Delaware Business Litigation Report: Litigation

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Litigation

Delaware Business Litigation Report

Provides business-related litigation information which has been summarized by attorneys currently practicing in Delaware's courts. Searchable Case Summary Database contains summaries of court opinions released since January 2005. Provides links to other resources such as the Delaware Code and administrative rules.
By Morris James LLP

Post Frequency: 5/day

Last Entry: March 29, 2011 at 12:53:19

Court of Chancery Sanctions Counsel

Posted on August 20, 2008
Postorivo v. AG Paintball Holdings Inc., C.A. 2991-VCP (Del. Ch. Aug. 20, 2008) This decision carefully reviews the rules that attorneys must follow in Delaware when dealing with possibly privileged documents belonging to another party or in interviewing former employees of an opposing party...

Court of Chancery Upholds Waiver of Dissolution and Receiver Rights in LLC

Posted on August 19, 2008
R&R Capital, LLC v. Buck & Doe Run Valley Farms, LLC, C.A. 3803-CC (Del. Ch. Aug. 8, 2008) This decision upholds provisions in an LLC agreement that waived the rights of members to seek its dissolution or the appointment of a receiver. Thus, once again, the Court has held that the principle of freedom of contract will be enforced in Delaware...

Superior Court Bars Indemnification Claim Brought By Successful Chancery Plaintiffs

Posted on August 18, 2008
LaPoint v. Amerisourcebergen Corp., 2008 WL 2955511 (Del. Super. Ct. July 25, 2008). This decision will counsel plaintiffs to seek indemnification under a contract during the underlying action for breach of that contract, and not to initiate a subsequent, separate action...

Court of Chancery Explains Quasi Appraisal Remedy

Posted on May 30, 2008
Berger v. Pubco Corp., C.A. 3414-CC (Del. Ch. May 30, 2008) More often than we may expect, Delaware corporations commit errors in notifying stockholders of their right to an appraisal after a merger. For some reason, on several occasions the wrong version of the appraisal statute was sent to the stockholders, violating the statutory requirement that a current version accompany the notice of appraisal rights...

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Special Committee Releases Report on Delaware Superior Court Toxic Tort Litigation

Posted on May 27, 2008
A Special Committee appointed by the Delaware Superior Court has released its report and recommendations on Superior Court toxic tort litigation. The report (copy available here) followed the Special Committee’s investigation into concerns expressed by the Delaware State Chamber of Commerce that an increasingly large number of asbestos cases was adversely impacting the ability of the Delaware Superior Court to effectively and fairly adjudicate civil cases...

Court of Chancery Determines Complex Indemnification Claim

Posted on May 23, 2008
Zaman v. Amedeo Holdings Inc., C.A. 3115-VCS (Del. Ch. May 23, 2008) Determining when indemnification rights apply is sometimes tough to do. The claims for which indemnification are sought are often drafted so as to avoid alleging that the defendant is being sued for something he did as an officer or director, but instead allege that he acted in a personal or agency relationship such as a lawyer...

Superior Court Alters ADR Rules, Substitutes Mediation as Default Format

Posted on May 23, 2008
Effective March 1, 2008, the Superior Court amended Civil Rule 16 and repealed Civil Rule 16.1 to alter the compulsory alternative dispute resolution ("ADR") process mandated under Court rules. The amendments, found here, substitute mediation for arbitration as the Court's default format for ADR in the event the parties cannot agree...

District Court Dismisses Declaratory Relief, Contract Claim for Lack of Personal Jurisdiction

Posted on May 16, 2008
Solae, LLC v. Hershey Canada Inc., 2008 WL 2011914 (D. Del. May 9, 2008)Solae LLC (“Solae”), a Delaware LLC with a principal place of business in Missouri, brought a declaratory relief and breach of contract action in Delaware District Court against Hershey Canada, Inc...

Court of Chancery Upholds LLC Agreement Voting Rights

Posted on May 07, 2008
Fisk Ventuers LLC v. Segal, C.A. 3017-CC (Del. Ch. May 7, 2008)A Delaware LLC is a creature of the members' contract. Here the LLC agreement gave voting rights to a class of members that effectively gave them veto rights over certain actions. When those members exercised those veto rights, the other members sued claiming that constituted a breach of duty...

Court of Chancery Again Rejects a One Person Special Litigation Committee

Posted on May 05, 2008
Sutherland v. Sutherland, C.A. 2399-VCL (Del. Ch. May 5, 2008)Once again, the Court of Chancery has shot down a motion to dismiss a derivative suit based on the work of a one person SLC. This time while finding the SLC was independent, the Court felt its work was not adequate because of a lack of effort in reviewing accounting records...

Court of Chancery Interprets Limitations Law on Arbitration Demands

Posted on May 05, 2008
Personnel Decisions Inc. v. Business Planning Systems Inc., C.A. 3213-VCS (Del. Ch. May 5, 2008)The Delaware Arbitration Act has a statute of limitations that is not found in some other arbitration acts. Here the court held that a demand for arbitration was barred by that limitation and as a result, arbitration would be enjoined...

Court of Chancery Denies Inspection of Partnership Records

Posted on May 01, 2008
Madison Real Estate Immobilien-Anlagegesellschaft Beschrankt Haftende KG v. KanAm USA XIX LP, C.A. 2863-VCP (Del. Ch. May 1, 2008) This case sets out the law governing the right to inspect a limited partnership's records, particularly in the context of a possible tender offer...

Court of Chancery Permits Special Committee Discovery

Posted on April 25, 2008
Young v. Klaassan, C.A. 2770-VCL (Del. Ch. April 25, 2008) The use of a special committee of the board to avoid derivative suits over allegations of breach of duty is well recognized. What is less well known is how to use the work of such a committee...

Delaware Retains Top Ranking for Fairness of Litigation Climate

Posted on April 23, 2008
For the seventh year in a row, Delaware received the highest score in a nationwide survey of state liability systems undertaken by the U.S. Chamber Institute for Legal Reform. Delaware ranked at the top of eight of the twelve categories ranked, including judicial competence, judicial impartiality, timeliness of summary judgment or dismissal, treatment of class action suits, and overall treatment of tort and contract litigation...

Ebay Brings Stockholder Action In Court of Chancery Against Craigslist And Its Directors For Diluting Its Minority Stake

Posted on April 23, 2008
Yesterday eBay Domestic Holdings Inc. brought an action in the Court of Chancery, C.A. 3705-CC, against Craigslist and certain of its directors, challenging recent transactions implemented by the Craigslist board. According to this statement on its website, eBay acquired a minority ownership interest in Craigslist (28...

Superior Court Dismisses Negligent Misrepresentation Claim Because Contract Barred Reliance On Extra-Contractual Representations

Posted on April 22, 2008
Transched Sys. Ltd. v. Versyss Transit Solutions, LLC, 2008 WL 948307 (Del. Super. Apr. 2, 2008)This case illustrates Delaware’s objective theory of contract interpretation and underscores the importance of certain standard contractual provisions...

Court of Chancery Upholds Right To Nominate Directors

Posted on April 14, 2008
Levitt Corp. v. Office Depot, Inc., C.A. No. 3622-VCN (Del. Ch. April 14, 2008)This is a case of bylaws gone bad. While the obvious intent of the company's advance notice bylaw was to obtain notice of what directors a dissident slate might want to nominate, the language of the bylaws was fatally deficient...

Court of Chancery Explains Causation Rules for Attorney Fee Award

Posted on April 11, 2008
Helaba Invest Kapitalanlagegesellschaft v. Fialkow, C.A. No. 2683-VCL (Del. Ch. April 11, 2008) Attorneys who cause a benefit for stockholders are entitled to be awarded. However, the benefit must be caused by the litigation they filed and not just happen to follow the institution of litigation...

Court of Chancery Stays Action Against Bear Stearns In DE In Favor Of NY Proceedings

Posted on April 10, 2008
In re The Bear Stearns Companies, Inc., Shareholder Litig., C.A. No. 3643-VCP (Del. Ch. Apr. 9, 2008).In an opinion issued yesterday by Vice Chancellor Parsons (HT: M&A Law Prof and Pileggi), which you can access here, the Court of Chancery ordered a stay of the Delaware actions filed against Bear Stearns in favor of those filed in New York...

Preeminence of Delaware Courts for Business Litigation Highlighted

Posted on April 10, 2008
In the most recent edition of the ABA's Business Law Today publication, Vice Chancellor Donald F. Parsons, Jr., of the Delaware Court of Chancery, and Judge Joseph R. Slights, III, of the Delaware Superior Court review the history and development of the Delaware courts as the leading business courts in the country...

Court of Chancery Finds Duty To Speak

Posted on April 10, 2008
Corporate Property Associates 14 Inc. v. CHR Holding Corp., C.A. No. 3231-VCS (Del. C. April 10, 2008) In this case of first impression, the Court of Chancery held that a corporation had a duty to a warrant holder to truthfully answer its inquiries about corporate plans...

Delaware Bankruptcy Court Applies Caremark to Officers

Posted on April 09, 2008
Miller v. McDonald, C.A. 07-51350 (Bankr. Del. April 9, 2008)In a case of apparent fist impression, a bankruptcy court in Delaware has held that Caremark duties apply to corporate officers as well as directors. Thus, corporate officers also have the duty to exercise reasonable care in oversight of corporate operations in their area of responsibility...

Delaware Corporate and Commercial Litigation Blog

Posted on April 08, 2008

Court of Chancery Confirms Limits of Inspection Litigation

Posted on March 31, 2008
TravelCenters of America LLC v. Brog, C.A. 3516-CC (Del. Ch. March 31, 2008)This decision confirms that for limited liability companies the rule applies from corporate law that a suit for inspection of books and records is a limited case that may not also include other claims such as breach of fiduciary duty.

Court of Chancery Upholds Proxy Power

Posted on March 28, 2008
In Re IAC/Interactivecorp, C.A. 3486-VCL (Del. Ch. March 28, 2008) In this widely reported decision, the Court of Chancery applied well established principles of contract construction to determine when a proxy would be upheld. Once again, the Court rejected an attempt to modify the contract language to imply a duty of good faith and fair dealing, or a fiduciary duty that would override the rights given in the contract.

Court of Chancey Holds Only Compulsory Counterclaims Warrant Advancement

Posted on March 28, 2008
Reinhard & Kreinberg v. The Dow Chemical Co., C.A. 3003-CC (Del. Ch. March 28, 2008)Corporate bylaws sometimes provide advancement rights in litigation filed by a director, but that is rare. However, when a director is sued, the question remains if he has advancement rights in that circumstance, and whether he may get those rights to cover a counterclaim in the absence of a bylaw right to do so when bringing litigation...

Court of Chancery Limits Advancement Rights Upon Bylaw Amendment

Posted on March 28, 2008
Schoon v. Troy, C.A. 2362-VCL (Del. Ch. March 28, 2008) Directors who rely on advancement rights under a corporate bylaw need to be aware that those rights may be lost if the bylaw is amended. Delaware law, as this decision notes, permits elimination of advancement rights in a bylaw at least up to the moment those rights "vest" by the filling of a suit that entitled the director to advancement...

Supreme Court Affirms PHLX Settlement

Posted on March 27, 2008
In The Matter Of The Philadelphia Stock Exchange Inc., Del. Sup., C.A. 613/615, 2007 (Del. March 27, 2008)This comprehensive decision explains Delaware law on the settlement of a class action when the proceeds of a settlement will involve buyers, sellers, and holders of stock in a Delaware corporation...

Class Action Filed Against Bear Stearns in Delaware Seeking to Enjoin Acquisition by JPMorgan

Posted on March 24, 2008
Last Thursday, a class action complaint was filed against Bear Stearns and its directors in the Court of Chancery. The complaint alleges that the company has failed to maximize shareholder value by agreeing to be purchased by JPMorgan Chase for $2 per share...

Superior Court Denies Motion to Dismiss or Stay First-Filed Delaware Action

Posted on March 24, 2008
Certain Underwriters at Lloyds Severally Subscribing Policy Number DP359504 v. Tyson, 2008 WL 660485 (Del. Super. March 7, 2008)This case is an insurance coverage dispute between Tyson Foods, Inc., and certain of its underwriters over damages caused by Hurricane Katrina...

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