Tag Archives: francis pileggi

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

Chancery Determines Valid LLC Managers; Rejects Bump-Out Theory of Board Replacements

A recent Delaware Court of Chancery decision is notable for featuring the resolution of a dispute regarding the valid managers of an LLC, and rejecting the “bump-out theory” of replacing LLC managers–that is, incumbent managers need to be removed before their replacements can validly “take their seats”. The ruling in Llamas v. Titus, C.A. No. 2018-0516-JTL (Del. … Continue Reading

Chancery Clarifies Section 220 Principles

A recent Delaware Court of Chancery opinion clarified a few key Section 220 prerequisites that are not otherwise explicit in the statute. The decision styled In re Facebook, Inc., Section 220 Litigation, Cons. C.A. No. 2018-0661-JRS (Del. Ch. rev. May 31, 2019), is notable for the following refinements of well-worn Section 220 requirements for a … Continue Reading

Chancery Explains the Standard of Review for Excess Director Compensation Claims

A recent Delaware Court of Chancery decision provides a helpful explanation of the standard of review for claims of excess director compensation, in Stein v. Blankfein, C.A. No. 2017-0354-SG (Del. Ch. May 31, 2019).  The decision also explains the prerequisites for stockholder ratification to be sufficient in order to shift the standard from entire fairness … Continue Reading

Expedited Proceedings Granted to Enforce Forum Selection Clause

There are many decisions highlighted on these pages ordering the enforcement of forum selection clauses. A recent transcript ruling is notable for granting expedited proceedings, without ruling on the merits, for a plaintiff who sought to enforce a forum selection clause even though the plaintiff was not a signatory to the agreement with the forum … Continue Reading

Requirements for Confidential Treatment of Chancery Court Filings

A recent Court of Chancery decision explains the prerequisites that must be satisfied to obtain court approval to prohibit the public from viewing documents filed with the court. In The Chemours Co. v. DowDuPont, Inc., C.A. No. 2019-0351-SG (Del. Ch. June 7, 2019), the court denied a motion for confidential treatment and explained why the requirements of Rule … Continue Reading

Delaware Supreme Court Addresses Independence of Directors

A recent Delaware Supreme Court opinion addressed the independence and disinterestedness of corporate directors in the context of adequately pleading pre-suit demand futility as a prerequisite for pursuing a derivative claim. In Marchand v. Barnhill (Del. June 19, 2019), the court reversed the Court of Chancery’s dismissal of the case for failure to establish demand futility. … Continue Reading

Mid-Year Review of Key Delaware Corporate and Commercial Decisions

Over the last 14 years that I have published this blog, I have compiled an annual review with a list of key Delaware corporate and commercial decisions that have widespread utility to practitioners, especially those court decisions that are not widely covered by other legal publications or the mainstream press. On a few occasions, I have prepared a mid-year … Continue Reading

Chancery Orders Mandatory Indemnification per DGCL Section 145(c)

A recent Delaware Court of Chancery decision ordered mandatory indemnification based on success in underlying litigation pursuant to DGCL § 145(c), in the matter styled:  Brown v. Rite Aid Corporation, C.A. No. 2017-0480-MTZ (Del. Ch. May 24, 2019). Issue Addressed:  Whether dismissal of the underlying litigation based on a technical argument was “success” for purposes of … Continue Reading

Forum Selection Clause Interpreted Based on Austrian Law

A forum selection clause, controlled by Austrian law, was recently interpreted by the Delaware Court of Chancery as a mandatory forum selection clause requiring the dispute to be litigated in Vienna.  In Germaninvestments A.G. v. Allomet Corporation, C.A. No. 2018-0666-JRS (Del. Ch. May 23, 2019), the court also determined that the choice of law provision … Continue Reading

Chancery Grants Advancement on Counterclaims

A recent Delaware Court of Chancery bench ruling granted advancement in connection with defensive counterclaims against a former officer and director.  In Dodelson v. AC Hold Co., Inc., C.A. No. 2019-0029-SG (transcript) (Del. Ch. May 21, 2019), the court interpreted the provisions of a charter with advancement provisions, and reasoned that advancement was warranted. An … Continue Reading

Court Orders Waiver of Privilege Due to Deficient Privilege Log

A recent bench ruling from the Court of Chancery granted a motion to compel production of documents improperly withheld as privileged–and in the process ordered that privilege was waived due to the deficient preparation of the privilege log.  See Mountain West Series of Lockton Companies, LLC v. Alliant Insurance Services, Inc., C.A. No. 2019-0226-JTL (transcript) … Continue Reading

Miscellaneous Delaware Corporate and Commercial Practice Updates

This post is an aggregation of miscellaneous worthwhile Delaware corporate litigation developments that was easier to present as one post instead of multiple smaller posts: 1.     Case Law Regarding Importance of Formalities to Modify Pretrial Scheduling Orders: A Delaware Supreme Court opinion of several years ago, highlighted on these pages, emphasized that informal extensions of a … Continue Reading

Chancery Denies Indemnification Claim Seeking Recoupment of Advancement

A recent Court of Chancery decision rejected an attempt to recoup advancement based on the terms of an indemnification clause. See Computer Sciences Corporation v. Pulier, C.A. No. 11011-CB (Del. Ch. May 21, 2019), for this recurring issue in Delaware corporate and commercial litigation. Issue Addressed:  May a company recoup, via an indemnification claim, the amounts … Continue Reading

Delaware Supreme Court Addresses Damages for Breach of Consent-Rights, and Efficient Breach Theory

A recent Delaware Supreme Court decision is noteworthy for: (1) addressing damages for breach of consent-rights, as well as (2) discussing the concept of efficient breach.  In Leaf Invenergy Company v. Invenergy Renewals LLC, No. 308, 2018 (Del. Supr., May 2, 2019), the en banc court also engaged in a rare reversal of a Court … Continue Reading

Chancery Applies Corporate Advancement Case Law to LLC Context

A recent Delaware Court of Chancery decision interpreted the advancement provisions of an LLC Agreement by applying case law interpreting DGCL Section 145 in the corporate context.  In Freeman Family LLC v. Park Avenue Landing LLC, C.A. No. 2018-0683-TMR (Del. Ch. Apr. 30, 2019), the court reviewed the applicability of “defined phrases” that are familiar … Continue Reading

Chancery Interprets Contractual Indemnification Clause

A recent Delaware Court of Chancery decision interpreted an indemnification clause and rejected the applicability of equitable defenses to a strictly legal claim.  I highlighted the recent decision in NASDI Holdings v. North American Leasing, Inc., C.A. No. 2017-0399-KSJM (Del. Ch. Apr. 8, 2019), in an article published in the current issue of the Delaware … Continue Reading

Chancery Considers Exception to Production of Attorney-Client Privileged Communications

A recent short ruling from the Delaware Court of Chancery examined one of the exceptions to the general rule that attorney-client privileged information is not subject to production. In Tigani v. Tigani, C.A. No. 2017-0786-KSJM (Del. Ch. April 10, 2019), the court addressed a motion to compel documents from various law firms that were withheld … Continue Reading
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