In the context of explaining why certain challenges to a stockholders’ agreement were not barred by laches and were otherwise timely, the Delaware Court of Chancery recently recited several enduring fundamental principles of Delaware corporate law and corporate governance in the gem of a decision styled: West Palm Beach Firefighters’ Pension Fund v. Moelis &
Chancery Allows Claims for Breach of Both Fiduciary Duty and Contract Against LLC Manager
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.
Chancery Addresses Laches and Tolling of Statute of Limitations Pending Class Action Complaint
In Re Nine Systems Corporation Shareholders Litigation, Consol. C.A. No. 3940-VCN (Del. Ch. July 31, 2013).
Issues addressed: (1) inquiry notice; (2) laches; (3) tolling of the statute of limitations (and whether it is a suspension or renewal) while a class action complaint is pending–and prior to denial of class certification.
Useful Takeaways
Chancery Bars Claim that Stock Options Were Exercised
Eluv Holdings (BVI) Ltd v. Dotomi, LLC, C.A. No. 6894-VCP (Del.Ch. Mar. 26, 2013).
This Chancery opinion addresses the claims of a couple who sought to enforce an option for stock in a start-up company. The court explained why the inordinate number of years that transpired before the claim was formally pursued was the
Chancery Finds that Laches Partially Bars Request for Partnership Records
Bean v. Fursa Capital Partners, LP, C.A. No. 7566-VCP (Del. Ch. Feb. 28, 2013).
Issue Addressed: Whether the terms of a limited partnership agreement required the general partner to provide audited financial statements to a limited partner. Short Answer: The issue presented cannot be determined on a motion for partial summary judgment.
Chancery Grants Relief on Both Fiduciary Duty and Contract Claims Against Member of Joint Venture
In Re: Mobilactive Media, LLC, Consol. C.A. No. 5725-VCP (Del. Ch., Jan. 25, 2013). What this Case is About: This decision addresses claims between two members of a joint venture based on both breach of contract and breach of fiduciary duty. Both claims were allowed to proceed and both claims prevailed as non-duplicative.
Bankruptcy Court Applies Laches, Not Statute of Limitations to Professionals Who Allegedly Conspired With Fiduciaries
Miller v. Kirkland & Ellis LLP, Adv. No. 12-50713 (PJW) (Bankr. D. Del. Oct. 2, 2012).
Tara Lattomus of Eckert Seamans prepared this case summary.
Issue Addressed
Whether the two year statute of limitations or the equitable doctrine of laches applied to claims against attorneys who allegedly conspired with corporate fiduciaries to defraud their
Promissory Estoppel Claim Results in Personal Liability
Envo, Inc. v. Walters, C.A. No. 4156-VCP (Del. Ch. July 18, 2012).
Issue Presented: Whether promissory estoppel was established to impose personal liability in connection with the poorly documented sale of a business when the acquiring entity was never properly formed.
Short Answer: Yes.
Brief Overview
This 38-page post-trial decision involved an
Chancery Allows Amendment of Complaint to Seek Equitable Tolling of Breach of Fiduciary Duty Claims Against a Family Controlled Entity
Buerger v. Apfel, C.A. No. 6539-VCL (Del. Ch. March 15, 2012).
Issue Presented
Whether equitable tolling could save claims that would otherwise be barred by the applicable statute of limitations or latches, which defendants argued should block any challenge to certain stock options and other related-party transactions.
Background
The disputed transactions involve a company
Chancery Rules on Waiver and Arbitrability
Halpern Medical Services, LLC v. Greary, Del. Ch., C.A. No. 6679-VCN (Feb. 17, 2012).
Issues Addressed
This case serves as a refresher on several issues that are frequently argued before the Court of Chancery: (1) the arbitrability of a claim under a contractual arbitration clause; (2) waiver of the right to invoke arbitration; and