Tag Archives: rule 12(b)(6)

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 Exercises Jurisdiction in Dispute Among Shareholders of Foreign Corporation

Darby Emerging Market Fund, L.P. v. Ryan,  Consol. C.A. No. 8381-VCP (Del. Ch. Nov. 27, 2013). This Chancery decision addressed whether the Court had equitable jurisdiction over a dispute among shareholders of a foreign entity. Delaware’s court of equity relied on the well-worn “clean up doctrine”, which allows it to exercise equitable jurisdiction over an … Continue Reading

Chancery Allows Claim for Breach of Fiduciary Duty for Approval of Stock Options in Violation of Stock Option Plan

Pfeiffer v. Leedle, C.A. No. 7831-VCP (Del. Ch. Nov. 8, 2013). Issue Addressed:  Whether the approval of stock option grants that exceeded the maximum number of stock options allowed under the stock incentive plan was the basis for a breach of fiduciary duty claim against both the board that approved it and the executive who … Continue Reading

Supreme Court Rejects Contractual Indemnification Claim

Winshall v. Viacom International, Inc., Del. Supr., No. 39, 2013 (Oct. 8, 2013).  Issue Addressed: The Supreme Court affirmed a Chancery ruling that Viacom was not entitled to  contractual indemnification, and thus was required to release escrow funds. A prior Supreme Court decision in this case from July 2013, regarding arbitrability, was highlighted on these pages … Continue Reading

Chancery Addresses Disclosure Obligations in Connection with Directors’ Elections

Red Oak Fund, L.P. v. Digirad Corp., C.A. No. 8559-VCN (Del. Ch. Aug. 5, 2013). Issue Addressed: In the context of a challenge to the election of directors, the Court of Chancery considered claims that the disclosure obligations of the directors were breached. Short overview: This short letter opinion in the context of a Section … Continue Reading

Personal Jurisdiction over Foreign Defendants Examined

Boulden v. Albiorix, Inc., C.A. No. 7051-VCN (Del. Ch. Jan. 31, 2013, revised Feb. 7, 2013). Issue Addressed This case addressed whether personal jurisdiction was appropriate by a court in Delaware on the various foreign residents involved. Short Overview The Court reviews the requirements for personal jurisdiction under Delaware’s long-arm statute, as well as the … Continue Reading

Chancery Retains Jurisdiction Despite California Forum Clause

Duff v. Innovative Discovery LLC, C.A. No. 7599-VCP (Del. Ch. Dec. 7, 2012). Issues Addressed: The Court of Chancery addressed the following issues in this opinion:  (1) Whether a forum selection clause providing for “sole” jurisdiction in California courts should be honored when a conflicting forum selection clause in a related agreement provided for jurisdiction … Continue Reading

Dismissal of One Derivative Lawsuit Not Bar to Second Derivative Claim by Second Stockholder

Louisiana Municipal Police Employees’ Retirement Systems v. Pyott, C.A. 5795-VCL (Del. Ch. June 11, 2012). Issues Addressed Whether collateral estoppel, Rule 23.1 or Rule 12(b)(6) apply to require the dismissal of a Delaware derivative suit based on the dismissal in California of a related derivative suit in which a federal court granted a Rule 23.1 … Continue Reading

Chancery Rejects Motion for Attorneys’ Fees Based on Complaint Mooted by Actions of Board

Freedman v. Adams, C.A. No. 4199-VCN (Del. Ch. March 30, 2012). Issue Addressed The Court of Chancery addressed the standard for awarding attorneys’ fees when there has been a stipulated dismissal of a derivative action which was largely mooted by measures taken by the defendant board of directors shortly after the complaint was served. Background The complaint … Continue Reading

Chancery Denies Motion to Dismiss Claims for Breach of Fiduciary Duty in Connection with Merger

Frank v. Elgamal, C.A. No. 6120-VCN (Del. Ch. March 30, 2012).  See summary of prior Chancery decision in this matter highlighted on these pages. Issue Addressed Whether it was premature to rule on a fiduciary duty claim based on the entire fairness standard, at the motion to dismiss stage. Answer:  Yes. Summary of Holding In this challenge … Continue Reading

Delaware Supreme Court Reverses Chancery on Federal Motion to Dismiss Standard

Cambium Ltd. v. Trilantic Capital Partners, No. 363, 2011 (Del. Supr, Jan. 20, 2012), read Order here. This Order of the Delaware Supreme Court applied the recent decision of Delaware’s High Court in the Central Mortgage case in which it clarified that Delaware has not adopted the federal standard for motions to dismiss under Rule of Civil … Continue Reading

Court Dismisses Claims for Breach of Implied Covenant of Good Faith and Fair Dealing; Provides Commentary on Rule 12(b)(6) Pleading Standard

In Winshall v. Viacom Int’l., C. A. No. 6074-CS (Del. Ch., Nov. 10, 2011), read opinion here, the Delaware Court of Chancery granted a motion to dismiss a claim for breach of the implied covenant of good faith and fair dealing in a dispute over post-merger earn-out payments. What is also of note for practitioners … Continue Reading

Chancery Court Allows Purchaser to Continue Post-Closing Dispute Based on Contract Claims

BAE Systems Information and Electronic Systems Integration Inc. v. Lockheed Martin, (Del. Ch., Feb. 3, 2009), read opinion here. We are fortunate to have the following review and analysis of this case prepared by Kevin Brady,  a partner in the Business Law Group at the Wilmington, Delaware, office of Connolly Bove.   In this Delaware Chancery Court decision involving a … Continue Reading

Fiduciary Duty Claims Survive Motion to Dismiss, But Not Disclosure Claims

Brinckerhoff v. Texas Eastern Products Pipeline Company, LLC ,  (Del. Ch., Nov. 25, 2008), read opinion here. In this decision, the Chancery Court denied a motion to dismiss based on Rule 12(b)(6), in connection with a fiduciary duty claim against certain directors. The Court found that the simple allegation that “the board of directors” authorized the transaction at … Continue Reading
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