Litigation

Insider Trading and Delaware Law

Posted on April 01, 2011
Professor Bainbridge discusses the Delaware law aspects of insider trading, including leading Delaware decisions on the topic, here,  in connection with reports about possible insider trading accusations involving one of Warren Buffett's top aides...

Judge Posner on Delaware Corporate Law

Posted on March 30, 2011
In CDX Liquidating Trust v. Venrock Associates, No.10-1953 (7th Cir. March 29, 2011), read opinion here, Judge Richard Posner, a reknowned member of the U.S. Court of Appeals for the 7th Circuit , writes a decision for that Court which analyzes an applies the following aspects of Delaware corporate law in a case which involved claims that directors, who were designees of lenders and preferred shareholders, breached their fiduciary duties in connection with the sale of the company and the terms of the debt which they structured for the company...

Court of Chancery Awards Plaintiffs Full Amount of Attorneys' Fees Requested in Dispute Involving Top-up Option Used to Facilitate Two-Step Merger

Posted on March 25, 2011
  In Olson v. EV3, Inc., et al., C.A. No. 5583-VCL (Del. Ch. Feb. 21, 2011), the Court of Chancery addressed the issue of a post-settlement fee petition for a plaintiff who challenged the use of a top-up option to facilitate a two-step acquisition...

SCOTUS Rules on Materiality In Securities Case

Posted on March 23, 2011
The U.S. Supreme Court yesterday ruled in a securities case on the issue of materiality.  Matrixx Initiatives, Inc. v. Siracusano (No. 09-1156) (Mar. 22, 2011). Read opinion here. It has already been the subject of learned commentary by several law professors and others, so until I can provide my own overview, I refer readers to the following highlights: Professor Barbara Black reviews the case here...

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Disclosure Deficiencies Force Court to Enjoin Merger Vote

Posted on March 19, 2011
In an action arising out of the proposed merger between Atheros Communications Inc. and Qualcomm Incorporated, the Court of Chancery preliminarily enjoined Atheros and its board from conducting a stockholder meeting or stockholder vote on the proposed merger which was scheduled for March 7, 2011...

Chancery Allows Unsealing of Allred Letter to Former HP CEO Hurd

Posted on March 18, 2011
Espinoza v. Hewlett-Packard Company, C. A. No. 6000-VCP (Del. Ch. Mar. 17), read 70-page Court of Chancery opinion here. The background of this decision has been referenced in the popular press for many months. It involves the former CEO of Hewlett-Packard, Mark Hurd...

Billionaire Lerner Fights in Chancery to Retrieve Investment Funds

Posted on March 18, 2011
Paige Capital Management LLC v. Lerner Master Fund LLC. This is a pending trial in the Delaware Court of Chancery and courtroomview.com provides us with a free excerpt of the start of their video/audio coverage of the trial here, and the entire trial for a price here...

Happy St. Patrick's Day

Posted on March 17, 2011
It has been said that "everyone is Irish" on St. Patrick's Day. Best wishes to all my Irish friends.

Chancery Refuses to "Keep Delaware Case Open" Pending Application for Attorneys' Fees in Related Texas Class Action

Posted on March 17, 2011
In Re Dynegy Inc. Shareholders Litigation, C. A. No. 5739-VCS (Del. Ch. Mar, 16, 2011), read letter ruling here. This three-page letter decision is short on length but long on potential significance. It should be read as a postscript to the report of the Special Counsel in Scully v...

Corporate Charter Move to Ohio Now on Hold

Posted on March 17, 2011
Prof. Larry Ribstein, known to readers of these pages as one of the country's foremost experts on LLCs, also is widely published on the topic of jurisdictional competition. He comments here on the recent apparent reversal of Abercrombie & Fitch's plan to move its state of incorporation from Delaware to Ohio...

Efforts to Require Mediation for Lawsuits in Italy Met with Resistance

Posted on March 15, 2011
As reported recently on the Wall Street Journal Law Blog here, efforts to require mediation for lawsuits in Italy have met with resistance from a national union that represents lawyers.

Special Counsel Addresses Delaware Law on "Forum Shopping" and Collusive Settlements in Class Actions

Posted on March 14, 2011
Scully v. Nighthawk Radiology Holdings, Inc., C.A. No. 5890-VCL (Mar. 11, 2011)(Report of Special Counsel). This Report concluded that there was neither forum shopping nor collusive behavior in the settlement of a class action related to the $170 million merger of Nighthawk Radiology and Virtual Radiologic Corporation...

Chancery Clarifies Rights to Books and Records Regarding Special Committee Investigation

Posted on March 14, 2011
Louisiana Municipal Police Employees Retirement System v. Morgan Stanley & Co., Inc., C.A. No. 5682-VCL (Del. Ch. Mar. 4, 2011), read opinion here. This is a decision by the Delaware Court of Chancery which granted in part and denied in part a motion to dismiss a complaint pursuant to DGCL Section 220 in which a shareholder sought books and records regarding the investigation of a board's special committee and its counsel...

U.S. Supreme Court Finds Corporations Have No "Personal Privacy" Under FOIA

Posted on March 13, 2011
The United States Supreme Court in Federal Communications Commission v. AT&T Inc., No. 09-1279 (U.S., Mar. 1, 2011), found that corporations have no 'personal privacy' for the purposes of the Freedom of Information Act ('FOIA') which requires federal agencies to make records and documents publicly available upon request, unless they fall within one of several statutory exemptions...

Rule 1.16 Applied to Grant Motion to Withdraw of Counsel

Posted on March 13, 2011
In my regular ethics column for The Bencher, the national publication of The American Inns of Court, in the current issue, I write here about a recent decision of the Rhode Island Supreme Court which granted a motion to withdraw of counsel due to non-payment of fees...

Court of Chancery Enjoins Shareholder Vote and Enforcement of Deal Protection Provisions on Del Monte Merger

Posted on March 13, 2011
The Court of Chancery in  In Re Del Monte Foods Company Shareholders Litigation, Consol. C.A. No. 6027-VCL (Del. Ch. Feb. 14, 2011), read opinion here, on a preliminary record, enjoined for twenty days the Del Monte Board and the acquiring entities from proceeding with a stockholder vote on the proposed $5...

Chancery Denies Request for Interlocutory Appeal of Summary Judgment Denial

Posted on March 13, 2011
Grunstein v. Silva, C. A. No. 3932-VCN (Del. Ch. Mar. 2, 2011), read letter ruling here. Reviews of the four prior decisions by the Court of Chancery in this matter are available here. At least in part, the genesis of this case is the attempt by the plaintiff to enforce a billion dollar oral agreement...

Hallmark Receives Welcome Greeting: Chancery Approves Recapitalization of Affiliate

Posted on March 09, 2011
S. Muoio & Co. LLC v. Hallmark Entertainment Investments Co., C.A. No. 4729-CC ( Del. Ch. Mar. 9, 2011), read 63-page Delaware Court of Chancery opinion here. Hat tip to Wilmington corporate litigator Kurt Heyman for sending me this opinion today...

Delaware Court of Chancery 2010 Annual Report and Statistics

Posted on March 09, 2011
For those interested in the 2010 Annual Report of the Delaware Court of Chancery with statistical information regarding filings and dispositions, "you are in business". Read the report here. Interestingly, the volume of court filings and dispositions has not dramatically increased, on average, over the last 10 years (as I read the report).

Fraudulent Inducement Rejected as Defense to Contract Enforcement Action

Posted on March 07, 2011
Corkscrew Mining Ventures, Ltd. v. Preferred Real Estate Investments, Inc., C.A. No. 4601-VCP (Del. Ch. Feb. 28, 2011), read opinion here. Short Overview: The Court of Chancery granted a motion for summary judgment to the plaintiff who sought specific enforcement of a financing agreement to purchase securities in a Delaware limited liability agreement...

Delaware Supreme Court Affirms Use of Poison Pill to Reject Attempt to Gain Control of Barnes & Noble

Posted on March 03, 2011
 On March 3, 2011, the Delaware Supreme Court issued a one-page decision affirming Vice Chancellor Strine's decision in Yucaipa American Alliance Fund II, L.P. v. Riggio, C.A. No. 5465-VCS (Del. Ch. Aug. 12, 2010), dismissing claims of breach of fiduciary duties and finding that Barnes & Noble ('B&N') had proven at trial that its adoption and use of a rights plan was a good faith, reasonable response to a threat to B&N and its shareholders from Ron Burkle...

Does Delaware Need Another Law School? Answer: No!

Posted on March 03, 2011
Readers of this blog are likely aware that the population of the entire State of Delaware is much less than one million residents, which is smaller than most major cities. Delaware has one law school withing its borders and about 5 more within a short driving distance to nearby Philadelphia and the surrounding area...

Delaware Supreme Court Affirms Finding of No Discrimination Against Audience at Tyler Perry Movie

Posted on March 02, 2011
Boggerty v. Stewart, No. 489-2010 (Del. Supr. Feb. 17, 2011). See overview of affirmed trial court opinion which provides more background facts, available here. The genesis of this case was a complaint about the manager of a movie theater telling an audience before the start of a Tyler Perry movie to turn off their cell phones before the movie started...

Chancery Clarifies Post-Trial Ruling Per Rule 59(f)

Posted on March 02, 2011
Naughty Monkey LLC v. MarineMax Northeast LLC, C. A. No. 5095-VCN (Del. Ch. Feb. 17, 2011),  read Court of Chancery's letter ruling here. Despite the name of the plaintiff, this case involves serious business. Issue addressed: The Court treated a motion to clarify as a motion for reargument under Chancery Rule 59(f)...

Court Declines to Restore Corporate Existence of Dissolved Corporation to Address Lawsuit Filed Prior to Dissolution

Posted on March 02, 2011
Where a dissolved corporation was still in the winding up phase and under the operation of its directors, the Court of Chancery denied a motion to restore its corporate existence and appoint a trustee while litigation filed prior to the filing of the dissolution was still pending...

Chancery Clarifies Distinction Between General and Special Damages

Posted on March 01, 2011
Pharmaceutical Produce Development, Inc. v. TVM Life Science Ventures VI, L.P., C.A. No. 5688-VCS (Del. Ch. Feb. 16, 2011). Short Overview This is a somewhat unremarkable decision involving alleged breaches of contract and fraud--except for its clarification of the distinction between "general damages" and "special damages"...

Chancery Declines to Dissolve and LP and Declines to Appoint Receiver of Failing Investment Fund

Posted on February 28, 2011
Steven Mizel Roth IRA v. Laurus U.S. Fund, L.P., C.A. 5566-VCN (Del. Ch. Feb. 25, 2011), read opinion here. This Court of Chancery opinion rejected a request to dissolve a limited partnership and refused to appoint a receiver in the context of an investment fund that was in liquidation mode but was not dissolved nor was it winding up as that term in used in the statute...

Chancery Declines to Dissolve LP and Declines to Appoint Receiver of Failing Investment Fund

Posted on February 28, 2011
Steven Mizel Roth IRA v. Laurus U.S. Fund, L.P., C.A. 5566-VCN (Del. Ch. Feb. 25, 2011), read opinion here. This Court of Chancery opinion rejected a request to dissolve a limited partnership and refused to appoint a receiver in the context of an investment fund that was in liquidation mode but was not dissolved nor was it winding up as that term in used in the statute...

U.S. Supreme Court Justice Clarence Thomas

Posted on February 28, 2011
One of my favorite U.S. Supreme Court Justices is The Hon. Clarence Thomas and his remarks recently at a gathering of law students are words to live by. They are quoted below via The Wall Street Journal's Law Blog. 'And what I think is important for you all, is that when you see people standing in defense of what's right, that you make sure that your voice is not remembered as one of the silent,' Thomas said...

Court of Chancery's 2011 Electronic Discovery Guidelines

Posted on February 27, 2011
The Delaware Court of Chancery's Guidelines Regarding the Preservation of Electronically Stored Information (ESI) were previously reviewed here on this blog, but now Kevin F. Brady of Connolly Bove Lodge & Hutz LLP in Wilmington, a nationally recognized electronic discovery expert, provides a more comprehensive commentary on the Court's ESI guidelines, issued last month, in a post he authored, available here, on The Harvard Law School Forum of Corporate Governance and Financial Regulation...

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