In a common fact pattern involving allegations that the buyer of a company intentionally derailed the attainment of milestones that would trigger additional payments, the Court of Chancery allowed several claims to survive a motion to dismiss. Trifecta Multi-Media Holdings, Inc. v. WCG Clinical Services LLC, C.A. No. 2023-0699-JTL (Del. Ch. June 10, 2024).
Chancery Explains Policy Limits to Contractual Restrictions on Fraud Claims
By Francis Pileggi on
Posted in Chancery Court Updates
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…
Chancery Allows Claims for Breach of Both Fiduciary Duty and Contract Against LLC Manager
By Francis Pileggi on
Posted in Chancery Court Updates
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.…
Must-Read Chancery Decision for Buyers of Businesses Whose Value Depends on Retaining Customer Relationships
By Francis Pileggi on
Posted in Chancery Court Updates
A recent Delaware Court of Chancery decision addressed the issue of whether a seller was liable for not disclosing the notification it received prior to closing that one or more key customers were terminating their relationship with the seller’s business. Swipe Acquisition Corporation v. Krauss, C.A. No. 2019-0509-PAF (Del. Ch. Aug. 25, 2020). This…
Chancery lets investment firm press claim it was duped into buying I.T. company
By Francis Pileggi on
Posted in Uncategorized
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 Chancery Court recently green-lighted key parts of an investment company’s suit against officers and owners who allegedly inflated their I.T. and data center services provider’s worth, finding the…
Claims by Long-Term Close Friend Proceed Against Faithless Business Partner
By Francis Pileggi on
Posted in Chancery Court Updates
A recent Delaware Court of Chancery opinion discussed the nuances of an unusual personal and business relationship, akin to a “familial intimacy”, that formed the basis for the court to conclude that a fiduciary relationship could be proven at trial. See Bamford v. Penfold, L.P., C.A. No. 2019-0005-JTL (Del. Ch. Feb. 28, 2020).
Short …
Chancery Allows Fraud and Breach of Contract Claims Against Seller of Stock
By Francis Pileggi on
Posted in Chancery Court Updates
The following article first appeared in a recent edition of The Delaware Business Court Insider.
A recent decision of the Delaware Court of Chancery in the case of Osram Sylvania, Inc. v. Townsend Ventures, LLC, C.A. No. 8123-VCP (Del. Ch. Nov. 19. 2013), denied a motion to dismiss a breach of contract claim and a…
Chancery Applies Italian, Dutch, English and Delaware Law in Summary Judgment Ruling
By Francis Pileggi on
Posted in Chancery Court Updates
In Vichi v. Koninklijke Philips Electronics N.V., C.A. No. 2578-VCP (Del. Ch. Nov. 28, 2012), the Delaware Court of Chancery issued a 65-page decision that applies Dutch, Italian, English and Delaware law in the context of granting in part, and denying in part, a summary judgment motion. A prior 55-page Chancery decision in this…
Court of Chancery Awards Lost Future Earnings as Damages to Hedge Fund Managers Due to Fraud of Majority Partner
By Francis Pileggi on
Posted in Chancery Court Updates
Paron Capital Management LLC v. Crombie, C.A. No. 6380-VCP (Del. Ch. May 22, 2012).
Issue Addressed: Whether the breach of fiduciary duty owed by a hedge fund manager to his partners entitles them to lost future earnings.
Short Answer: The Court found that the partners who were defrauded were entitled to lost future…
Delaware Supreme Court Bars Fraud Claims Based on Contract Provision
By Francis Pileggi on
Posted in Delaware Supreme Court Updates
RAA Management, LLC v. Savage Sports Holdings, Inc., No. 577, 2011 (Del. May 18, 2012).
Issue Addressed: Whether a disclaimer in a non-disclosure agreement barred claims for fraud by a potential buyer of a business. Short Answer: Yes.
Supplement: Professor Bainbridge has a post that addresses this issue in his usual…