A recent Court of Chancery decision allowed claims to proceed for the refusal to enable the seller of a business to exercise options in the new company. In Osios LLC v. Tiptree, Inc., C.A. No. 2023-0589-NAC (Del. Ch. June 12, 2024), the court described a factual background in which the buyers of a
implied covenant of good faith and fair dealing
Claims for Impeding Milestones After Sale of Company Allowed to Proceed
By Francis Pileggi on
Posted in Chancery Court Updates
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).
Court of Chancery Denies Motion to Dismiss Implied Covenant of Good Faith and Fair Dealing Claim
By Francis Pileggi on
Posted in Chancery Court Updates
This post was authored by R. Montgomery (“Monty”) Donaldson, a Delaware business and commercial litigator for many years, a friend and colleague of Francis Pileggi, and a follower of this blog.
The implied covenant of good faith and fair dealing has received considerable play in Delaware in recent years. In fact, over the last half-decade,…
Chancery Applies Implied Covenant in Agreement that Waives Traditional Fiduciary Duties–and Affirms Shareholder Wealth Maximization Norm
By Francis Pileggi on
Posted in Chancery Court Updates
A recent Chancery decision is notable for its application of the implied covenant of good faith and fair dealing in a partnership agreement that waives all conventional fiduciary duties, and replaces them with a contract-based standard of conduct. The decision in Bandera Master Funds LP v. Boardwalk Pipeline Partners, LP, C.A. No. 2018-0372-JTL (Del.…
Supreme Court Explains the Implied Covenant of Good Faith and Fair Dealing
By Francis Pileggi on
Posted in Delaware Supreme Court Updates
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…
Delaware’s Implied Covenant of Good Faith and Fair Dealing
By Francis Pileggi on
Posted in Commentary
Delaware law imposes on every contract an implied duty of good faith and fair dealing. For those interested in the latest scholarship on this topic, a draft law review article by Professor Mohsen Manesh of the University of Oregon School of Law is required reading. See Mohsen Manesh, Express Contract Terms and the Implied …
Chancery Defines Good Faith for Purposes of Contract Law
By Francis Pileggi on
Posted in Chancery Court Updates
Policemen’s Annuity and Benefit Fund of Chicago v. DV Realty Advisors LLC, C.A. No. 7204-VCN (Del. Ch. Aug. 16, 2012).
Issue Addressed: How to define “good faith” for purposes of a limited partnership agreement that required a good faith determination for removal of a general partner.
Short Answer: The Court compared the common law…
Chancery Awards $3.2 million in Attorneys’ Fees in Contract Dispute
By Francis Pileggi on
Posted in Chancery Court Updates
ASB Allegiance Real Estate Fund v. Scion Breckenridge Managing Member LLC, C.A. No. 5843-VCL (Del. Ch. July 9, 2012). In this opinion the Court of Chancery awarded attorneys’ fees, based on a fee-shifting provision of the LLC agreement, of more than $3.2 million. The recent Chancery decision on the merits of this case, on…
Court of Chancery Analyzes Details of Claim for Breach of Implied Covenant of Good Faith and Fair Dealing for Limited Deadline Extension–and Denies Claim
By Francis Pileggi on
Posted in Chancery Court Updates
Amirsaleh v. Board of Trade of the City of New York, No. 2822-CC (Del. Ch., January 19, 2010), read opinion here. Read summaries on this blog of the several prior opinions of the Court of Chancery in this case here. In this latest opinion, the Court presumed the reader’s familiarity with the background…
Chancery Dismisses Fiduciary and Unjust Enrichment Claims Based on Terms of Contract
By Francis Pileggi on
Posted in Chancery Court Updates
Nemec v. Shrader, No. 3878-CC, and Wittkemper v. Shrader, No. 3934-CC (consolidated cases)(Del. Ch., April 30, 2009), read opinion here.
The factual basis of this Chancery Court decision involves shareholders who had signed agreements that governed the redemption of their shares. They filed suit when their company had redeemed their shares shortly prior to the corporation…