A recent Court of Chancery decision provides a few basic but important statements of Delaware law that are useful for the toolbox of corporate and commercial litigators. In Klein v. ECG Topco Holding, LLC, C.A. No. 2021-0701-LWW (Del. Ch. July 8, 2022), the Court pithily decides issues that arose in the context of the
rule 12(b)(6)
Updated “Guidelines for Persons Litigating in the Court of Chancery”
The Delaware Court of Chancery recently published an updated version of Practice Guidelines. Weighing in at 38 single-spaced pages, it must be read by both Chancery litigators and those out-of-state counsel who litigate Chancery cases. The original Practice Guidelines highlighted on these pages, promulgated in 2012, were a mere 18-pages in length.
Courtesy of…
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 Recognizes Reverse Veil-Piercing
Regular readers of these pages may recall multiple prior blog posts on both veil-piercing and reverse veil-piercing over the last 16 years. Serious students should review the book on the topic by the renowned corporate law scholar, and a friend of this blog, Professor Stephen Bainbridge. The Delaware Court of Chancery recently recognized reverse-veil-piercing in…
Del. high court says undisclosed post-merger role made Tower CEO self-interested, board ill informed
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.
A Delaware Supreme Court majority recently revived a shareholder suit that claimed Towers Watson & Co.’s CEO put his interests ahead of the investors in a merger with Willis…
Claims by Long-Term Close Friend Proceed Against Faithless Business Partner
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 Addresses Usurpation of Corporate Opportunity
The following synopsis was prepared by Chauna Abner, an attorney in the Delaware office of Eckert Seamans.
In Leased Access Preservation Association v. Ivan Thomas, et al., C.A. No. 2019-0310-KSJM, Order (Del. Ch. Jan. 8, 2020), a non-profit, non-stock corporation filed suit against Ivan Thomas, a former board member of the plaintiff, alleging, in…
Chancery finds failure to allege conspiracy means dismissal of ex-director and his foreign firms
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 Delaware Court of Chancery recently dismissed the remaining defendants from a lawsuit that Wanu Water Inc.’s founder filed against directors and shareholders who allegedly conspired to seize control,…
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…
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…