court of equity considered a claim under Section 220(d) of the Delaware General Corporation Law (DGCL) … Continue Reading

Words Prevail Over Conflicting Numbers in Contract

A recent Delaware Court of Chancery decision determined that “words” prevailed over “numbers” when they appear next to each other as contract terms in a manner that is inconsistent and contradictory. In Fetch Interactive Television, LLC v. Touchstream Technologies, Inc., C.A. No. 2017-0637-SG (Del. Ch. Jan. 2, 2019), the court described in extensive detail the … Continue Reading

Indemnification Claim Accrues When Demand for Indemnification is Rejected

A recent Delaware decision is noteworthy because of its clarification of when the statute of limitations begins to run in connection with the alleged breach of a contractual indemnification clause. The Superior Court ruled that an indemnification claim for environmental remediation liability accrued when the seller refused to indemnify the buyer–and not when the buyer discovered the contamination on which … Continue Reading

Advancement for Counterclaims Granted Despite Withdraw of Covered Claim

A recent transcript ruling by the Delaware Court of Chancery in Gasgarth v. TVP Investments, LLC, C.A. No. 2018-0621-JTL, transcript ruling (Del. Ch. Dec. 7, 2018), explained that the right to advancement was not extinguished by an amendment of a counterclaim to specifically withdraw breaches of fiduciary duty counterclaims and remove factual allegations relating to … Continue Reading

Chancery Addresses “Commercially Reasonable Efforts” Standard

When the phrase “commercially reasonable efforts” appears as a standard of performance in contracts, it seems predetermined to generate litigation, and the recent Court of Chancery decision in Himawan v. Cephalon, Inc., C.A. No. 2018-0075-SG (Del. Ch. Dec. 28, 2018), supports that observation. Although the agreement in this case had a contractual definition for “commercially reasonable efforts”, prior … Continue Reading

Chancery Rules on Limits of Forum-Selection Clauses in Corporate Documents

A recent seminal decision of the Delaware Court of Chancery must be included in the lexicon of every lawyer who wants to understand the boundaries of Delaware law on forum-selection clauses in corporate documents. In the case of Sciabacucchi v. Salzberg, C.A. No. 2017-0931-JTL (Del. Ch. Dec. 19, 2018), the Court determined that a forum-selection clause … Continue Reading

Chancery Addresses When Extrinsic Evidence Allowed

A recent Court of Chancery decision explains when an agreement will be deemed ambiguous such that extrinsic evidence will be allowed, and related contract interpretation principles. Key Issue Addressed: The court, in Zayo Group, LLC v. Latisys Holdings, LLC, C.A. No. 12874-VCS (Del. Ch. Nov. 26, 2018), described the “real controversy” in the matter as … Continue Reading
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