Litigation
Delaware Corporate and Commercial Litigation Blog 
Summary of Delaware court decisions of import to corporate and commercial law, primarily from the Delaware Chancery Court and Delaware Supreme Court.
Post Frequency: 2.1/day Last Entry: November 20, 2009 at 10:37:59 Recent Entries: 702
By Francis G. X. Pileggi, Esq.
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ABA Seminar on Delaware Corporate Law and Potentially Increasing Federalization
Posted on November 20, 2009I am blogging from the ABA Business Law Section Fall Meeting in D.C. This post is the product of the notes taken at the following panel presentation: Federalization of Corporation Law in a Time of Crisis - Which Institutions are Best Able to Improve Corporate Governance and Performance Going Forward...
Live Video of Chancery Court Trial in Amirsaleh v. NY Board of Trade
Posted on November 18, 2009Amirsaleh v. NY Board of Trade. A short video clip of the trial in this case that is ongoing this week in the Delaware Court of Chancery is available here, courtesy of www.courtroomview.com Prior decisions of the Court of Chancery in this case highlighted on this blog are available here and here.
Court of Chancery Decides Fiduciary Duty Claims Against LLC Manager and Allows Dissolution Claim to Proceed
Posted on November 14, 2009Lola Cars Int'l Limited v. Krohn Racing, LLC, No. 3379-VCN (Del. Ch. Nov. 12, 2009). This 31-page decision of the Delaware Court of Chancery is chock full of substantive Delaware LLC law that is of practical usefulness for business lawyers and litigators...
Delaware's Competition for Control of Corporate Governance
Posted on November 14, 2009Professor Steve Bainbridge writes here about the recent increase in the possibility (risk?) of greater federal encroachment into the governance of the internal affairs of corporations, expanding on the scholarship of Professor Mark Roe that we have previously highlighted here...
Court of Chancery Denies Motion for Protective Order for Depositions
Posted on November 12, 2009In Brandt v. CNS Response, Inc., Nos. 4867 and 4688-CC (Del. Ch. Nov. 12, 2009), read letter decision here, the Court of Chancery denied a motion for protective order that was filed in an effort to prevent depositions of two witnesses in this expedited matter seeking injunctive relief that is scheduled for a trial on December 1...
Chief Justice of Delaware Supreme Court on ABA Seminar Panel Discussing Possible Increased Federalization of Corporate Law
Posted on November 10, 2009The ABA Business Law Section's Fall Meeting at the Ritz-Carlton in Washington, D.C., on November 20, 2009, will feature a panel that includes the Chief Justice of the Delaware Supreme Court and the newest member of the Delaware Court of Chancery, who will discuss the following timely topic: Federalization of Corporation Law in a Time of Crisis - Which Institutions are Best Able to Improve Corporate Governance and Performance Going Forward Presented by: Business and Corporate Litigation Committee and The Committee on the Federal Regulation of Securities Moderator: Rolin P...
Court of Chancery Rules on Admissibility of Expert Testimony in eBay v. Craigslist
Posted on November 10, 2009eBay Domestic Holdings, Inc. v. Newmark, et al., No. 3705-CC (Del. Ch. Nov. 9, 2009), read letter decision here. See summaries of multiple prior decisions by the Chancery Court in this case here. In this short letter ruling, the Court of Chancery ruled on motions in limine regarding the admissibility of evidence to support the "unclean hands" defense and expert testimony...
Delaware Supreme Court Affirms Trial Court's Determination of Damages Awarded for Breach of Contract and Misrepresentation, as Well as Liability on Assignor Despite Assignment
Posted on November 06, 2009Reserves Development LLC v. Crystal Properties LLC, (Del. Supr., Nov. 4, 2009), read opinion here. Although this is an appeal from a Delaware Superior Court decision, prior decisions of the Delaware Supreme Court and Delaware Court of Chancery involving related aspects of this imbroglio, were highlighted on this blog here, here and here...
Court of Chancery Grants Stay of Discovery Pending Dispositive Motion
Posted on November 04, 2009Airborne Health Inc. v. Squid Soap, LP., No. 4410-VCL (Del. Ch., Oct. 28, 2009), read letter ruling here. In this two-page letter decision, the Court of Chancery cited to several cases to support its position that whether or not to stay discovery is a discretionary matter for the Court, and reasoned that a potentially case-dispositive motion at the beginning of the case is a "frequent and logical predicate for the Court to consider granting a stay...
Court of Chancery Allows Amendment to Complaint; Rejects Request for Default Judgment
Posted on November 04, 2009New Castle Shopping, LLC v. Penn Mart Discount Liquors, Ltd., et al., No. 4257-VCL (Del. Ch., Oct. 27, 2009), read letter decision here. [This ruling is among the first written decisions from the newest member of the Court, within the same month of his investiture...
Fiduciary Duty Argued at the U.S. Supreme Court
Posted on November 03, 2009Jones v. Harris is a case that was argued at the U.S. Supreme Court yesterday and is the focus of much scholarly commentary by corporate law professors around the blogosphere. We previously blogged here and here about the background of the case, which deals, among other things, with a federal statute that imposes a fiduciary duty on those who govern mutual funds...
Some Judges Are Less Understanding Than Others
Posted on November 02, 2009We have all encountered tough judges, but the one depicted in the below drawing may be tougher than most, regardless of one's views on the Second Amendment. Courtesy of Charles Fincher at www.lawcomix.com
Court of Chancery Explains Policy Reasons For Selection of Lead Counsel in Class Action; Rejects Motion to Reconsider
Posted on October 31, 2009Dutiel v. Tween Brands, Inc., No. 4743-CC and No. 484-CC (Oct. 28, 2009), read letter decision here. Read prior Chancery Court decision in this case highlighted on this blog here. In this most recent ruling, the Chancellor denied a motion for reconsideration of the Court's selection of lead counsel in a consolidated class action...
Chancery Court Rejects Request for Fees and Costs Despite Granting Second Motion to Compel Discovery Against eBay
Posted on October 30, 2009eBay Domestic Holdings, Inc. v. Newmark, No. 3705-CC (Del. Ch. Oct. 29, 2009), read opinion here. See prior Chancery Court decisions in this case summarized here and here. This letter decision rules on a Motion to Compel discovery responses and continuations of depositions...
Court of Chancery Addresses Application of Entire Fairness and Business Judgment Review of Merger Involving a Controlling Stockholder and a Third-Party Buyer
Posted on October 29, 2009In re John Q. Hammons Hotels Inc. Shareholder Litigation, No. 758-CC (Del. Ch. Oct. 2, 2009), read opinion here. Kevin Brady, a highly respected Delaware litigator, prepared this synopsis. This dispute arose out of the merger involving John Q. Hammons Hotels ('JQH') pursuant to which the holders of Class A common stock received $24 per share in cash...
Chancery Court Declines Jurisdiction in Dispute between Two New York Entities
Posted on October 28, 2009Third Avenue Trust v. MBIA Insurance Corp., No. 4486-VCS (Del. Ch. Oct. 28, 2009), read opinion here. This Court of Chancery case involves the rather uncommon result in which the Court declined to exercise jurisdiction over a dispute. Although it may be admittedly simplistic to highlight this case in such a manner, the opinion by the Court of Chancery in this matter can be characterized, on a rudimentary level, merely as relinquishing jurisdiction over a case that is based on New York law between "New York-centered parties" and does not present a sufficient policy justification for the Delaware Courts to adjudicate a dispute between entities regulated by the New York Insurance Department...
Chancery Court Discusses Fiduciary Duty of Director to Disclose Information While Negotiating Release with Corporation and Whether Lack of Disclosure Could Invalidate the Release
Posted on October 27, 2009Xu v. Heckmann Corporation, No. 4673 (Del. Ch. October 26, 2009), read opinion here. The Chancellor of the Delaware Court of Chancery in this opinion decides a Motion to Dismiss Counterclaims involving issues related to fraud allegations against a director...
SCOTUS Justice Clarence Thomas Talks about Oral Argument and Too Many Ivy League Colleagues
Posted on October 26, 2009One of my favorite U.S. Supreme Court justices, Clarence Thomas, was quoted here in a comparatively rare public question and answer session. He comments about his views on oral argument and why he thinks there are too many members on the SCOTUS bench from Ivy League schools and not enough "geographical diversity" on the nation's High Court...
Former Employee Dismissed For Lack of Personal Jurisdiction; Court Reinforces Heavy Burden to Succeed on Forum Non Conveniens Grounds
Posted on October 26, 2009In LeCroy Corp. v. Hallberg, No. 4328-VCP (Del. Ch. Oct. 7, 2009), read opinion here, the Court of Chancery granted Defendants' motion to dismiss an individual defendant from the action due to a lack of personal jurisdiction but denied defendants' motion to dismiss based on forum non conveniens...
Court Finds No Irreparable Harm; Declines To Expedite Action Challenging Stock Option Plan
Posted on October 26, 2009Retirement Board of Allegheny County v. Rothblatt, et al., No. 4946-CC (Del. Ch., Oct. 13, 2009), read opinion here. Kevin Brady, a distinguished Delaware litigator, provides this case synopsis. Plaintiffs asked for expedited treatment in a preliminary injunction action brought to enjoin the exercise of options issued under an option exchange plan...
Court of Chancery Passes on Opportunity to Expound Upon Revlon Application to Mixed Cash/Stock Deals; Reaffirms Significant Deference Given to Independent Board in Change of Control Context Post-Lyondell
Posted on October 25, 2009In two actions involving challenges to a consummated acquisition, the Court of Chancery in In re Nymex Shareholder Litigation, Nos. 3621-VCN, 3835-VCN and Greene v. New York Mercantile Exchange, Inc., et al., No. 3835-VCN (Del. Ch. Sept. 30, 2009), read opinion here, dismissed a multitude of conclusory allegations regarding breaches of fiduciary duties of loyalty, due care and candor in the sale of NYMEX to CME...
New Scholarship on the "Uncorporation"
Posted on October 24, 2009Prof. Larry Ribstein, the country's leading authority on LLCs and other alternative entities, has just announced his newest publication called "The Rise of the Uncorporation", posted here. The abstract for Chapter One follows: The analysis of business associations largely has been limited to corporations...
Bank of America/Merrill Lynch Litigation
Posted on October 22, 2009Last week the Delaware Court of Chancery heard arguments in the litigation involving the Bank of America and Merrill Lynch merger. The Courtroom View Network has made available a free video/audio clip here of that hearing, which they provide with the following introductory background description of the matter: Hearing on defendant's motion to dismiss...
Court of Chancery Grants Motion to Stay Dispute Over Governance of Delaware LLC
Posted on October 16, 2009Choice Hotels International, Inc. v. Columbus-Hunt Park Dr. Bnk Investors, L.L.C., No. 4353-VCP (Del. Ch. Oct. 15, 2009), read opinion here. This Chancery Court decision involves a dispute pursuant to Section 18-110 of the Delaware LLC Act regarding who the proper manager of the LLC is (analogous to DGCL Section 225), but before the Court could address those substantive issues, it needed to address a procedural entanglement that arose due to the parties having other litigation pending among them in another jurisdiction...
Court of Chancery Keeps Partnership Dispute Case in Delaware: Rejects Argument it Lacks Personal Jurisdiction
Posted on October 16, 2009Total Holdings USA, Inc. v. Curran Composites, Inc., No. 4494-VCS ( Del. Ch. Oct. 9, 2009), read opinion here. Professor Larry Ribstein has already prepared a scholarly analysis of this case, primarily addressing the choice of law aspects of the opinion...
Court of Chancery Rules on Choice of Law and Insurance Coverage Issues.
Posted on October 15, 2009Viking Pump, Inc. v. Century Indemnity Company, et al., No. 465-VCS (Del. Ch., Oct. 14, 2009), read opinion here The Delaware Court of Chancery's 90-page opinion in this case, involving esoteric issues of whether certain claims are covered by historic insurance policies, may qualify in some circles merely by virtue of its length only as a novella or a doctoral dissertation, but alas, it covers a topic that strays beyond the typical scope of this blog (and the court primarily applied New York law), so it will be relegated to 'bullet point treatment' in order to highlight cursorily a few nuggets that are most likely to be of interest to the typical reader of these pages...
Court of Chancery Awards Attorneys' Fees and Expenses for Spoliation of Electronic Evidence
Posted on October 15, 2009Beard Research, Inc., et al. v. Michael J. Kates, et al., No. 1316-VCP,(Del. Ch. Oct. 1, 2009), read opinion here. Kevin Brady, a highly regarded Delaware litigator, and an e-discovery expert, provided this synopsis. This Court of Chancery decision is a follow-up to the Court's opinion dated May 29, 2009, which was summarized on this blog here...
Court of Chancery Dismisses Section 220 Action Because Plaintiff Failed to Demonstrate "Proper Purpose"
Posted on October 14, 2009In a post-trial opinion in City of Westland Police & Fire Retirement System v. Axcelis Techs., Inc., C.A. No. 4473-VCN (Del. Ch. Sept. 28, 2009), read opinion here, the Court of Chancery denied a stockholder's request pursuant to § 220 to inspect the company's books and records because the stockholder failed to prove a 'proper purpose' for its request...
ABA Seminar On Delaware Corporate Law and LLCs: Recent Developments
Posted on October 12, 2009For those interested in the most recent developments in the Delaware law of LLCs and well as a review of recent Delaware corporate cases, the ABA is sponsoring a seminar that will be presented by teleconference on October 14 at 1:00p.m. EST. The presentation is based on articles appearing in the current issue of the ABA publication called Business Law Today (not to be confused with the ABA's Business Lawyer publication)...
Chancery Court Picks Lead Counsel in Class Action
Posted on October 11, 2009Dutiel v. Tween Brands, Inc., No. 4743-CC (Del. Ch. Oct. 2, 2009), read letter decision here. This letter decision of the Court of Chancery addresses the issue of who should be appointed as lead counsel in this consolidated class action...
The Business Judgment Rule: Fiduciary Duties of Corporate Directors, Sixth Edition
Posted on October 11, 2009Courtesy of its author, Stephen A. Radin, I just received a free copy of the four volume treatise entitled: The Business Judgment Rule: Fiduciary Duties of Corporate Directors, Sixth Edition. No less an authority than former Delaware Chief Justice E...
Interview with Vice Chancellor J. Travis Laster of the Delaware Court of Chancery
Posted on October 09, 2009Vice Chancellor J. Travis Laster, the newest member of the Delaware Court of Chancery, is the first member of the Court to be interviewed for this blog. The Honorable J. Travis Laster was sworn in at an investiture ceremony at the Court today, October 9, 2009...
The 25th Annual Francis G. Pileggi Distinguished Lecture in Law
Posted on October 09, 2009This year's Distinguished Lecturer is Professor Edward Rock of the University of Pennsylvania Law School, a nationally recognized corporate law expert. A summary of his background and a sampling of his scholarship are provided in the announcement here...
Chancery Upholds Master's Ruling on Advancement Fees and Allowed Amendment of Complaint
Posted on October 08, 2009BabyAge.com, Inc. v. Weiss, No. 4576-CC (Del. Ch. Oct. 1, 2009), read opinion here. This Chancery Court decision addressed two issues: (1) a motion for leave to amend a complaint; and (2) a motion to overturn the decision of a Special Master regarding advancement issues...
eBay's Bid Rejected by Court of Chancery
Posted on October 08, 2009eBay Domestic Holdings, Inc. v. Newmark, No. 3705-CC (Del. Ch. Oct. 2, 2009), read letter decision here. See prior decision by the Court of Chancery in this case summarized on this blog here. The procedural context of this letter opinion was a Motion to Dismiss, alleging that the issues presented were not ripe for judicial determination...
Chancery Court Rules on Mutual Mistake Argument in Contract Issue
Posted on October 07, 2009In West Willow-Bay Court, LLC v. Robino-Bay Court Plaza, LLC, No. 2742-VCN (Del. Ch. Oct. 6, 2009), read opinion here, the Delaware Chancery Court discussed the theories of mutual mistake and unilateral mistake as a basis to reform a contract. After applying the facts and analyzing the issues, the Court, in a 16-page opinion, rejected the reformation arguments based on the circumstances in this case that involved a contract for the sale of a pad site and the issue of who had the obligation to obtain consents needed by third-parties for a proposed development...
Vice Chancellor Strine Comments on Risk-taking by Boards and the Financial Crisis
Posted on October 07, 2009Vice Chancellor Leo Strine, Jr. of the Delaware Court of Chancery wrote an op-ed piece on the New York Times' DealBook blog about the role that risk-taking by boards had in the run-up to the financial crisis--as described here by Professor Bainbridge.
Chancery Enforces Restrictive Covenant and Grants Permanent Injunction
Posted on October 06, 2009Concord Steel, Inc. v. Wilmington Steel Processing Co., Inc., No. 3369-VCP (Del. Ch. Sept. 30, 2009), read opinion here. See prior decision of Chancery Court in this case summarized here. In this Chancery Court opinion, Concord sought a permanent injunction and money damages for breach of a restrictive covenant...
Caremark-based Duties of Directors
Posted on October 04, 2009Professor Stephen Bainbridge comments here about Caremark-based duties of directors and the importance of demonstrating one's best efforts at implementing an information and reporting system, as compared to having evidence of a perfect system.
Chancery Court Grants Preliminary Injunction Against Competing Former Key Employees
Posted on September 29, 2009ZRII, LLC v. Wellness Acquisition Group, Inc., (Del. Ch., Sept. 21, 2009), read opinion here. This 43-page Chancery Court decision addresses issues common to business litigation matters. Key employees leave to compete with their former employer, which was based in Utah...
Chancery Court Describes Disclosure Obligations and Revlon Duties of Directors in Transaction
Posted on September 28, 2009The Washington Legal Foundation published an article here last week that is an overview I did of the recent Delaware Chancery Court decision in Wayne County Employees' Retirement System v. Corti, 2009 Del. Ch. LEXIS 126 (Del. Ch. 2009)...
Delaware Supreme Court Addresses Conflict of Interest Issues
Posted on September 28, 2009In The Matter of a Member of the Bar of the Supreme Court of Delaware: I. Jay Katz, No. 442, 2009, (September 24, 2009), read opinion here. This decision of the Delaware Supreme Court addresses conflicts of interest in the context of Rule 1...
Delaware Chancery Court Trial Imminent in: eBay v. Craigslist
Posted on September 24, 2009Business litigation fans, or those interested in the latest developments occurring in Delaware corporate and commercial litigation in general, may be interested in a trial slated to begin soon in Delaware Chancery Court between two online titans, Craigslist and eBay...
Travis Laster Confirmed by Delaware Senate as Next Vice Chancellor
Posted on September 22, 2009J. Travis Laster was confirmed today by the Delaware Senate to become the newest Vice Chancellor on the Court of Chancery for the State of Delaware. October 9 is expected to be the date of his investiture and swearing in ceremony when he takes his seat on the Court...
ABA Seminar On Delaware Corporate Law and LLCs: Recent Developments
Posted on September 21, 2009For those interested in the most recent developments in the Delaware law of LLCs and well as a review of recent Delaware corporate cases, the ABA is sponsoring a seminar that will be presented by teleconference on October 14 at 1:00pm. EST. The presentation is based on articles appearing in the current issue of the ABA publication called Business Law Today (not to be confused with the ABA's Business Lawyer publication)...
New Delaware Corporate Law Articles
Posted on September 21, 2009New articles of interest to those who practice Delaware corporate and commercial litigation, as well as business litigators generally, are in the current issue of The Business Lawyer, a publicaion of the ABA's Business Law Section. Though I just received it in the mail, the citation for the issue is August 2009, Volume 64, Number 4...
Chancery Rules on Designations of Documents as Privileged; Highly Confidential and Subject to Clawback
Posted on September 18, 2009eBay Domestic Holdings, Inc. v. Newmark, Inc., No.3705-CC (Del. Ch., Sept. 16, 2009), read letter decision here. The Chancery Court addressed three issues of practical importance in most corporate and commercial litigation matters in Delaware and elsewhere...
Live Video/Audio Clip of Delaware Chancery Court Proceedings
Posted on September 18, 2009For any readers interested in watching and listening to a video/audio clip of Delaware Chancery Court proceedings from the convenience of your computer, you are in luck. Last Friday in the case of PPF Safeguard v. BCR Safeguard Holding, Del. Ch., No...
Court of Chancery Grants Summary Judgment on Removal of Manager of LLC
Posted on September 18, 2009In R&R Capital, LLC v. Merritt, No. 3989-CC (Del. Ch. Sept. 3, 2009), read letter decision here, the Court: (i) granted plaintiffs' motion for summary judgment on their claim that defendant Merritt was properly removed as the manager of the several limited liability companies ('LLC'); and (ii) entered an order appointing a receiver to wind up the business and affairs of those LLCs...
Chancery Court Dismisses with Prejudice Plaintiff's Claim Purportedly Withdrawn After Defendant Moved for Summary Judgment; Determines Procedure for Payment of Attorneys' Fees In Advancement Case
Posted on September 18, 2009Martinez v. Regions Financial Corp., No. 4128-VCP (Del. Ch. Sept. 9, 2009), read letter decision here. Also, an implementing Order accompanying the decision that provides for a procedure to address reasonableness of advanced fees, is available here...
Key Delaware Corporate Decisions: Jan. to June 2009
Posted on September 16, 2009Wilmington litigator Kevin Brady and I co-authored an article for the current issue of the ABA magazine called Business Law Today in which we highlighted the key Delaware corporate decisions from the first half of 2009. Here is the article.
The 25th Annual F.G. Pileggi Distinguished Lecture in Law
Posted on September 15, 2009This year's Distinguished Lecturer is Professor Edward Rock of the University of Pennsylvania Law School, a nationally recognized corporate law expert. A summary of his background and an abstract of his presentation are provided in the announcement here...
Delaware Supreme Court Interprets Delaware's Escheat Statute Regarding Escheated Shares in Company
Posted on September 15, 2009A. W. Financial Services, S.A. v. Empire Resources, Inc., No. 55, 2009, (Del. Supr., Sept. 15, 2009), read opinion here. This Delaware Supreme Court decision addressed rather esoteric issues involving the Delaware Escheat Statute, so I will merely highlight in a short blurb two aspects that may have some passing interest to those who follow Delaware business litigation...
The 25th Annual Francis G. Pileggi Distinguished Lecture in Law
Posted on September 15, 2009This year's Distinguished Lecturer is Professor Edward Rock of the University of Pennsylvania Law School, a nationally recognized corporate law expert. A summary of his background and a sampling of his scholarship are provided in the announcement here...
Chancery Court Addresses: Aiding and Abetting Fiduciary Duty of LLC Manager; Right of LLC Member to Resign; and Arbitrability
Posted on September 11, 2009Julian v. Julian, No. 4137-VCP (Del. Ch. Sept. 9, 2009), read opinion here. Two of the prior opinions in this case by the Chancery Court were highlighted on this blog here and here. The Court referred to other proceedings among these parties, including the following separate cases pending in the Delaware Chancery Court in what the Court described as this 'unending tale of internecine strife': Julian v...
Adverse Inference Ordered as Penalty for Deleting Blackberry Data
Posted on September 10, 2009Southeastern Mechanical Services, Inc. v. Brody, 2009 WL 2883057 (M.D. Fla. Aug. 31, 2009). In this federal court ruling from Florida, the court imposed the penalty of an adverse inference due to the spoliation of data on a Blackberry by employees of a company that was subject to a TRO that included a duty to preserve relevant data...
Motion to Disqualify Denied Despite Violation of Rule 1.7 and Concurrent Conflict of Interest with Existing Client
Posted on September 07, 2009Boston Scientific Corporation v. Johnson & Johnson, Inc., D.Del., Nos. 07-333; 07-348; 07-409-SLR (Aug. 25, 2009), read opinion here. This is a memorandum opinion of the U.S. District Court for the District of Delaware, following an evidentiary hearing, in which the Court denies a Motion to Disqualify the law firm of Howrey LLP from representing plaintiffs Boston Scientific Corporation and Boston Scientific Scimed, Inc...
Delaware is Dominant Choice of Law for Merger Agreements
Posted on September 06, 2009Professor Steven Davidoff highlights here, a paper he co-authored with Matthew Cain of the Notre Dame Mendoza College of Business, in a post on the Harvard Law School Forum on Corporate Governance and Financial Regulation. Their publication anyalyzes the selection of governing law and forum clauses in merger agreements between public firms from 2004-2008...
The Death of Big Law
Posted on September 04, 2009Professor Larry Ribstein, a leading business law scholar who frequently writes about the law and economics of law firms, has just written a paper entitled "The Death of Big Law". Introductory comments by the good professor and a link to the article are available here.
Chancery Court Refuses to Remove Trustee of Trust Despite Less Than Ideal Treatment of Old Lady
Posted on September 04, 2009Merrill Lynch Trust Company, FSB v. Campbell, No. 1803-VCN (Del. Ch. Sept. 2, 2009), read opinion here. Read summary of prior Chancery Court decision in this case here. (Chancery Court Courthouse--sketch on Court's website) Background The Court's own introduction to this 35-page opinion is best quoted: 'The financial advisor (or sales representative) of a major brokerage firm improvidently advised an elderly woman to place most of her life savings in a charitable remainder unit trust with a 10% annual payout, lifetime gifts to her children and successor-beneficiaries, and the remainder to go to five charities, an event expected to occur almost half a century later - - objectors that all now seem to agree and understand were unrealistic and likely unattainable...
Delaware Chancery Court Grants Motion to Dismiss Demand for Records under Section 220 but Allows for Amendment of Complaint
Posted on September 02, 2009Smith v. Horizon Lines, Inc., No. 4573-CC (Del. Ch., August 31, 2009), read letter decision here. ( A separate complaint involving Horizon in a class action suit pending in federal court in Delaware can be read here.) Holding This letter decision found a lack of strict compliance by the plaintiff with the section of the Delaware General Corporation Law ('DGCL') that allows a shareholder to demand books and records from a corporation...
Court of Chancery Denies Timeliness Challenge to Request for Indemnification and Advancement; Supreme Court Denies Petition for Interlocutory Appeal
Posted on September 02, 2009In O'Brien v. IAC/Interactive Corp., No. 3892-VCP (Del. Ch. Aug. 14, 2009), read decision here, the Court of Chancery addressed cross-motions for summary judgment in what could be considered a routine action for advancement and indemnification of a former officer against his former employer/corporation, except that the factual setting is far from routine...
The Business Judgment Rule and Non-Profit Audit Committees
Posted on September 01, 2009Professor Stephen Bainbridge, a leading corporate law scholar, discusses in a post here aspects of the business judgment rule as a standard of review (not a standard of conduct), with references to Delaware court decisions as well as to his own copious writings on the topic.
Chancery Court Approves Class Action Settlement Involving Countrywide, and Attorneys' Fees for Plaintiffs' Attorneys Based on Therapeutic Disclosures
Posted on August 29, 2009In re Countrywide Corp. S'holders Litig., 2009 WL 2595739 (Del. Ch., Aug. 24, 2009), read letter decision here. The Chancery Court's separate letter decision of August 28, 2009 approving legal fees relating to the settlement in this case can be read here...
Chancery Court Orders: Clawback of Data; and Counting of Omitted Votes
Posted on August 29, 2009ACS State Healthcare, LLC v. Wipro, Inc. and Wipro, Ltd., No. 4385-VCP (Del Ch., July 23, 2009), read Order here; and In Re: Waddell & Reed Financial, Inc., No. 4602-CC (Del. Ch., June 12, 2009), read Order here. The two above Orders of the Delaware Court of Chancery, in unrelated cases, are noteworthy enough to highlight...
Fiduciary Duties and Preferred Stockholders
Posted on August 28, 2009Professor Stephen Bainbridge, a nationally recognized corporate law scholar, provided today here a learned analysis of the duties owed to preferred stockholders, compared with common stockholders, and contrasted with bondholders. His discussion was prompted by a review here, of the Delaware Chancery Court decision In Re: Trados Incorporated Shareholder Litigation, No...
Chancery Court Addressed Creation of Attorney/Client Relationship and Determination of When Privilege Applies to Communications
Posted on August 28, 2009PharmAthene, Inc. v. SIGA Technologies, Inc., No. 2627-VCP, (Del. Ch., July 10, 2009), read letter decision here. Read summary of prior opinion of the Chancery Court in this case here. Issues Addressed This ruling addressed two issues: (i) under what circumstances is an attorney/client relationship created; and (ii) whether the attorney/client privilege applies to in-house counsel whose communications might include business advice in addition to legal advice...
Chancery Court Discusses Procedural Requirements for Parent Corporation to Pursue Claims Against Directors of Wholly-Owned Subsidiary
Posted on August 26, 2009Case Financial, Inc. v. Alden, No. 1184-VCP (Del. Ch., Aug. 21, 2009), read opinion here. Two prior decisions by the Delaware Chancery Court in this case were previously reviewed on this blog and are available here. Background This Chancery Court opinion contains the findings of fact and conclusions of law based on a trial held in March 2009...
In Unusual Jurisdictional Fight, Court of Chancery Transfers Breach of Duty Case to Superior Court
Posted on August 26, 2009The plaintiffs in Sokol Holdings, Inc. v. Dorsey & Whitney, LLP, No. 3874-VCS (Del. Ch. Aug. 5, 2009), read opinion here, brought suit in the Delaware Court of Chancery against the law firm of Dorsey & Whitney LLP ('Dorsey') alleging professional negligence and breach of fiduciary duties based on claims of overbilling, improper billing of contract attorneys, and unnecessary costs due to ineffective work...
Court of Chancery Provides Guidance on Common Discovery "Hot-Spots"--Privilege Logs and the Scope of Redactions
Posted on August 25, 2009In Cephalon, Inc. v. Johns Hopkins University, No. 3505-VCP (Del. Ch. Aug. 18, 2009) read opinion here, while ruling on two motions to compel, Vice Chancellor Parsons addressed a couple of the most expensive and time consuming segments of discovery: (i) privilege review and the content and detail required in privilege logs for information withheld due to attorney-client privilege or work product immunity; and (ii) the scope of redactions and disclosure of underlying factual information...
Delaware Supreme Court Rules on Admissibility of Expert Evidence
Posted on August 25, 2009General Motors Corporation v. Grenier, No. 453, 2007 (Del. Supr., August 24, 2009), read opinion here. A prior decision of the Supreme Court in this case was highlighted here. In this opinion, the Delaware Supreme Court addresses issues related to whether or not the trial court properly allowed expert testimony after a Daubert hearing that lasted 4 days...
Death of the Billable Hour for Law Firms?
Posted on August 24, 2009Professor Larry Ribstein, a leading scholar on the "law and economics of law firms", discusses here the front page article in today's Wall Street Journal that predicts a decline in the prevailing practice of lawyers billing by the hour, and the good professor also provides his own analysis of the issues involved in this challenge (spearheaded by larger public companies) to the economic model of most large law firms.
Court Takes Unusual Step and Requires "Senior Delaware Lawyers" Involved in Case to Work Out Discovery Plan and Summary Judgment Motion Practice
Posted on August 20, 2009TowerHill Wealth Management v. The Bander Family Partnership, L.P., No. 3830-VCS (August 3, 2009), read letter decision here. Kevin Brady, a highly respected Delaware litigator, provided the synopsis for this unusual case. Plaintiffs moved for summary judgment in this decision where the Court of Chancery was 'troubled that the defendant seems to be more motivated by a desire to enmesh the plaintiffs in an unfocused discovery process that will be dragged out for far too long than is justifiable and far too extensive than is warranted given the issues and dollars at issue ...
Court Approves Settlement, Certifies Class, But Reduces Attorneys' Fee Award
Posted on August 20, 2009In re National City Corp. Shareholders Litigation, No. 4123-CC (Del. Ch. July 31, 2009), read opinion here. Kevin Brady, a highly respected Delaware litigator, provided this synopsis. In this case, the Court of Chancery approved a settlement agreement, certified a class, and awarded attorneys fees and expenses in the amount of $400K instead of the $1...
U.S. Supreme Court To Address Executive Compensation Issue
Posted on August 19, 2009The U.S. Supreme Court has accepted an appeal from a decision of the U.S. Court of Appeals for the 7th Circuit on an executive compensation issue. More specifically, the opinion appealed from addressed the fiduciary duties of advisors to mutual funds based on federal statutes, as well as compensation payable to those advisors...
Delaware Court of Chancery Vacancy Filled
Posted on August 19, 2009Governor Jack Markell has nominated Delaware lawyer Travis Laster to fill the vacancy on the Delaware Chancery Court. Here is the story in the local paper. Here is a prior post on the selection process. The Delaware Senate is expected to convene a special session in September to confirm the nomination...
Court of Chancery Awards Advancement Fees for Executive to Pursue Compensation Claims, and Rejects Reasonableness Argument as Limit on Advancement Obligation
Posted on August 19, 2009In Martinez v. Regions Fin. Corp. C.A. No. 4128-VCP (Del. Ch. Aug. 6, 2009), read opinion here, the Court addressed a former bank executive's claims to enforce a change of control agreement she had with her employer bank before that bank merged into a successor bank and for advancement of fees and costs with respect to this litigation...
Final Appellate Decision from the House of Lords in England
Posted on August 16, 2009For historical purposes, I provide here the final appellate decision of the House of Lords in England. The Law Lords of that august group served as the equivalent of our U.S. Supreme Court for many years, but just issued their last decision as part of the recent reorganization of the English system...
Court Determines That Award of $100K in Attorneys' Fees is Commensurate with Benefit and Effort Under Common Corporate Benefit Doctrine
Posted on August 14, 2009In Kuo v. Genius Products, Inc., No. 3329-CC (Del. Ch., July 30, 2009), read opinion here, the Court of Chancery awarded counsel for Plaintiff Betty Kuo ('Kuo'), a minority shareholder in Defendant Genius Products ('Genius'), Inc., $100,000 in fees and expenses following a stipulation and dismissal recognizing the claims Kuo filed as moot...
Delaware Chancery Court Decision May Be Reviewed by U.S. Supreme Court
Posted on August 12, 2009The Delaware Chancery Court case of Parfi Holding AB v. Mirror Image Internet, Inc., 2008 WL 4110698 (Del. Ch., Sept. 4, 2008), the opinion for which was summarized on this blog here, was affirmed without a published opinion by the Delaware Supreme Court, and now may be on its way for consideration by the U...
Chancery Court Reviews Determinations of Trustee Overseeing Winding up of Dissolved Entity
Posted on August 12, 2009In re: 14 Realty Corp., No. 20129-VCS (Del. Ch., August 5, 2009), read opinion here. This 30-page letter decision reviews de novo the determinations of a Trustee who was appointed to oversee the winding-up of a corporation. Overview This litigation began as a dissolution proceeding pursuant to DGCL Section 273 due to the sibling owners being deadlocked...
Delaware Supreme Court Rules on D & O Coverage Issue: Affirming Decision in Favor of Carrier Who Did Not Consent to Settlement
Posted on August 12, 2009Hilco Capital, LP v. Federal Insurance Co., No. 620, 2008 (Del., August 10, 2009), read opinion here. This Delaware Supreme Court decision addressed whether a D & O carrier's refusal to consent to a settlement was a breach of the implied duty of good faith and fair dealing...
Post Merger Class Action Claims Survive Motion to Dismiss Where Common Stockholders Received Nothing and Preferred Stockholders Received $52 Million
Posted on August 12, 2009In the case of In Re: Trados Incorporated Shareholder Litigation, No. 1512-CC (July 24, 2009), read opinion here, the Court of Chancery denied defendants' motion to dismiss breach of fiduciary duty claims arising out of the approval by the Board of Directors of Trados Incorporated ('Trados') of a transaction whereby Trados became a wholly-owned subsidiary of SDL, plc ('SDL') and granted defendants' motion as to claims of breach of fiduciary duty and aiding and abetting based on alleged revenue manipulation...
Changing of the Guard at Delaware Chancery Court
Posted on August 11, 2009Professor J. Robert Brown has an insightful article here on his blog called The Race to The Bottom about the soon-to-be-announced successor to Vice Chancellor Lamb which refers to my prior post here on the topic...
New Amendments to Delaware's Alternative Entity Statutes
Posted on August 10, 2009A summary of recent amendments to the Delaware LLC Act and other alternative entity statutes was prepared by Louis Hering of the Morris Nichols firm in Delaware and appeared here on The Harvard Law School Corporate Goverance and Financial Regulation Forum.
Pending Federal Legislation's Impact on Delaware
Posted on August 09, 2009Professor J.W. Verret, a former law clerk for the Delaware Chancery Court, has been testifying before the U.S. Congress over the past two months regarding pending federal legislation and its impact on Delaware corporate governance law, including, for example, executive compensation issues and fiduciary duties of the government as a majority shareholder...
Pending Federal Legislation's Impact on Delaware Corporate Litigation
Posted on August 09, 2009Professor J.W. Verret, a former law clerk for the Delaware Chancery Court, has been testifying before the U.S. Congress over the past two months regarding pending federal legislation and its impact on Delaware corporate governance law, including, for example, executive compensation issues and fiduciary duties of the government as a majority shareholder...
Chancery Court Denies Motion to Expedite Section 220 Case due to Failure of Applicant to Avail Himself of Inspection Offer Previously Made
Posted on August 09, 2009Brandt v. CNS Response, Inc., No. 4773-CC (Del. Ch., Aug. 3, 2009), read letter decision here. This 2-page letter decision denied a Motion to Expedite Proceedings and an Application for Emergency Injunctive Relief in connection with a Section 220 action seeking books and records prior to an annual meeting...
Court Addresses Conflict Issue in Fee Agreement of Class Counsel
Posted on August 06, 2009Sheldon Rennie, a corporate litigation partner who was instrumental in helping me start the Wilmington office of Fox Rothschild, co-authored my regular ethics column for the current issue of The Bencher, the national publication of the American Inns of Court...
Vacancy on Delaware Chancery Court
Posted on August 05, 2009I have written previously here about the vacancy on the Delaware Chancery Court due to Vice Chancellor Lamb entering private practice as a result of the expiration of his term last month and his intent not to seek a second term...
Chancery Court Allows Discovery Against Deloitte LLP on Damages It Sought Against its Own Partners
Posted on August 05, 2009Deloitte LLP v. Flanagan, No. 4125-VCN (Del. Ch., Aug. 4, 2009), read letter decision here. In this very short letter opinion, the court decided a discovery issue in which Mr. Flanagan sought data and details regarding prior efforts by Deloitte to enforce a penalty provision against other Deloitte partners based on conduct similar to that alleged in this particular lawsuit in which Deloitte was seeking to enforce a liquidated damages provision against its former partner...
Chancery Court Grants Access to General Ledger and Right to Obtain Photocopies Based on Terms of LLC Agreement but Denies a Request for Attorneys' Fees
Posted on August 02, 2009Mickman v. American International Processing, L.L.C., Del. Ch., No. 3869-VCP (July 28, 2009), read opinion here. This opinion decides issues related to a demand for books and records pursuant to the terms of an LLC Operating Agreement...
Chancery Court Rules that Individual as Sole Owner, Member and Manager of an LLC Did Not Bind that LLC by Signing an Agreement Not Referencing LLC
Posted on August 02, 2009Credit Suisse Securities (USA) LLC v. West Coast Opportunity Fund, LLC, No. 4380-VCN (Del. Ch., July 30, 2009), read opinion here. Overview The issue addressed by the Chancery Court in this case was whether an entity known as Investment Hunter, LLC was bound by an agreement that was signed by a person named Gary Evans 'as CEO...
Fiduciary Duties of Directors of Failing Companies
Posted on August 01, 2009I am blogging from the Annual ABA meeting in Chicago. This post includes a few highlights from a panel presentation entitled 'The Expanding Role of Fiduciary Duties in Challenging Times', and addresses a topic of great interest to readers of this blog: The duties of directors and officers in the context of a failing business, or one in the 'zone of insolvency'...
Chancery Court Grants Books and Records Request Per DGCL Section 220
Posted on August 01, 2009Bosse v. WorldWebDex Corp., Del. Ch., No. 4443-CC (July 30, 2009), read letter decision here. In this short letter opinion, the court addressed a demand for books and records under DGCL Section 220. The court granted, sua sponte, judgment on the pleadings to a pro se plaintiff, in part due to the long history of the defendant's failure to produce documents despite a clear right of the shareholder to those documents from the company (who was represented by counsel)...
ABA Task Force on Corporate Governance
Posted on August 01, 2009At the recent Annual ABA Meeting in Chicago, at one of the presentations of the Corporate Governance Committee of the Business Law Section, a task force issued its 51-page report, with 137 footnotes, regarding whether the rights and roles in large U...
Vice Chancellor Lamb Denies Motion to Dismiss Class Action and Derivative Claims Arising Out of Failed Going-Private Transaction
Posted on August 01, 2009Louisiana Municipal Police Employees' Ret. Syst. v. Fertitta, No. 4339-VCL (Del. Ch. Jul. 28, 2009), read opinion here. Kevin Brady, a prominent Delaware litigator, prepared this synopsis. In his final written opinion before leaving the bench on July 28, 2009, Vice Chancellor Lamb denied a motion to dismiss class action and derivative claims, noting that plaintiff Louisiana Municipal Police Employees' Retirement system had adequately alleged claims for breach of the duty of loyalty and grounds to excuse demand as to the claim of waste with respect to an 'abortive going-private transaction'...
Court of Chancery Denies Reargument Motion on Attorneys' Fees Ruling
Posted on July 31, 2009Medek v. Medek, No. 2559-VCP (Del. Ch., July 27, 2009), read opinion here. A prior decision in this case by the Court of Chancery was reviewed on this blog here. This letter decision denied a Motion for Reconsideration of a Fee Award that was previously granted in a prior decision which can be found at 2009 WL 2005365 (Del...
Chancery Court Grants Books and Records Request Per DGCL Section 220
Posted on July 30, 2009Bosse v. WorldWebDex Corp., Del. Ch., No. 4443-CC (July 30, 2009), read letter decision here. In this short letter opinion, the court addressed a demand for books and records under DGCL Section 220. The court granted, sua sponte, judgment on the pleadings to a pro se plaintiff, in part due to the long history of the defendant's failure to produce documents despite a clear right of the shareholder to those documents from the company (who was represented by counsel)...
Chancery Court Rules that Individual as Sole Owner, Member and Manager of an LLC Did Not Bind that LLC by Signing an Agreement Not Referencing LLC
Posted on July 30, 2009Credit Suisse Securities (USA) LLC v. West Coast Opportunity Fund, LLC, No. 4380-VCN (Del. Ch., July 30, 2009), read opinion here. Overview The issue addressed by the Chancery Court in this case was whether an entity known as Investment Hunter, LLC was bound by an agreement that was signed by a person named Gary Evans 'as CEO...
Court of Chancery Dismisses Fiduciary Duty Claims Regarding Vivendi Deal
Posted on July 29, 2009Wayne County Employees' Retirement System v. Corti, Del. Ch., No. 3534-CC (July 24, 2009), read opinion here. A prior Chancery Court decision in this case was highlighted on this blog here. In this 50-page decision, the Court of Chancery discusses claims of a former shareholder in a purported class action challenging the conduct of the board of directors in negotiating and approving a transaction that resulted in Vivendi, S...
Vice Chancellor Lamb to Open Delaware Office of Paul Weiss Firm After Leaving Chancery Court
Posted on July 29, 2009As reported today in The Wall Street Journal here, Vice Chancellor Stephen Lamb will spearhead a Delaware office for the New York based firm of Paul Weiss after he leaves the Chancery Court when his term expires imminently.
Chancery Court Decides Participation Issues in Class Action Settlement
Posted on July 29, 2009CBOT Group, Inc. v. Chicago Board Options Exchange, Inc., No. 2369-VCN (Del. Ch., July 29, 2009), read letter decision here. Summaries of the several prior decisions by the Chancery Court in this case are available here, here and here. This letter decision is one in a series of resolutions by the Chancery Court, after a class action settlement was approved, of claimants who "appealed" to the court from the denial by class counsel of their requests to participate in the funds available from the class action settlement in this case...
Vice Chancellor Lamb Denies Motion to Dismiss Class Action and Derivative Claims Arising Out of Failed Going-Private Transaction
Posted on July 29, 2009Louisiana Municipal Police Employees' Ret. Syst. v. Fertitta, No. 4339-VCL (Del. Ch. Jul. 28, 2009), read opinion here. Kevin Brady, a prominent Delaware litigator, prepared this synopsis. In his final written opinion before leaving the bench on July 28, 2009, Vice Chancellor Lamb denied a motion to dismiss class action and derivative claims, noting that plaintiff Louisiana Municipal Police Employees' Retirement system had adequately alleged claims for breach of the duty of loyalty and grounds to excuse demand as to the claim of waste with respect to an 'abortive going-private transaction'...
Court of Chancery Rules on Issue of First Impression: Do Fiduciary Duties Apply in the Context of a Right of First Refusal Agreement Between a Corporation and its Shareholders
Posted on July 28, 2009Latesco, L.P. v. Wayport, Inc., Del. Ch., No. 4167-VCL (July 24, 2009), read opinion here. Background This 26-page Chancery Court opinion involves the efforts of a shareholder to monetize a part of his illiquid, minority interest in a private company he co-founded, but in which he was no longer an insider...
Delaware's Sister State
Posted on July 28, 2009One of Delaware's "sister states" is Pennsylvania, an adjoining jurisdiction that is home to many of Delaware's corporate lawyers. (Now that I have a connection to the scope of this blog, I can get to the point.) Here is an article in the Philadelphia Inquirer about the budget battles now being engaged in "next door" between the Governor of the Keystone State and the Senate Majority Leader, Dominic Pileggi...
Supreme Court Affirms Court of Chancery's Decision To Certify Class and Award Attorneys' Fees
Posted on July 27, 2009Loral Space & Communications Inc. v. Highland Crusader & Offshore Partners, L.P., Del. Supr., No. 623, 2008, (July 23, 2009), read opinion here. Kevin Brady, a prominent Delaware litigator, prepared the following synopsis...
Watch Court of Chancery Trial Live Online via Audio/Video Feed
Posted on July 27, 2009For those would enjoy watching a trial in the Delaware Court of Chancery--live, from the comfort of their computer, via an online video/audio feed, made available (for a price) by the folks at www.courtroomview.com, see the link here. The name of the case being tried this week before Vice Chancellor Leo Strine, Jr...
Professor Bainbridge on Shareholder Activism
Posted on July 25, 2009Professor Stephen Bainbridge, a nationally-prominent scholar and expert on Delaware corporate law, has written an article on shareholder activism, available here.
Court of Chancery Enforces Nigerian Judgment in U.S. Dollars
Posted on July 24, 2009Akande v. Transamerica Airlines, Inc., Del. Ch., No. 1039-VCP (July 22, 2009), read opinion here. Two prior decisions in this case by the Court of Chancery were reviewed on this blog here and here. Kevin Brady, a prominent Delaware litigator, provides the following synopsis: In a unique and somewhat esoteric exercise for devotees of Delaware corporate law, the Court of Chancery entered a judgment in this case of approximately US$2...
Article on Caremark and Risk Management
Posted on July 17, 2009Professor Stephen Bainbridge, a nationally-recognized expert in Delaware corporate law, has penned an article titled: Caremark and Enterprise Risk Management, which is available here for your reading pleasure.
Court of Chancery Grants Advancement Rights and Allows Indemnification Claims
Posted on July 16, 2009Stockman v. Heartland Industrial Partners L.P., No. 4227-VCS (July 14, 2009), read opinion here. Peter Ladig, lead Delaware counsel for one of the plaintiffs in this matter, was kind enough to forward a copy of this opinion to me when it was issued by the Court...
Responses to Unsolicited Offers Under Delaware Corporate Law
Posted on July 16, 2009An article entitled "Responding to Unsolicited Offers", authored by Delaware lawyer Frederick Alexander, was posted on The Harvard Law School Corporate Governance Blog here. It discusses among other things the fiduciary duty issues under Delaware law that are raised in connection with the reply to an unsolicited offer.
Problems Raised by Government As Majority Shareholder
Posted on July 16, 2009Prof. J.W. Verret , an expert on Delaware corporate law, recently testified before Congress about, among other things, the problems raised by the U.S. serving as a controlling shareholder in automotive and financial industry firms, but enjoying immunity from corporate governance claims...
Chancery Court Transfers Declaratory Judgment Complaint to Superior Court Due to Lack of Equity Jurisdiction
Posted on July 16, 2009Tunnell Companies, LP v. Delaware Division of Revenue, No. 2450-VCL (July 13, 2009), read letter decision here. This short two-page letter decision transferred a complaint to the Delaware Superior Court based on a lack of equity (i.e., subject matter) jurisdiction in Chancery Court...
New Rules and New Forms for Delaware Chancery Court
Posted on July 15, 2009The Delaware Chancery Court has announced several new rule amendments and new forms, effective August 1, 2009. They include the following: new cover sheet for new complaints Judicial Action Form to request trial dates, etc. amended rule regarding fees when members of the court are mediators rule regarding "proceedings by remote communication"
Court of Chancery Denies Fund Investors' Application for Certification of an Interlocutory Appeal and Motion for Injunction Pending Appeal After Redemption Rights Were Suspended
Posted on July 15, 2009Archstone Partners, L.P. v. Lichtenstein, No. 4465-CC (Del. Ch. July 10, 2009), read Chancery Court opinion here. Read Supreme Court Order denying interlocutory appeal here. Kevin Brady, a highly regarded Delaware litigator, provides the following synopsis...
Delaware Supreme Court Clarifies Requirements of Valid Mechanics' Liens
Posted on July 15, 2009King Construction, Inc. v. Plaza Four Realty, LLC, Del. Supr., (July 15, 2009), read opinion here. This 30-page Delaware Supreme Court decision explains in great detail the requirements for filing a valid mechanics' lien claim in Delaware. This short post is only intended to highlight key points...
Delaware Supreme Court Addresses Appropriate Remedy in Short Form Merger Where Majority Violates Disclosure Duty
Posted on July 14, 2009Berger v. Pubco Corp. et al., Del. Supr., No. 509, 2008 (July 9, 2009), read opinion here. Kevin Brady, a highly regarded Delaware litigator, provides the following synopsis of the case: In a case of first impression, Justice Jacobs writing for the Delaware Supreme Court en banc resolved the differences between two Court of Chancery decisions addressing the appropriate remedy in a short form merger under 8 Del...
U.S. Supreme Court Justice Clarence Thomas
Posted on July 13, 2009U.S. Supreme Court Justice Clarence Thomas is one of the jurists I admire the most, on both a professional and personal level (and not only because I have a personal handwritten note from him in reply to a letter I sent thanking him for the exemplary biography he wrote...
Proposed Legislation on LLCs Concerns LLC Expert
Posted on July 12, 2009Professor Larry Ribstein, a nationally-recognized expert on LLCs, writes about proposed federal legislation that concerns him due to its potential to scare people aways from using LLCs. Here is the post that is important reading for those who need to know the latest developments in LLCs...
Does Delaware Enjoy the Same Attractions as a Domicile for LLCs as for Corporations
Posted on July 11, 2009Professors Larry Ribstein and Bruce Kobayashi have co-authored an article titled: Jurisdictional Competition for LLCs. Here is Professor's Ribstein's blog post about it. Volumes have been written about the competition among states to attract those who form corporations, especially large, publicly held corporations, but this paper fills a void in the scholarly analysis of the issue regarding whether there is a competition for the domicile of LLCs...
Delaware Supreme Court Clarifies "Quasi-Appraisal Remedy"
Posted on July 10, 2009In Berger v. Pubco Corp., Del. Supr., (July 9, 2009), read opinon here, the Delaware Supreme Court clarified Delaware law regarding the remedy for minority shareholders in a "short form" merger under DGCL section 253 when the minority shareholders are not given material information...
Cultural Imperialism and "Belief Bullies" in Law Schools
Posted on July 10, 2009Here is a thought-provoking post from the popular blog called Above The Law, about a lawyer from Singapore who is scheduled to be a visiting professor at NYU Law School and who has been criticized for her views on gay rights. She accuses those who oppose her views as trying to impose their cultural imperialism on her and, in effect, trying to bully her with their beliefs...
Will Delaware Ever Require that a Poison Pill be Redeemed?
Posted on July 08, 2009The Deal Professor blog, by Steven Davidoff, has a post here that discusses the issue of whether the Delaware Court of Chancery will ever require that a poison pill be redeemed. He also describes as "must reading" for corporate lawyers the transcript of a hearing yesterday, that he makes available here, that addresses the issue...
Law School Admissions, Jobs for Lawyers and Political Influence
Posted on July 06, 2009Prof. Larry Ribstein has a thoughtful and thought-provoking post here about the recent Chicago Tribune investigation into the practices by the law school administration at the University of Illinois. This is a story that is of general interest to all lawyers for a few reasons...
Imminent Vacancy on Delaware Chancery Court
Posted on July 06, 2009We have previously written about the imminent vacancy on the Delaware Chancery Court that will occur when one of the members of the Court finishes his term in a few weeks. He has decided not to seek re-appointment. The process to fill the vacancy includes an application to and vetting by the Judicial Nominating Commission, who provides a list of three to the Governor...
Court of Chancery Grants Summary Judgment on Claims for Unjust Enrichment and Conversion in Embezzlement Case
Posted on July 03, 2009B.A.S.S. Group, LLC v. Coastal Supply Co., Inc., No. 3743-VCP (Del. Ch. June 19, 2009), read opinion here. Kevin Brady, a highly respected Delaware litigator, provides the following synopsis for this opinion. Vice Chancellor Parsons addressed cross motions for summary judgment in an action where after embezzling funds from his employer, defendant Coastal Supply Co...
Court of Chancery Rejects Forum Non Conveniens Motion and Allows Delaware Class Action to Proceed
Posted on July 03, 2009Rosen v. Wind River Systems, Inc., C.A. No. 4674-VCP (Del. Ch., June 26, 2009), read opinion here. Kevin Brady, a highly respected Delaware litigator, provides the following synopsis of this case. In this decision, the Court of Chancery, in a putative class action regarding an all-cash, all-shares tender offer for the shares of Wind River Systems, Inc...
SEC Commissioner Speaks on Corporate Governance
Posted on July 03, 2009SEC Commissioner Elisse Walter's recent speech on corporate governance before the Society of Corporate Secretaries and Governance Professionals has been published on The Harvard Law School Corporate Governance Blog here.
Court of Chancery Addresses Buyers' Remorse in Closing an Acquisition - With a Unique Twist
Posted on July 03, 2009AQSR India Private, Ltd., et al. v. Bureau Veritas Holdings, Inc., No. 4021-VCS (June 16, 2009), read opinion here. Kevin Brady, a highly respected Delaware litigator, provides us with the following synopsis. In this Chancery Court decision, Vice Chancellor Strine addressed a motion to dismiss a 15-count complaint and motion for judgment on the pleadings arising from an all-too-common fact pattern where a buyer refused to complete a transaction...
Chancery Court Dismisses Claims by Amazon.com in Connection with Issuance of Shares by Basis Technology Corporation
Posted on July 01, 2009Amazon.com, Inc. v. Hoffman, No. 2239-VCN (June 30, 2009), read opinion here. In this letter decision, the Chancery Court grants a Motion to Dismiss claims that Amazon.com, Inc. brought against Basis Technology Corporation in connection with the preferred shares that Amazon...
U.S. Supreme Court Rules in Favor of White Firefighters in Race Discrimination Decision
Posted on June 29, 2009The United States Supreme Court ruled today that white firefighters who were denied a promotion even though they scored higher on tests than minority counterparts, suffered violations of their civil rights. Though outside the normal scope of this blog, the issues addressed by the U...
Madoff and The Divine Comedy
Posted on June 29, 2009Prof. Jayne Barnard on The Conglomerate blog writes here about Dante's masterpiece of literature called The Divine Comedy, and in particular her reference to Dante's Inferno and its 9th circle of Hell (the lowest) reserved for those who betray their friends...
Chancery Court Grants Expedited Proceedings for a Preliminary Injunction Application in Challenge to Merger Agreements Involving EMC, Data Domain and NetApp, Inc.
Posted on June 29, 2009Police & Fire Ret. Sys. of The City of Detroit v. Bernal, No. 4663-CC (June 25, 2009), read letter decision here. This Chancery Court decision provides a useful guide for the standard that will be applied to a motion to expedite proceedings...
Chancery Court Resolves Objections of Class Members Excluded from Class Action Settlement Involving Chicago Board Options Exchange
Posted on June 29, 2009CME Group, Inc. v. Chicago Board Options Exchange, Inc., No. 2369-VCN (June 25, 2009), read opinion here. See several prior Chancery Court decisions in this case summarized here, including the court's approval of the Stipulation of Settlement in this class action...
Chancery Court Awards Partial Fee Amount Requested due to Litigation that was only Partially Responsible for Changes in Contested Deal
Posted on June 26, 2009In re: BEA Systems, Inc. Shareholders Litigation, No. 3298-VCL (June 24, 2009), read letter decision here. A prior Chancery Court decision in this case was summarized here. This short 2-page letter decision addressed a request for attorneys' fees in a case that arose out of the acquisition of BEA Systems by Oracle Corporation...
Lawyers, Law Firms and Blogging
Posted on June 25, 2009Mark Herrmann, a partner at the Chicago office of the Jones Day firm, and co-author of the popular blog called Drug and Device Law, writes here about his admittedly unscientific analysis of the most recent annual survey by Kevin O'Keefe of blogs and blogging among the AmLaw 200 firms...
Chancery Court Dismisses Cases Against Directors of Delaware Corporations and Several Foreign Corporations
Posted on June 25, 2009Lisa, S.A. v. Juan Jose Gutierrez Mayorga, No. 2571-VCL (Del. Ch., June 22, 2009), read opinion here. Overview This Chancery Court decision involves a 1992 sale of shares in a group of family-owned corporations organized under the laws of Guatemala and El Salvador...
Chancery Court Dismisses Case Against Directors of Delaware Corporations and Several Foreign Corporations
Posted on June 25, 2009Lisa, S.A. v. Juan Jose Gutierrez Mayorga, No. 2571-VCL (Del. Ch., June 22, 2009), read opinion here. Overview This Chancery Court decision involves a 1992 sale of shares in a group of family-owned corporations organized under the laws of Guatemala and El Salvador...
Chancery Court Awards all Fees Requested as Reasonable based on Terms of an Agreement but Rules that "Expenses" are not covered by "Costs" Term in Agreement
Posted on June 24, 2009Ivize of Milwaukee v. Compex Litigation Support, No. 3158-VCL (June 24, 2009), read letter decision here. The recent prior decision of the Chancery Court in this case was summarized here. In its prior opinion, the court determined that the Asset Purchase Agreement involved in this case had been breached, and as provided in the agreement, the court awarded the full amount of reasonable attorneys' fees requested, as entitled to the prevailing party, even though the court rejected the damages theory of the prevailing party...
Delaware Chancery Court Amends Rules
Posted on June 23, 2009The Delaware Chancery Court has amended Rule 173 regarding remote hearings, available here, as well as Rule 3 regarding filing fees for expedited proceedings and other court filings, available here.
Delaware Chancery Court Determines Ownership of Patent Based on Dispute Between an Employee Scientist and his Former Employer
Posted on June 22, 2009Sinomad Bioscience Limited v. Immunomedics, Inc., No. 2471-VCS (Del. Ch., June 16, 2009), read opinion here. Overview This 50-page Chancery Court decision addresses in great detail the intellectual property rights involved in patent disputes between a biopharmaceutical company and its former employee...
Chancery Court Rejects Claims by AIG v. Co-Conspirators Based on In Pari Delicto Doctrine
Posted on June 22, 2009In Re American International Group, Inc., Consolidated Derivative Litigation; American International Group, Inc. v. Greenberg, Del. Ch., No. 769-VCS (June 17, 2009), read opinion here. A recent prior decision by the Chancery Court in this case was highlighted here...
Chancery Court Rules on Media Access to Court Records
Posted on June 22, 2009In re Nat'l City Corp. S'holders Litig., No. 4123-CC (Del. Ch. June 5, 2009), read decision here. In this short letter decision, the Chancellor discusses the public policy reasons behind Chancery Court Rule 5(g) which deals with those situations when a document filed with the court may be placed 'under seal...
Chancery Court Denies TRO Request from Bidder who was Denied City Contract
Posted on June 22, 2009Holley Enterprises, Inc. v. The City of Wilmington, No. 4619-VCS (Del. Ch. June 5, 2009), read letter decision here. This short Chancery Court letter decision provides a useful summary of the standard that must be satisfied before a temporary restraining order is granted--an important instrument to have in the toolbox of the those who handle business litigation in Delaware...
Litigating LLCs
Posted on June 21, 2009Professor Larry Ribstein, a leading authority on LLCs, has written an article regarding litigation involving LLCs. Here is a link to his article entitled: Litigating in LLCs.
Chancery Court Modifies Advancement Award Based on Changed Circumstances
Posted on June 21, 2009Duthie v. CorSolutions Medical, Inc., et al., No. 3048-VCN (Del. Ch., June 16, 2009), read opinion here. A prior Chancery Court decision in this advancement case, which also provides more background facts, has been summarized on this blog here...
Chancery Court Approves Settlement of Class Action and Awards Attorneys' Fees
Posted on June 19, 2009Gatz v. Ponsoldt, No. 174-CC (Del. Ch., June 12, 2009), read opinion here Prior decisions in this case by the Delaware Supreme Court and Chancery Court were summarized here and here on this blog. Overview This short letter decision by the Chancery Court approved attorneys' fees and expenses in the amount of 33% of the settlement fund plus expenses in connection with the settlement of a class action on behalf of shareholders of Regency Affiliates, Inc...
Advancement of Legal Fees
Posted on June 18, 2009We have summarized many Delaware decisions on this blog regarding the issue of advancement of fees for the benefit of officers and directors of companies who have been given that right by either contract or bylaws or corporate charter, as authorized by the Delaware General Corporation Law--and as distinguished from indemnification, which generally is not triggered until after the litigation is concluded, and after potentially millions of dollars in fees have been incurred...
Chancery Court Dismisses Seller's Claims Against Buyer's Controlling Shareholder in Failed Merger
Posted on June 17, 2009In James Cable, LLC, v. Millennium Digital Media Systems d/b/a 'Broadstripe', et al., No. 3637-VCL (June 11, 2009), read opinion here, Vice Chancellor Lamb was faced with what has become an 'all-too-familiar' fact pattern given the state of the economy recently...
Four Recent Chancery Court Decisions on Electronic Discovery Issues
Posted on June 15, 2009The Delaware Chancery Court recently issued four decisions in as many weeks on topics related to electronic discovery. These cases have been summarized already on this blog but I want to collect links to them all on one page for convenience. The cases with links to their summaries are as follows: Grace Brothers Ltd...
First Podcast
Posted on June 14, 2009My first podcast, courtesy of the LexisNexis Corporate & Securities Law Center, is available here. I discuss a few recent Delaware Chancery Court opinions, and this blog in general. For those not familiar with a podcast, it is, in essence, an audio clip that is available for your listening pleasure on the internet or it can be downloaded on devices such as an iPod...
Chancery Court Applies Laches to Prevent Claim Brought Within Applicable Statute of Limitations
Posted on June 14, 2009Whittington v. Dragon Group, L.L.C., No. 2291-VCP (Del. Ch., June 11, 2009), read opinion here. Among the several prior decisions of the Chancery Court in this case, the two most recent have been summarized on this blog and are available here...
Rule 502 and eDiscovery in Delaware
Posted on June 14, 2009Vice Chancellor Donald F. Parsons, Jr. and Kevin F. Brady have co-authored an article entitled: Privilege Waiver in Federal and State Courts - New Federal Rule 502. This is a key issue for eDiscovery. The article is available here...
Court Appoints a Neutral Arbitrator based on Interpretation of Arbitration Provision that Original Umpire Selected by the Parties was Disqualified
Posted on June 09, 2009Firemen's Insurance Company of Washington, D.C. v. Birch Pointe Condominium Association, Inc., No. 4313-VCP (Del. Ch., May 29, 2009), read opinion here This short letter decision involves interpretation of an arbitration provision in an insurance policy...
Chancery Court Approves Class Action Settlement Regarding Chicago Board Options Exchange
Posted on June 04, 2009CME Group Inc. v. Chicago Board Options Exchange, Inc., No. 2369-VCN (Del. Ch., June 3, 2009), read opinion here. Prior Chancery Court opinions in this case were summarized on this blog here. This action began in order to establish the economic and trading rights of the Board of Trade of the City of Chicago ('CBOT'), now under the auspices of CME Group, Inc...
Court Grants Motion to Compel Director Emails After Company Fails to Preserve or Collect That Information
Posted on June 03, 2009Grace Brothers, Ltd. v. Siena Holdings, Inc., et al., No. 184-CC (Del. Ch., June 2, 2009), read letter decision here. Kevin Brady, a highly respected Delaware litigator, provides us with the benefit of his following review of this letter decision...
Chancery Court Issues Major Decision on Duty to Preserve Electronically Stored Information and Imposes Adverse Inference as Penalty for Spoliation of Evidence
Posted on June 01, 2009Beard Research, Inc. v. Kates, No. 1316-VCP (Del. Ch., May 29, 2009), read opinion here This is One of Three Chancery Court Decisions Decided in May 2009 that Address Electronic Discovery Issues This Chancery Court decision by Vice Chancellor Parsons is one of three Chancery Court cases decided in May that address important aspects of electronic discovery and describe the penalties for not upholding the duty to preserve electronically stored information (ESI)...
Chancery Court Compensates Lead Plaintiff in Class Action Against Boston University
Posted on May 31, 2009Oliver v. Boston University, No. 165070-VCN (Del. Ch., May 29, 2009), read letter decision here. Prior opinions in this case by the Chancery Court were summarized here on this blog. This latest decision addresses a few open issues after the approval of a class action settlement...
Delaware Corporate Law and Monetary Liability of Directors
Posted on May 31, 2009Scott J. Davis and Michael Torres of the Mayer Brown LLP firm have written a paper titled Directors' Monetary Liability for Actions or Omissions Not in Good Faith, that is available here on the Harvard Law School Corporate Governance Blog.
Delaware Corporate Law and the Pepsi Battle
Posted on May 31, 2009The Deal Professor writes here about the Delaware corporate law issues involved in the pending Delaware Chancery Court case relating to PepsiCo's bid for the Pepsi Bottling Co., and in particular whether the bid will be subject to the entire fairness review standard.
The Death of the Wolf Block Law Firm
Posted on May 31, 2009Prof. Larry Ribstein has a thought-provoking and insightful post here about the recent demise of the former powerhouse law firm of Wolf Block. The good professor's analysis should be required reading for any partner of a law firm. It describes how tenuous the economic model of the modern law firm is, and how thin a line exists between a profitable law firm and one that fails.
Court Grants Cross-Motions to Compel Discovery But Refuses to Shift Costs to Requesting Party to Pay for Restoration of Emails on Backup Tapes
Posted on May 31, 2009Omnicare, Inc. v. Mariner Health Care Management Co., No. 3087-VCN (Del. Ch., May 29, 2009), read opinion here. This case review is brought to us by Kevin Brady, a highly respected Delaware litigator. On May 29, 2009, Vice Chancellor Noble issued a decision granting cross-motions to compel in this matter...
Delaware Supreme Court Upholds New State Law Allowing Sports Betting
Posted on May 29, 2009In Re: Request of the Governor For An Advisory Opinion, No. 150, 2009 ( Del., May 27, 2009), read opinion here. The Delaware Code provides a procedure for the Governor of Delaware to request the Delaware Supreme Court to provide an opinion on the constitutionality of any law passed by the General Assembly...
Court Modifies Prior Determination of Fair Value in Appraisal Action But Does Not "Second-Guess" the Plain Meaning of the Contract
Posted on May 29, 2009In re Appraisal of Metromedia International Group, Inc., No. 3351-CC (Del. Ch., May 29, 2009), read opinion here. Prior opinions by the Chancery Court in this case have been summarized here. Kevin Brady, a highly respected Delaware litigator, provides us the following review of the case...
Delaware Chancery Court Requires Party to Submit to Terms of Forum Selection Clause Despite that Party Being a Non-Signatory; Based on Equitable Estoppel
Posted on May 28, 2009Weygandt v. Weco, LLC, Del. Ch., No. 4056-VCS (May 14, 2009), read opinion here Issue Presented The question in this case is whether a non-signatory defendant can be required to appear in a forum chosen in an agreement executed by an affiliate. In this Chancery Court decision, the court determined that a party was subject to the personal jurisdiction of the Delaware courts based on a forum selection clause in an agreement that the party was not a signatory to, but which an affiliated party was a signatory to, based on equitable estoppel...
Interview with Delaware Supreme Court Justice Jack Jacobs
Posted on May 27, 2009Professor J.W. Verret interviews Delaware Supreme Court Justice Jack Jacobs via The Conglomerate blog here. The interview is must reading for anyone interested in Delaware corporate law. Justice Jacobs, prior to joining the Delaware Supreme Court, sat on the Delaware Chancery Court, and has a combined 24 years of service on the Delaware bench...
Chancery Court Splits Fees in Cablevision Class Action Between Lawyers for Related New York Suit and Delaware Counsel
Posted on May 26, 2009In Re Cablevision/Rainbow Media Group Tracking Stock Litigation, No. 19819-VCN (May 22, 2009), read opinion here. This Chancery Court decision resolved a dispute regarding the amount of fees and the division of fees between class counsel in a Delaware shareholders' suit that challenged the exchange by Cablevision Systems Corporation of its then-outstanding tracking stock and certain assets of its Rainbow Media Division for Cablevision common stock...
Delaware Supreme Court Agrees with Deloitte in Partnership Dispute
Posted on May 25, 2009Paul v. Deloitte & Touche, LLP, Del. Supr., No. 336, 2008 (May 20, 2009), read opinion here. This Delaware Supreme Court decision involves a dispute between Deloitte & Touche LLP and a partner that it had terminated. Delaware's High Court reviewed de novo an appeal from a summary judgment granted by the trial court...
Delaware Corporate Law Decisions Are Poetry to Some
Posted on May 25, 2009Professor J.W. Verret on The Conglomerate blog here, make limericks out of several leading Delaware court decisions on corporate law for one of the corporate law classes he teaches. It may be a helpful way to remember the principles from those decisions.
Corporate Governance Commentary
Posted on May 24, 2009Professor Stephen Bainbridge provides scholarly insights about corporate governance here, with quotes from Henry Manne and links to law review articles by the good professor and others, which address the deep thoughts involved in issues such as: director primacy; shareholder rights; takeover defenses (with citations to Revlon's progeny), and whether the stock market is efficient.
Bainbridge on New SEC Proxy Proposal
Posted on May 23, 2009Professor Bainbridge provides insights here on the new SEC proxy proposal.
Chancery Court Dismisses Class Action Allegations of Overpayment in Recapitalization Transaction on Standing Basis But Disclosure Claims Allowed to Proceed
Posted on May 23, 2009Dubroff, et al. v. Wren Holdings, LLC, et al., Del. Ch., No. 3940-VCN (May 22, 2009), read opinion here. Kevin Brady, a highly-respected Delaware litigator, provides us with the benefit of his following review of this Delaware Chancery Court decision...
Added to Two "Top Lists" in Two Days
Posted on May 22, 2009Rees Morrisson on his Law Department Management blog yesterday featured my blog among a list of 15 others that he recommended to his law department readers, here, based on a list compiled by Doug Cornelius. Today, the Securities Docket site included me here among "15 people that securities and corporate litigators should follow on Twitter"...
Delaware Chancery Court Rejects Challenge to Atmel's Poison Pill
Posted on May 21, 2009Louisiana Municipal Police Employees' Retirement System v. Laub et al., Del. Ch., C.A. No. 4161. The Delaware Chancery Court ruled from the bench on May 19, 2009 in this matter involving a contested Poison Pill of Amtel Corporation in connection with a merger proposal...
Chancery Court Addresses Duty of Loyalty and Other Fiduciary Duties of Departing Salaried Employee Plus Panoply of Related Claims
Posted on May 20, 2009Triton Construction Co., Inc. v. Eastern Shore Electrical Services, Inc., Del. Ch., No. 3290-VCP (May 18, 2009), read opinion here. This 76-page Delaware Chancery Court opinion contains many statements of Delaware law that are of practical importance to both businesses and their lawyers, regarding issues that arise in connection with 'important employees' leaving and competing against their former employer...
Proxy Access and Blank Voting
Posted on May 20, 2009James McRitchie, Publisher of CorpGov.net, has a post here that discusses the SEC's vote of May 20, 2009 on proxy access, and includes commentary regarding "blank votes" which he describes as: "when retail shareowners vote but leave items on their proxy blank, those items are routinely voted by their bank or broker as the subject company's soliciting committee recommends...
Chancery Court Addresses Duty of Loyalty and Other Fiduciary Duties of Departing Salaried Employee; Duty to Preserve Data; and Panoply of Related Claims
Posted on May 20, 2009Triton Construction Co., Inc. v. Eastern Shore Electrical Services, Inc., Del. Ch., No. 3290-VCP (May 18, 2009), read opinion here. This 76-page Delaware Chancery Court opinion contains many statements of Delaware law that are of practical importance to both businesses and their lawyers, regarding issues that arise in connection with 'important employees' leaving and competing against their former employer...
Chancery Grants Stay of LLC Dissolution Pending Appeal
Posted on May 19, 2009Fisk Ventures, LLC v. Segal, Inc., C.A.No. 3017-CC (May 15, 2009), read opinion here. Prior Chancery Court decisions in this case have been summarized on this blog here. Kevin Brady, a well respected Delaware litigator, provides us with the benefit of his following review of this case...
Chancery Dismisses Derivative Complaint Per Rule 23.1
Posted on May 19, 2009Green v. LocatePlus Holdings, Corp. et al., C.A. No. 4032-CC (May 15, 2009), read opinion here. Kevin Brady, a well respected Delaware litigator, provides us with the benefit of his following review of this Chancery Court decision. On May 15, 2009, Chancellor Chandler granted defendants' motion to dismiss the amended complaint without prejudice for failure to comply with Court of Chancery Rule 23...
More Economic Problems at BigLaw?
Posted on May 18, 2009Prof. Larry Ribstein comments here about the recent defection of two rainmakers from the Skadden Arps law firm to Kirkland & Ellis as indicative of another "wheel falling off the big law model." His post is thought-provoking for anyone interested in, or impacted by, law firm economics in the current economic maelstrom.
The Constitution and Corporate Law
Posted on May 15, 2009How can these two legal topics be connected when on the surface they seem so disparate? I learned the answer at a seminar I am attending today in Phoenix on the topic of the Second Amendment to the U.S. Constitution. Perhaps this is an unlikely place to find such an answer but at this gathering of scholars and practitioners who are experts in Constitutional Law, based on both the U...
Chancery Rejects Claims of Departing Member of LLC Who Co-Founded Hedge Fund
Posted on May 13, 2009Olson v. Halvorsen, No. 1884-VCL (Del. Ch., May 13, 2009), read opinion here Two prior Delaware Chancery Court opinions in this case were previously summarized here. This most recent iteration of a bitter dispute between three co-founders of a hedge fund addressed whether a departing member of an LLC was only entitled to the limited amount of compensation covered by an oral agreement among the members, which excluded any deferred compensation...
Delaware and the Federalization of Corporate Law
Posted on May 12, 2009Professor Stephen Bainbridge examines the perennial issue of the federalization of corporate law and the impact on Delaware, in the context of the proposed federal Shareholder Bill of Rights Act of 2009 that Sen. Chuck Schumer is rumored to be introducing soon in the U...
Loyalty and Faithfulness in Corporate Law
Posted on May 12, 2009As part of an online symposium on The Conglomerate blog, Professor Gordon Smith has a post here about the role of loyalty in corporate law, with links to articles by Prof. Andrew Gold and Prof. Lyman Johnson on the topic. In addition, Prof...
Delaware Chancery Court Rules on Amylin "Poison Put" Provision; Finds No Violation on Duty of Care Issue; and Provides Instruction to Lawyers Advising Boards on Complex Documents
Posted on May 12, 2009San Antonio Fire & Police Pension Fund v. Amylin Pharmaceuticals, Inc., No. 4446-VCL (Del.Ch., May 12, 2009), read opinion here. This Chancery Court decision addressed the issue of "poison puts" or a provision in an indenture that would have triggered an obligation of the company, and a right of noteholders, that allowed the holders of the notes to put their notes to the corporation at face value if a majority of the board changed control...
Chancery Court Denies Books and Records Demand for LLC
Posted on May 08, 2009JAKKS Pacific, Inc. v. THQ/JAKKS Pacific, LLC, Del. Ch., No. 4295-VCL (May 6, 2009), read opinion here. Pursuant to Section 18-305 of the Delaware Limited Liability Company Act (6 Del. C. Section 18-305), the plaintiff in this case sought an inspection of the books and records of an LLC...
Motion for Summary Judgment on Dissolution But Request for Appointment of Liquidating Trustee Denied Based on Terms of LLC Agreement
Posted on May 08, 2009In Re Nextmedia Investors, LLC, Del. Ch., No. 4067-VCS (May 6, 2009), read opinion here. This Delaware Chancery Court opinion includes instructive recitations of Delaware law on a topic of relevance to all those who labor in the fields of business litigation...
Chancery Court Enjoins Arbitration as Time-Barred
Posted on May 08, 2009Argyle Solutions, Inc. v. Professional Systems Corporation, Del. Ch., No. 4382-VCN (May 4, 2009), read opinion here. This Chancery Court decision interpreted a soon-to-be-outdated provision of the Delaware Uniform Arbitration Act. In particular, on April 2, 2009 the Governor of Delaware signed into law legislation that will require arbitrators to resolve 'in the first instance' questions related to whether an arbitration proceeding was commenced on a timely basis (as opposed to petitioning the Chancery Court for a determination about the timeliness of an arbitration forum selection)...
Motion for Summary Judgment on Dissolution Granted But Request for Appointment of Liquidating Trustee Denied Based on Terms of LLC Agreement
Posted on May 08, 2009In Re Nextmedia Investors, LLC, Del. Ch., No. 4067-VCS (May 6, 2009), read opinion here. This Delaware Chancery Court opinion includes instructive recitations of Delaware law on a topic of relevance to all those who labor in the field of business litigation...
Are Big Law Partners a Vanishing Species?
Posted on May 07, 2009Professor Larry Ribstein links to an article on the site called Above the Law and provides his own commentary about some big firms who are firing and de-equitizing partners who are less profitable. Here is the good professor's post about the related issues facing big firms and their partners.
Amendments to Delaware General Corporation Law
Posted on May 06, 2009The Harvard Law School Corporate Governance Blog has a post here that summarizes the most recent amendments to the Delaware General Corporation Law (DGCL) that will become effective on August 1, 2009. Here is a prior post that also referred to the same DGCL amendments.
Chancery Court Grants Motion in Limine Precluding Defendants from Raising Arguments Deemed Waived
Posted on May 06, 2009Julian v. Eastern States Construction Service, Inc., Del. Ch., No. 1892-VCP (May 5, 2009), read opinion here. See prior Chancery Court decisions in this case summarized on this blog here. Kevin Brady, a highly respected Delaware litigator, provides us with the benefit of his following review of this case...
New Articles on Delaware Corporate Law
Posted on May 05, 2009New articles on Delaware corporate law came in today's mail via the current issue of The Delaware Journal of Corporate Law. There are several important articles in the current Volume 34, but there are three in particular that I would like to highlight today: Delaware and Washington as Corporate Lawmakers by Professor Mark Roe...
Live Clip of Chancery Court Trial Today on Poison Put Issue
Posted on May 04, 2009San Antonio Fire and Police Pension Fund v. Bradbury is a case that is being tried today in Delaware Chancery Court regarding "poison puts" involving the Amylin company. We previously highlighted the case here. The folks at Courtroom View Network are providing a "live feed" of the proceedings today and tomorrow...
Judge Posner Discusses His New Book About Our Current Economic Crisis
Posted on May 04, 2009The prolific Judge Richard Posner has recently written a book called A Failure of Capitalism: The Crisis of '08 and the Descent into Depression, and he is now blogging about it in order to provide updates on the ongoing economic crisis which continues apace...
The Intersection of Faith and Corporate Law
Posted on May 03, 2009Corporate Law Professor Lyman Johnson's scholarship on the fiduciary duty of corporate officers has been previously highlighted on this blog (e.g., here). Professor Johnson holds joint faculty appointments at Washington and Lee University as well as the University of St...
Chancery Dismisses Fiduciary and Unjust Enrichment Claims Based on Terms of Contract
Posted on April 30, 2009Nemec v. Shrader, No. 3878-CC, and Wittkemper v. Shrader, No. 3934-CC (consolidated cases)(Del. Ch., April 30, 2009), read opinion here. The factual basis of this Chancery Court decision involves shareholders who had signed agreements that governed the redemption of their shares...
Chancery Awards $1 as Nominal Damages for Breach of Contract; No "Knowledge-Qualifier" for Representation Clause
Posted on April 30, 2009Ivize of Milwaukee, LLC v. Compex Litigation Support LLC, and Ivize of Kansas City, LLC v. Compex Litigation Support LLC, No. 3158-VCL and 3406-VCL (consolidated)(Del. Ch., April 27, 2009), read opinion here. This Delaware Chancery Court case arises out of the unhappy purchase of a litigation support company...
Chancery Court Grants Limited Reargument of Metromedia Appraisal Decision
Posted on April 29, 2009In Re Appraisal of Metromedia International Group, No.3351-CC (Del. Ch., April 28, 2009), read letter decision here. Kevin Brady, a highly respected Delaware litigator, provides us with the benefit of his following review of this Delaware Chancery Court case: Chancellor Chandler granted Petitioner's Motion for Reconsideration of the Court's April 16, 2009 post-trial appraisal decision where the Court determined that the fair value of respondent's Metromedia International Group, Inc...
Chancery Court Denies (Barely) Motion to Dismiss for Failure to Prosecute But Imposes Penalty on Plaintiff's Counsel
Posted on April 29, 2009Tooley v. AXA Financial, Inc., et al., No. 18414-CC (Del. Ch., April 29, 2009), read opinion here . Kevin Brady, a highly respected Delaware litigator, provides us with the benefit of his following analysis of this recent ruling. In this Chancery Court decision, Chancellor Chandler denied (but just barely) defendants' motion to dismiss for failure to prosecute pursuant to Court of Chancery Rules 41(b) and (e)...
Chancery Court Orders Company to Hold Shareholders Meeting per DGCL Section 211
Posted on April 28, 2009Opportunity Partners, L.P. v. Transtech Service Partners, Inc., No. 4340-VCP (Del. Ch., April 14, 2009), read opinion here. This Chancery Court decision granted a petition pursuant to Section 211 of the DGCL to compel a shareholders meeting that had not been held for more than 13 months...
Professor Bainbridge on: North Dakota v. Delaware
Posted on April 27, 2009For those who carelessly repeat the rumor that Delaware corporate law is "pro-management" and for those who argue that the recent change in the North Dakota corporate statute offers a superior governance model for shareholders in public companies, Professor Bainbridge has written an article that provides a more nuanced and scholarly analysis...
Chancery Grants Creditor a TRO to Bar Fraudulent Transfers of Debtor
Posted on April 27, 2009Mitsubishi Power Systems Americas, Inc. v. Babcock & Brown Infrastructure Group US, LLC, et al.,(April 24, 2009), read revised letter decision here. The Chancery Court heard a motion for temporary restraining order on April 22, 2009 by telephone conference, and issued this written decision on Friday, April 24, 2009...
D & O Coverage Exclusions
Posted on April 26, 2009The Harvard Law School Corporate Governance Blog here has a summary and discussion by Joseph McLaughlin from Simpson Thacher & Bartlett LLP, of a recent decision that addresses whether a misrepresentation or omission by one officer or director in an application for D & O coverage, can serve as a basis to exclude coverage for an "innocent" director who did not participate in the failure to complete the application properly...
Chancery Court Dismisses Derivative Complaint Pending Report of Special Committee
Posted on April 26, 2009FLI Deep Marine, LLC v. McKim, No. 4138-VCS (Del. Ch. March 24, 2009), read opinion here. This Chancery Court decision explains the importance of determining whether or not pre-suit demand is appropriate prior to filing a derivative suit. In this case, for reasons unexplained, demand was made on the board prior to a derivative suit being filed...
Chancery Consolidates Related Actions Pursuant to Rule 42
Posted on April 25, 2009Bank of America v. Steel Partners II (Offshore) Ltd. ; and Archstone Partners, L.P. v. Lichtenstein , (consolidated cases), Del. Ch., (April 21, 2009), read opinion here. This Delaware Chancery Court letter ruling involved several actions that were filed to enjoin a proposed restructuring transaction...
Chancery Court Rules on Testamentary Capacity and Donative Intent in Will Dispute
Posted on April 24, 2009Sloan v. Segal, No. 2319-VCS (Del. Ch. April 24, 2009), read opinion here. For anyone who wants to read a depressing story of a family whose mother was estranged from two of her sons for the last 20 years or so of her life, and after her death, those two sons fought over the estate of their mother with a third son, this is the 'soap opera' of a case for you...
Statute of Limitations May Not Be Tolled by Section 220 Demand
Posted on April 23, 2009Sutherland v. Sutherland, Del. Ch., No. 2399-VCL (April 22, 2009), read opinion here. This is a two-page letter decision that is part of a long line of cases in this ongoing internecine battle among shareholders in a family business. The seven (7) prior Chancery Court decisions in this case have been summarized on this blog here...
Chancery Court Rejects Request to Dissolve LLC
Posted on April 23, 2009In Re: Arrow Investment Advisors, LLC, Del. Ch., No. 4091-VCS (April 23, 2009), read opinion here. This Chancery Court decision dismissed a petition seeking a dissolution of an LLC pursuant to Section 18-802 of the Delaware LLC Act. Although each year brings more case law interpreting this statute, there is still a comparative paucity of decisions interpreting this section of the LLC Act; thus, this ruling is helpful for purposes of determining when the court will grant a judicial dissolution under the applicable statutory standard...
Chancery Court Imposes Fiduciary Duties on LLC Members
Posted on April 21, 2009Bay Center Apartments Owner, LLC v. Emery Bay PKI, LLC, Del. Ch., No. 3658-VCS (April 20, 2009), read opinion here. This Delaware Chancery Court decision addresses fiduciary duties and related issues in an LLC context, and should be of great interest to those lawyers who practice business litigation...
COURT GRANTS SUMMARY JUDGMENT ON CLAIMS ARISING OUT OF FAMILY OWNED BUSINESS DISPUTE
Posted on April 21, 2009Stevanov v. O'Connor, No. 3820-VCP(Del. Ch., April 21, 2009), read opinion here. Kevin Brady, a highly respected Delaware litigator, provides us with the benefit of his summary of this Delaware Chancery Court decision as follows: Vice Chancellor Parsons granted in part and denied in part defendant - ex-husband's motion for summary judgment with respect to his ex-wife's claims for equitable and compensatory relief based on causes of action relating to breach of fiduciary duty, conversion, unjust enrichment, and fraud...
Poison Puts and Delaware Corporate Law
Posted on April 20, 2009Prof. Steven Davidoff as The Deal Professor on the DealBook blog, here, writes about pending battles for control over the pharmaceutical company, Amylin, including efforts by Carl Icahn and others to nominate new directors, as well as a pending suit in Delaware Chancery Court by a pension fund against Amylin...
Who Will Fill Vacancy on the Delaware Chancery Court?
Posted on April 20, 2009As reported previously here, one of the Vice Chancellors on the Delaware Chancery Court is not seeking reappointment after his term expires in July 2007. The process for his replacement involves the appointment by the Governor with the consent of the Delaware Senate...
Chancery Court Interprets Trust Document's Intent
Posted on April 20, 2009In the Matter of Lammot DuPont Copeland Trust No. 5400, dated March 12, 1956, and the Lammot DuPont Copeland Trust Under Agreement dated April 25, 1955, Del. Ch., No. 192-CC (April 20, 2009), read opinion here; In this opinion, the Chancery Court resolved a dispute on summary judgment with respect to the language of two trusts valued at a total of $22 million...
In Appraisal Action Chancery Court Finds That Fair Value for Preferred Shares Based on Language in Certificate of Designation
Posted on April 19, 2009In Re: Appraisal of Metromedia Int'l Group Inc, Del. Ch., No. 3351-CC (April 16, 2009), read opinion here. Kevin Brady, a highly respected Delaware litigator, provides us with the benefit of his following review of this case. On April 16, 2009, in a post-trial decision in a consolidated appraisal proceeding, Chancellor Chandler addressed the issue of appraisal of preferred shareholders' stock and the primacy of contract as a measure of fair value...
Susan Boyle and Corporate Law?
Posted on April 19, 2009I am usually very careful not to "go off topic" and thereby divert the attention of my loyal readers from the usual fare that they expect on these pages but in this instance I am linking to two posts from corporate law professor Gordon Smith on his blog called The Conglomerate, here and here, about the recent sensation about Susan Boyle, the unlikely rising star from the U...
Upcoming Chancery Court Hearing and Trial Available Online Via Live Video/Audio in "Real Time"
Posted on April 16, 2009A Chancery Court hearing on Monday, April 20, in the ongoing AIG litigation to address issues raised in the Court's Feb. 10, 2009 opinion, that was summarized on this blog here, such as the applicability of equitable tolling to non-fiduciaries, will be available for live viewing "in real time" via a video/audio feed from the courtroom that can be viewed from one's computer, as provided by the online service at www...
Chancery Court Dismisses Sundry Claims Against LLC Members
Posted on April 15, 2009Kuroda v. SPJS Holdings, L.L.C., Del. Ch., No. 4030-CC (April 15, 2009), read opinion here. This case involves the following claims among members of an LLC, arising out of an LLC Agreement: (i) breach of contract; (ii) tortious interference with contract; (iii) tortious interference with prospective economic advantage; (iv) breach of the implied covenant of good faith and fair dealing; (v) conversion; (vi) unjust enrichment; and (vii) civil conspiracy...
New Delaware Statute Allowing Proxy Access Pursuant to Bylaw Provision
Posted on April 15, 2009Professor Lisa Fairfax on The Conglomerate blog here, provides a helpful overview of the new Delaware statute, here, Section 112, effective August 1, 2009, regarding allowance (not requirement) pursuant to a bylaw provision, of shareholder-nominated candidates for director to be included in proxy statements...
Chancery Court Grants Partial Summary Judgment to Both Parties in Self-Dealing Case
Posted on April 15, 2009Rhodes v. SilkRoad Equity, LLC, Del. Ch., No. 2133-VCN (April 15, 2009), read letter opinion here. Prior opinions in this case from the Delaware Chancery Court were reviewed on this blog here. Kevin Brady, a highly respected Delaware litigator, provides us with the benefit of his following review of this Delaware Chancery Court decision...
Conflicts of Interest for Corporate Lawyers
Posted on April 14, 2009Kevin LaCroix has a post here on his blog, The D & O Diary, that discusses the April 1, 2009 decision here in U.S. v. Nicholas, et al., from the U.S. District Court for the Central District of California, involving what the court found were conflicts of interest and breaches of a lawyer's duty of loyalty due to a firm's representation of Broadcom in a stock options investigation at the same time the firm was also representing the CFO in related litigation...
Chancery Court Denies Request for Expedited Proceedings in Board Contest Between Exelon Corp. and NRG Energy, Inc.
Posted on April 14, 2009Louisiana Sheriffs' Pension & Relief Fund v. Crane, Del. Ch., No. 4193-VCL (April 14, 2009), read letter decision here. This case involves the hostile bid by Exelon Corp. to take over NRG Energy, Inc. The plaintiffs in this case are stockholders of NRG who claim that NRG directors are breaching their fiduciary duties by not agreeing to the bid by Exelon...
Chancery Court Permits Shareholder By-Law Proposal to be Placed on Ballot While Preserving Company's Legal Challenge for Later Review
Posted on April 14, 2009Kistefos AS v. Trico Marine Services, Inc., Del. Ch., No. 4497-CC (April 14, 2009), read letter opinion here. Kevin Brady, a highly respected Delaware litigator, provides us with the benefit of his review of this case as follows. This Chancery Court decision involves an action by a shareholder seeking a declaration that the company had improperly blocked a shareholder vote on a proposed bylaw...
Hexion v. Huntsman. Revisiting the Chancery Court Rulings and Wachtell Lipton's Role
Posted on April 13, 2009Prof. Steven Davidoff, on his Deal Professor blog here, discusses the Chancery Court decision in Hexion v. Huntsman, and the litigation strategy engineered by the Wachtell Lipton firm. The several Chancery Court decisions in the case are discussed on this blog here...
Selling Corporation Lacked Standing to Make Post-Merger Claim for Selling Shareholders
Posted on April 13, 2009HLSP Holdings Corp. v. Fortune Management, Inc., Del. Super., C.A. No. 08C-08-175 WCC (March 31, 2009), read opinion here. This Delaware Superior Court decision granted a summary judgment motion to the defendant purchaser in connection with a claim that a merger agreement was breached because the purchaser did not take all necessary actions to cause the stock to be registered and freely tradeable on the stock exchange until a date after the stock price declined sharply...
Motion to Compel Granted
Posted on April 11, 2009In re: John Q. Hammons Hotels, Inc. Shareholder Litigation, Del. Ch., No. 758-CC (March 25, 2009), read letter decision here. This Chancery Court ruling granted a motion to compel pursuant to Rule 26(b)(1) for post-merger financial data...
Happy Holy Days
Posted on April 10, 2009For those readers who observe Good Friday, Easter and/or Passover, you have my prayerful best wishes for these Holy Days.
Delaware Supreme Court Reverses Chancery Court Based on Statute of Limitations and Laches
Posted on April 09, 2009Reid v. Spazio et al., Del. Supr., No. 199, 2008 (April 9, 2009), read opinion here. Kevin Brady, a highly respected Delaware litigator, provides us with the benefit of his review of this decision. Yesterday, the Delaware Supreme Court reversed and remanded the Court of Chancery's dismissal of plaintiff's complaint in this matter on grounds that it was barred by the applicable statute of limitations and by laches...
Review of Professor Bainbridge's Book on Corporate Governance
Posted on April 06, 2009Professor Bainbridge's recent book on corporate governance, titled: The New Corporate Governance in Theory and Practice was previously highlighted here on this blog. A review of the book was recently penned by Richard Forsten, a Delaware lawyer with the Buchanan Ingersoll firm...
Chancery Court Grants Stay Requested by Special Litigation Committee Except for Production of Electronic Information
Posted on April 06, 2009London v. Tyrrell, Del. Ch., No. 3321-CC (April 2, 2009), read letter decision here. Kevin Brady, a highly respected Delaware litigator, has provided us with the following case review. In a interesting twist on the issue of staying discovery so the Special Litigation Committee can complete its investigation, Chancellor Chandler, in a two-page letter decision on April 2, 2009, granted a request by the Special Litigation Committee of the Board of MA Federal, Inc...
Chancery Court Denies Fee Application Again on Remand; Finds Presumption Rebutted that Fee Petitioner Was Cause of Increase in Tender Price
Posted on April 06, 2009In re William Lyon Homes Shareholder Litigation Consolidated, C.A. No. 2015-VCN (April2, 2009), read letter decision here. See prior Delaware decisions in this case here and here. Kevin Brady, a highly respected Delaware litigator, provides us with this case summary...
Chancery Grants Motion to Intervene; Dismisses Claims of Unrepresented Entities
Posted on April 05, 2009Harris v. RHH Partners, LP , et al., Del. Ch., No. 1198-VCN April 3, 2009), read opinion here. Kevin Brady, a highly respected Delaware litigator, provides us with the benefit of his analysis of this case. In this Chancery Court letter decision, Vice Chancellor Noble ruled on two issues in a dispute involving unrepresented entities and a limited partnership agreement: (i) the failure to secure replacement counsel for the juristic entities involved in this action; and (ii) an application to intervene...
Delaware Supreme Court Affirms Chancery's Partial Award of Attorneys' Fees
Posted on April 04, 2009Swann Keys Civic Assoc. v. Shamp, (Del. Supr., March 26, 2009), read opinion here. This Delaware Supreme Court decision affirmed the Chancery Court's ruling that only two-thirds of the attorneys' fees of the prevailing side would be paid based on the trial court's "fee-shifting", despite the absence of submitted affidavits...
21st Annual Tulane Corporate Law Institute--Final Update
Posted on April 03, 2009This is my sixth and final update from the corporate law seminar in New Orleans. The final panel today is titled: "The Role of Counsel in Transactions: Enhanced Ethics and Professionalism". Members of the panel include Vice Chancellor Donald Parsons of the Delaware Chancery Court as well as several leading corporate practitioners...
21st Annual Tulane Corporate Law Institute--Update V
Posted on April 03, 2009This is my fifth update from this corporate law seminar in New Orleans. On this second day, the third panel presentation this morning is titled: "Delaware Developments". The panel members include a member of the Delaware Chancery Court and a few leading Delaware corporate practitioners...
21st Annual Tulane Corporate Law Institute--Update IV
Posted on April 03, 2009This is my fourth installment of live blogging from the above seminar in New Orleans. The second panel on this second day of this corporate law gathering is titled: "Roles Played and Issued Faced by Financial Advisors in Today's Deals". Among the panel members are Delaware Supreme Court Justice Henry duPont Ridgely as well as leading corporate practitioners and a representative of the SEC...
21st Annual Tulane Corporate Law Institute--Update III
Posted on April 03, 2009This is the second day of the annual gathering of corporate law types in New Orleans and this is my third update on the seminar. The panel this morning is entitled: " M & A and the Media". Among those on the panel includes reporters from The Wall Street Journal and The New York Times...
21st Annual Tulane Corporate Law Institute--Update II
Posted on April 02, 2009This is the second live installment from the above 2009 corporate law seminar in New Orleans. Among the other bloggers posting live, see, e.g., here. As a follow-up to my last post, the panel presentation of this afternoon is entitled: Public Company M & A in 2009: What to Expect? The moderators are Victor Lewkow and James Morphy, Jr...
21st Annual Tulane Corporate Law Institute
Posted on April 02, 2009I'm blogging live from the 21st Annual Tulane Corporate Law Institute, a two-day seminar on corporate law that brings together scholars, practitioners and judges who want to explain, and to learn about the latest developments in corporate law. There is always a large contingent of Delaware lawyers and judges...
Chancery Court Rejects "For Now" a Class Action Settlement in Countrywide Shareholder Litigation
Posted on April 02, 2009In re Countrywide Corporation Shareholders Litigation, Del. Ch., C.A. No 3464-VCN (March 31, 2009), read opinion here. Kevin Brady, a respected Delaware litigator, provides us with the benefit of his following review of this case. In this Chancery Court decision, Vice Chancellor Noble denied 'for the time being' an application to certify a class and approve a stipulated settlement because the settlement would have improperly eliminated some investors' claims for common law fraud...
Vice Chancellor Lamb to Retire from Chancery Court
Posted on April 01, 2009Vice Chancellor Lamb of the Delaware Chancery Court has notified the Governor of Delaware that he would not seek reappointment after his 12-year term expires in July 2009.
Chancery Court Considers Evidence Outside Operating Agreement to Determine Membership of LLC for Purpose of Books and Records Demand Under Section 18-805 of LLC Act
Posted on April 01, 2009Mickman v. American International Processing, L.L.C., et al, (Del. Ch., C. A. No. 3869-VCP, April 1, 2009), read opinion here. Kevin Brady, a highly respected Delaware litigator, provides us with the benefit of his analysis of this case...
California Decision Backs Attorney's Refusal to Give Privileged Documents to Corporate Director
Posted on April 01, 2009My regular ethics column for the national publication of the American Inns of Court, called The Bencher, in its March/April 2009 issue, presented an overview of a California decision that backed the lawyer for a corporation who refused to disclose to a corporate director certain documents that were deemed covered by the attorney/client privilege...
Tenth Circuit Applies Delaware Law in Advancement Case
Posted on April 01, 2009Westar Energy, Inc. v. Lake, 552 F.3d 1215 (10th Cir. 2009). See prior post on trial court opinion here. Danielle Blount, an associate in our Delaware office, provided the following case summary. In this decision of the U.S. Court of Appeals for the 10th Circuit, the Appellant-Plaintiff Westar Energy, Inc...
Chancery Clarifies Limitations on Contractual Waiver of Duties in Corporations v. LLCs
Posted on March 31, 2009Sutherland v. Sutherland, 2009 WL 750287 (Del. Ch., March 23, 2009). Professor Larry Ribstein, a nationally recognized expert on LLCs, provides an analysis of this Chancery Court opinion which demonstrates how one can waive duties in the LLC format but such waivers are more limited in the corporate context...
Chancery Court Determines Third-Party Consents Can Thwart Purchase Agreement Resulting in Significant Damage Awards
Posted on March 31, 2009West Willow-Bay Court, LLC v. Robino-Bay Court Plaza, LLC, Del. Ch., No. 2742-VCN (Feb. 23, 2009), read opinion here. Danielle Blount, an associate in our Delaware office, prepared the following summary of the case. In this post-trial opinion, the Delaware Court of Chancery determined the appropriate damage award where Defendant breached a purchase agreement by its failure to secure a third party's consent...
Civil Rights Expert, Professor Leland Ware, Publishes Book with Foreward by Vice President Joe Biden
Posted on March 30, 2009I am pleased to help to publicize a recent publication by a civil rights expert and friend, Professor Leland Ware. Professor Ware formerly was a trial attorney in the Civil Division of the U.S. Department of Justice and is now the Louis L. Redding Chair and Professor of Law & Public Policy at the University of Delaware...
Chancery Court Dismisses Suit for Breach of Non-Competition Covenant Due to Lack of Personal Jurisdiction
Posted on March 30, 2009Mobile Diagnostic Group Holdings, LLC v. Suer, Del. Ch., No. 4298-CC (March 24, 2009), read opinion here. Kevin Brady, a highly respected Delaware litigator, provides us with the following review of this decision. Chancellor Chandler dismissed this action seeking to enforce the terms of non-competition covenants that defendant Suer allegedly agreed to in connection with the sale of his employer to plaintiffs...
Chief Justice Myron Steele Speaks on the Future of Fiduciary Duties in Corporate Law
Posted on March 29, 2009Professor Gordon Smith has a post here about a seminar at Notre Dame Law School on the Future of Fiduciary Duties in Corporate Law that was held this past Friday. Delaware Supreme Court Chief Justice Myron Steele was the keynote speaker, and in addition to Professor Smith and the Chief Justice, other luminaries who presented on this key topic included Professor Larry Ribstein of Ideoblog fame, a leading authority on alternative entities.
Unanimous Delaware Supreme Court Addresses Revlon and Caremark Issues
Posted on March 26, 2009Lyondell Chemical Co. v. Ryan, Del. Supr. (March 25, 2009), read opinion here. The Delaware Supreme Court rendered this unanimous en banc decision last evening. It was much anticipated in the corporate law world and in the few hours since its release it has already generated substantial commentary among corporate law professors and similar commentators...
Indemnification and Advancement
Posted on March 20, 2009The Harvard Law School Corporate Governance Forum posted an article today here about indemnification and advancement which includes a discussion of recent Delaware decisions that address these different but related concepts.
Chancellor Chandler to Speak in North Dakota
Posted on March 20, 2009Chancellor William B. Chandler of the Delaware Court of Chancery is scheduled to speak at a symposium in North Dakota with other corporate law experts. The symposium relates to the North Dakota Publicly Traded Corporations Act and details are here...
Chancery Court Drills Down and Dismisses Breach of Fiduciary Duty Claim in Dispute about Oil and Gas Exploration Investments
Posted on March 19, 2009Addy v. Piedmonte, et al., Del. Ch., No. 3571-VCP (March 18, 2009), read opinion here. Kevin Brady, a highly respected Wilmington lawyer, prepared the following review of this case: In this Chancery Court decision, Vice Chancellor Parsons dismissed a claim for breach of fiduciary duty in a case with a complex fact pattern involving oil and gas exploration participation agreements, guarantees and notes...
Chancery Court Stays Delaware Action in Favor of California Federal Actions
Posted on March 18, 2009Langford v. Barnholt and KLA-Tencor Corp., No. 2295-VCL (Del. Ch., March 17, 2009), read letter ruling here. Kevin Brady, a highly respected Delaware litigator, has prepared the following review of this case. In this Chancery Court opinion, Vice Chancellor Lamb revisited a decision in this case that had been in place since August 2008 when the Court stayed the action pending the outcome of the motion to terminate filed by KLA-Tencor Corporation's Special Litigation Committee in the related federal derivative actions in California...
Twitter for Lawyers
Posted on March 18, 2009Gina Furia Rubel, Esq., a specialist in public relations for lawyers, wrote an article that appeared today in The National Law Journal here about the use by lawyers of Twitter, one of the newer types of social media. For those who want to be aware of the latest tools available online for connecting with others, including existing clients, it is a very worthwhile article.
Article on Good Faith in Corporate Law Co-Authored by Member of Delaware Court of Chancery
Posted on March 18, 2009A paper on the role of good faith in corporate governance was recently penned by leading practitioners of Delaware corporate law, including one member of the Delaware Court of Chancery. The Harvard Law School Corporate Governance Forum highlights the article here...
U.S. Supreme Court Justice Clarence Thomas Speaks
Posted on March 17, 2009U.S. Supreme Court Justice Clarence Thomas is one of my favorite jurists. I enjoyed reading his autobiography and found its soul-searching, timeless principles to be uplifting. Here is a post from The WSJ Law Blog about one of the rare speeches that he gave recently, and it reminded me why I still think he is a great man.
Bainbridge on Chandler's Citigroup Decision
Posted on March 17, 2009Professor Bainbridge provides scholarly commentary here on the recent Chancery Court decision in Citigroup, including a rebuttal to Professor Jay Brown and an analysis of Caremark duties, as well as a discussion of the theoretical and practical underpinning of the Business Judgment Rule...
Jones v. Harris (a/k/a Judge Easterbrook v. Judge Posner on Law and Economics)
Posted on March 13, 2009Jones v. Harris, 537 F.3d 728 and 527 F.3d 627 (7th Cir. 2008). These two citations refer to a majority and dissenting opinion that address the fiduciary duties of advisors to mutual funds based on federal statutes, as well as compensation payable to those advisors...
Supreme Court Rules on Interface between Indemnification Rights and Res Judicata
Posted on March 13, 2009LaPoint v. AmerisourceBergen Corp., (Del. Supr., March 12, 2009), read opinion here. The Delaware Supreme Court in this decision addressed the procedural issues in connection with pursuing indemnification rights based on a contract in light of defenses based on res judicata and statute of limitations...
Ryan v. Lyondell: Professor Waits for Decision on Appeal
Posted on March 11, 2009Professor Andrew Lund opines on The Conglomerate blog here with his predictions regarding the decision expected from the Delaware Supreme Court on the interlocutory appeal that Delaware's High Court court accepted in the Ryan v. Lyondell case in which the Chancery Court denied a Motion for Summary Judgment in a matter that raises key issues such as Revlon duties and the exculpation for due care claims permitted under DGCL Section 102(b)(7)...
Delaware Supreme Court Affirms Chancery Court in AT & T Case Involving Stock Options
Posted on March 10, 2009AT & T Corp. v. Lillis, (Del. Supr., March 9, 2009), read opinion here. In a rare split decision, the Delaware Supreme Court ruled 3-2 to affirm the original decision of the Chancery Court that was initially reversed by the Supreme Court (also a procedural rarity)...
Chancery Court Approves Yahoo Settlement
Posted on March 09, 2009In Re Yahoo! Shareholders Litigation, (Del. Ch., March 6, 2009), read opinion here. Kevin Brady, a highly respected Wilmington litigator, prepared this review of the short letter decision. Chancellor Chandler issued a letter opinion today approving the In Re Yahoo! Shareholders Litigation class action and derivative action settlement, awarding plaintiffs $8...
Chancery Court Hears Injunction Motion in Genentech/Roche Imbroglio
Posted on March 09, 2009A hearing on a motion for an injunction is now being held in the Delaware Chancery Court in the tug-of-war between Genentech and Roche, and one can watch the proceedings live online via www.courtroomview.com Here is an article with background details on the dispute...
Rohm and Haas v. Dow Chemical Trial in Delaware Chancery Court Available Live Online
Posted on March 08, 2009The big trial in this case starts tomorrow, Monday, March 9 (assuming no settlement) in the Delaware Chancery Court in Georgetown and will be available to watch live online via www.courtroomview.com Of course, there is a charge for the service and details are available at the foregoing link...
Chancery Court Rejects BASF's Claim to be Bought out of Partnership Involving Lyondell
Posted on March 06, 2009BASF Corp. v. POSM II Properties Partnership, L.P., (Del. Ch., Mar. 3, 2009), read opinion here. Kevin Brady, a highly respected Delaware litigator, prepared the following review of the case. In this Chancery Court decision, Vice Chancellor Strine dismissed an action brought by BASF Corporation, seeking to withdraw from defendant POSM II Limited Partnership, L...
Professor Verret Criticizes Government Bailout of Banks
Posted on March 06, 2009Professor J.W. Verret of the George Mason University School of Law, and a former law clerk for the Delaware Court of Chancery, has written an article in Forbes, here, arguing that the government bailout of banks, that involves at least partial government ownership, will weaken the banks...
Chancery Denies Request for Receiver; Insolvency Not Proven
Posted on March 06, 2009Banet, et al. v. Fonds de Régulation et de Contrôle Café Cacao, et al., (Del. Ch., Feb. 18, 2009), read letter decision here. A prior decision in this case was summarized here. Danielle Blount, an associate in our Wilmington office, provided the following review of the case...
Federal Court Refuses to Shift Cost of OCR:Multi-Factor Test Applied When Conducting Cost-Shifting Analysis
Posted on March 06, 2009Proctor & Gamble Co. v. S.C. Johnson & Son, Inc., 2009 U.S. Dist. Lexis 13190 (E.D. Tex.), read Order of Court here. Danielle Blount, an associate in our Wilmington office, prepared this case summary. Optical Character Recognition ('OCR'), is where static images of text are translated into a format, via computer software program, that can be searched or read electronically...
Chancery Court Grants Summary Judgment on Claims of Reformation of a Merger Agreement and Unjust Enrichment
Posted on March 04, 2009Chancery Court Denies Full Amount of Advancement Request
Posted on March 02, 2009Underbrink v. Warrior Energy Servs. Corp., (Del Ch., Feb. 24, 2009), read opinion here. (HT: Delaware Business Litigation Report). A prior ruling is this case can be found at the following citation: Underbrink v. Warrior Energy Servs. Corp., 2008 WL 2262316 (Del...
Chancery Court Orders Restitution to Victim Under Uniform Fraudulent Transfer Act
Posted on February 28, 2009Chancery Court Dismisses Direct and Derivative Claims Against Company in Bankruptcy
Posted on February 28, 2009Chancery Decides "Dueling" Motions to Compel in Rohm and Haas v. Dow Chemical Suit
Posted on February 26, 2009Chancery Rejects Claims for Books and Records Per Section 220, For Lack of Proper Purpose
Posted on February 26, 2009Amendments to Chancery Court Rules
Posted on February 24, 2009The Delaware Chancery Court, by Order available here, has amended Chancery Court Rules 3(aa) and 15(c), effective March 2, 2009. The text of the Order is so short, I will repeat it verbatim: This 31st day of December, 2008, IT IS HEREBY ORDERED that Court of Chancery Rule 3(aa) is amended by deleting the first sentence of Rule 3(aa) in its entirety and substituting in place of the first sentence the following language, which shall be effective Monday, March 2, 2009...
Chancery Court Dismisses Shareholder Claims Against Citigroup for Failure to Monitor Subprime Risks But Allows Waste Claim for CEO Pay
Posted on February 24, 2009In Re Citigroup Inc. Shareholder Derivative Litigation, (Del. Ch., Feb. 24, 2009), read opinion here. This Delaware Chancery Court opinion should be of widespread interest because it is the first detailed analysis of potential liability of directors under Delaware law for claims relating to a company suffering major losses resulting from substantial exposure to subprime debt...
Delaware Chancery Court Appoints Custodian for Deadlocked Corporation
Posted on February 22, 2009Miller v. Miller, 2009 Del. Ch. LEXIS 16 (Feb. 10, 2009). This Delaware Chancery Court opinion appointed a custodian (for a limited time and with limited authority), for a corporation owned 50/50 by two brothers. The appointment was pursuant to Section 226 of the Delaware General Corporation Law (DGCL)...
Chancery Court Denies Requested Protective Order in Rohm and Haas v. Dow Chemical Litigation
Posted on February 20, 2009Rohm and Haas Co. v. The Dow Chemical Co., (Del. Ch., Feb. 19, 2009), read letter decision here. The Chancery Court denied a Motion for Protective Order filed by proposed third-party deponents in this procedural ruling. Dow sought to depose several members of the Haas family who were also trustees of the trust that is a major shareholder...
Chancery Court Appoints Liquidating Trustee Appointed for Deadlocked LLC
Posted on February 20, 2009Spellman v. Katz, (Del Ch., Feb. 6, 2009), read opinion here. This Delaware Chancery Court opinion involved the appointment of a liquidating trustee to wind-up the LLC where the two 50/50 owners were deadlocked and their Operating Agreement already provided for dissolution...
Chancery Court Allows Claims To Proceed Against Greenberg, Other AIG Directors
Posted on February 19, 2009American International Group, Inc., Consolidated Derivative Litigation; AIG, Inc. v. Greenberg, et al., 2009 Del. Ch. LEXIS 15 (Feb. 10, 2009), read opinion here. This Chancery Court decision denied a Motion to Dismiss breach of fiduciary duty claims against former AIG Chairman Maurice "Hank" Greenberg and other AIG directors in connection with the long list of claims relating to AIG's need to restate years of financial statements, and related losses of billions of dollars in stockholder value...
Chancery Court Rejects Demand For Books and Records
Posted on February 18, 2009Norfolk County Retirement System v. Jos. A. Bank Clothiers, Inc., (Del. Ch., Feb. 12, 2009), read opinion here. This Delaware Chancery Court decision denied a demand for books and records under Section 220 of the Delaware General Corporation Law...
E-Discovery Training Academy
Posted on February 17, 2009The following information comes to us courtesy of Wilmington lawyer, and e-discovery expert, Kevin Brady, who was a key player in the program described: Georgetown University Law Center Successfully Completes Inaugural E-Discovery Training Academy Georgetown University Law Center was the site for the “first-of-its-kind” week-long training academy on electronic discovery law and technology...
Chancery Court Finds Pre-Suit Demand Not Excused
Posted on February 16, 2009In Re: Affiliated Computer Services, Inc. Shareholders Litigation, (Del. Ch., February 6, 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...
Delaware Law v. New York Law on LLCs
Posted on February 16, 2009Professor Larry Ribstein, one of the nation's leading scholars on LLCs, writes here about a recent NY decision that recognizes the right of an LLC member to an accounting--despite no such right being found in NY's LLC statute...
Delaware Chancery Court Rules That Wachtell Firm Not Disqualified Due to Prior Representation of Dow From Suing Dow for Rohm and Haas
Posted on February 12, 2009The Delaware Chancery Court ruled today that it would deny a motion to disqualify the Wachtell Lipton firm from representating Rohm and Haas in its pending suit against Dow Chemical despite the prior representation of Dow by Wachtell. The expedited lawsuit, filed earlier this month and now scheduled for trial on March 9, is an effort by Rohm and Haas to force Dow to consummate a merger, and was highlighted on this blog here...
Delaware Chancery Court Rules That Wachtell Firm Not Disqualified Due to Prior Representation of Dow, From Suing Dow for Rohm and Haas
Posted on February 12, 2009The Delaware Chancery Court ruled today that it would deny a motion to disqualify the Wachtell Lipton firm from representating Rohm and Haas in its pending suit against Dow Chemical despite the prior representation of Dow by Wachtell. Rohm and Haas Co...
Chancery Reiterates Standards for TRO and Expedited Proceedings
Posted on February 11, 2009Casale v. Bare, (Del. Ch., Jan. 27, 2009), read letter decision here, is a short Chancery Court ruling that is not remarkable for any reason except that it reiterates in an terse fashion what has been previously enunicated innumerable times in the past by this court, regarding: (i) the prerequisites for the issuance of a temporary restraining order (TRO); and (ii) the requirements that must be satisfied before the court will grant expedited proceedings...
Supreme Court Remands Post-Trial Decision for Reconsideration of a Pre-Trial Daubert Ruling on Expert Witnesses
Posted on February 08, 2009General Motors Corporation and Ford Motor Company v. Grenier , (Del. Supr., Feb. 4, 2009), read opinion here. This Delaware Supreme Court decision demonstrates the importance on appeal of rulings at a pre-trial Daubert hearing. Delaware's High Court remanded the case for the judge who decided the Daubert motion to reconsider the admissibility of the expert opinions of the plaintiff’s expert...
Chancery Court Allows Purchaser to Continue Post-Closing Dispute Based on Contract Claims
Posted on February 07, 2009BAE 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...
Chancery Addresses Claims That Ex-Employees of Agilent Took Trade Secrets to Start New Company
Posted on February 07, 2009Agilent Technologies, Inc. v. Kirkland, (Del. Ch., Jan. 20, 2009), read opinion here. The common fact pattern addressed in this Chancery Court decision: ex-employee's former employer alleges that confidential data taken from former employer is being used against it by ex-employee in new business...
Chancery Court Grants Motion to Enforce Settlement
Posted on February 07, 2009Fox v. Paine, (Del. Ch., Jan. 22, 2009), read opinion here. This Chancery Court opinion involves the breakup of the wealth management partnerships between Saul Fox and Dexter Paine. On the even of trial, the parties entered into a settlement agreement in the form of a "memorandum of understanding" (MOU)...
Chancery Court Revisits Lease Issue Subject to D.C. Law
Posted on February 07, 2009Liberty Prop. Ltd. P’ship v. 25 Mass. Ave. Prop. LLC, (Del. Ch., Jan. 22, 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...
Supreme Court Affirms Allocation of Settlement Proceeds in Class Action Against Philadelphia Stock Exchange
Posted on February 05, 2009Schultz v. Ginsburg and Philadelphia Stock Exchange, (Del. Supr., Feb. 3, 2009), read opinion here. The Delaware Supreme Court affirmed the Chancery Court's decision in connection with the allocation of proceeds from a settlement that ended a class action against the Philadelphia Stock Exchange...
Fourth Circuit Court of Appeals, Applying Delaware Law, Dismisses Fairness Challenge to Merger Consideration Where Complaining Shareholder Tendered Shares
Posted on February 03, 2009Schwartz v. Blum, (U.S. Ct. of App., 4th Cir., Jan. 29, 2009), read opinion here. We are fortunate to have a review of this case from Kevin Brady, a partner in the Business Law Group at the Wilmington, Delaware, office of Connolly Bove...
Fourth Circuit Court of Appeals Applying Delaware Law Affirms Dismissal of Fairness Challenge to Merger Consideration Where Complaining Shareholder Tendered Shares
Posted on February 03, 2009Schwartz v. Blum, (U.S. Ct. of App., 4th Cir., Jan. 29, 2009), read opinion here. We are fortunate to have a review of this case from Kevin Brady, a partner in the Business Law Group at the Wilmington, Delaware, office of Connolly Bove...
Chancery Denies TRO Request but Requires Status Quo Order to be Negotiated
Posted on February 02, 2009Topspin Partners L.P. v. RockSolid Systems, Inc., (Del. Ch., Jan. 21, 2009), read letter opinion here. This Chancery Court case was commenced on an expedited basis, seeking dissolution and the appointment of a custodian for a closely-held company that was suffering from strife among the shareholders and the managers who could not agree on how to spend the precious few funds available to run the business, among other problems...
Delaware Supreme Court Issues Major Ruling on Shareholder Ratification Doctrine and Duties of Corporate Officers
Posted on January 28, 2009In Gantler v. Stephens, (Del. Supr., Jan. 27, 2009), read opinion here, the Delaware Supreme Court, yesterday, issued a major decision on important matters of Delaware corporate law. Delaware's High Court for the first time confirmed and clarified that officers of Delaware corporations have the same fiduciary duties as directors of Delaware corporations...
Supreme Court Affirms Dismissal of Disclosure, Loyalty and Care Claims against Sumner Redstone In Viacom and Blockbuster Deal
Posted on January 28, 2009Pfeffer v. Redstone, (Del. Supr., Jan. 23, 2009), read opinion here. We are fortunate to have a review of this recent Supreme Court decision by nationally-prominent Delaware lawyer Kevin Brady. The Delaware Supreme Court in this decision affirmed the Chancery Court's dismissal of claims pursuant to Rule 12(b)(6) against Sumner Redstone and others, in connection with a transaction involving Viacom and Blockbuster, based on duties of disclosure, loyalty and care...
Chancellor Chandler Pens Law Review Article on Delaware Corporate Law
Posted on January 27, 2009Chancellor William B. Chandler, III of the Delaware Chancery Court has co-authored with one of his former law clerks, a law review article that replies to some critics of Delaware's corporate law. The article is part of a series of law review articles just published in The University of Illinois Law Review, Volume 2009, Number 1...
Chancery Court Approves Settlement of Class Action Challenging Merger of Wrigley and Mars
Posted on January 27, 2009In re Wm. Wrigley Jr. Co. Shareholders Litigation , (Del. Ch., Jan. 22, 2009), read opinion here. (Hat tip to Potter Anderson & Corroon LLP, for their eDelaware case summary, also posted on their website). Instead of providing a conventional summary of the court's decision, this is one of those cases for which I will just highlight the key issues decided and any interested reader can read the whole opinion at the above link...
Chancery Court Suit Filed by Rohm and Haas against Dow Chemical Seeking To Force Merger
Posted on January 26, 2009A Chancery Court lawsuit was filed today by Rohm and Haas against Dow Chemical to force it to consummate a merger deal. Joseph DiStefano of the Philadelphia Inquirer has a post about it here with a link to the actual complaint and a fuller story.
Will BigLaw Follow Elvis?
Posted on January 26, 2009Professor Larry Ribstein, one of nation's foremost experts on LLCs and other alternative entities, has written extensively on the "legal aspects of large law firms". Here is a post he penned today that refers to today's front page story in The Wall Street Journal about some very large and very old law firms that have recently dissolved...
Chancery Court Rejects Claims for Attorneys' Fees; Follows American Rule
Posted on January 25, 2009In General Video Corp. v. Kertesz, (Del. Ch., Jan. 13, 2009), read opinion here, the Delaware Chancery Court refused to apply the "bad faith" exception to the Americal Rule and thus rejected a request by the victor for fee-shifting to the losing party in a case whose post-trial opinion was highlighted here...
Chancery Court Awards Fees in Derivative Case Involving Closely Held Corporation
Posted on January 22, 2009In Julian v. Eastern States Constr. Co., (Del. Ch., Jan. 14, 2009), read opinion here, the Chancery Court awarded fees to the victorious party in a derivative case involving a corporation that only had a few shareholders. The claims in this case challenged bonuses of the key executives ...
Chancery Court Examines Fiduciary Relationships Involving Trust Beneficiaries; Refers to Prodigal Son Parable
Posted on January 21, 2009In Mitchell v. Reynolds, (Del. Ch., Jan. 7, 2009), read opinion here, the Delaware Chancery Court explains in a 40-page decision the contours and the factually subtle aspects of the analysis employed to determine the existence of a fiduciary relationship, as well as the legal aspects of the duties and rights of both trust beneficiaries and the creators of the trust--who all happen to be family members in this case...
Chancery Court Decides Arbitrability Issues
Posted on January 20, 2009Carder v. Carl M. Freeman Communities, LLC, (Del Ch., Jan. 5, 2009), read opinion here, is a Chancery opinion that addresses a common issue: should a claim proceed in court or is it subject to an arbitration clause. This opinion revisits the perennial distinction between "procedural arbitrability" and "substantive arbitrability"...
Delaware's Competition for Corporate Business
Posted on January 18, 2009Professor Mark Roe of Harvard Law School posts here about his latest work that addresses the issue of Delaware's "competition" for "corporate business". Professor Roe has written several articles on related topics involving Delaware's role in the corporate world and what factors impact its ability to maintain that position...
Jurisdictional Competition
Posted on January 18, 2009Professors Larry Ribstein and Erin O'Hara have published a book called: The Law Market that addresses the topic of jurisdictional competition. Professor Ribstein has written extensively on the topic of competition among the states to attract corporations as their domicile for incorporation purposes, and related topics...
Chancery Court Dismisses Claim Against Blackstone Group Regarding Bank Merger
Posted on January 16, 2009Alliance Data Systems Corp. v. Blackstone Capital Partners V L.P. and Aladdin Solutions, Inc. , (Del. Ch., Jan. 15, 2009), read opinion here. We are fortunate to have another guest post by Delaware lawyer Kevin Brady who provided the following summary of this important decision...
Chancery Dissolves LLC Based on Section 18-802 "Reasonably Practicable" Standard
Posted on January 16, 2009In Fisk Ventures LLC v. Segal, (Del. Ch., Jan. 13, 2009), read opinion here, (hat tip: Delaware Business Litigation Report), the Delaware Chancery Court dissolved an LLC based on the standard in Section 18-802 of the Delaware LLC Act, that it was not "reasonably practicable" to carry on the business of the LLC...
Congratulations Are In Order for Delaware's Chief Justice
Posted on January 14, 2009The publication called Ethisphere recently announced its list of the top 100 most influential people in business ethics, and among those included was Delaware Supreme Court Chief Justice Myron Steele "for his leadership of the court that charts the course of corporate governance...
The Strange World of Civil Contempt
Posted on January 14, 2009The Wall Street Journal Law Blog has a post here about the bizarre world of civil contempt, and in particular refers to the sad tale of a former lawyer imprisoned just over the Delaware state line in Pennsylvania for the last 14 years due to a "civil contempt" finding.
Delaware Decision Imposes Penalties for Spoliation of Evidence
Posted on January 13, 2009Kevin Brady is a well-respected Delaware litigator and a nationally-recognized e-discovery expert. We are pleased to have his summary of a recent Delaware decision that addresses key issues of great import to all litigators. In Micron Technology, Inc...
Chancery Denies Costs for Cancelled Deposition
Posted on January 12, 2009Case Financial, Inc. v. Alden, (Del. Ch., Dec. 16, 2008), read opinion here. This Chancery Court decision is in a category of those that I like to refer to as "useful tools for the toolbox of a litigator." In this letter decision, the court rejected a request to order costs or fees pursuant to Rule 30(g) in light of the absence of a subpoena sent in connection with the notice of a deposition, and the failure of the deponent to appear--causing wasted costs for out of town counsel to fly in...
Chancery Retains Jurisdiction Over Claims to Pierce Corporate Veil and Related Allegations
Posted on January 11, 2009In Winner Acceptance Corp. v. Return of Capital Corp., (Del. Ch., Dec. 23, 2008), read 44-page opinion here, the Chancery Court decided that it had equitable jurisdiction (where it raised the issue sua sponte), over whether the allegations in this case were within its limited parameters...
Chancery Approves Settlement in Back-dating Case
Posted on January 10, 2009In Ryan v. Gifford, 2008 Del. Ch. LEXIS 1 (Jan. 2, 2009), the Chancery Court approved a settlement and awarded a substantial sum for attorneys' fees in this deriviative case involving claims of backdated options. Several prior decisions in this case by the Chancery Court were previously highlighted on this blog here.
E-Discovery Rulings--2008 in Review
Posted on January 09, 2009Here is an article from Law.com that provides an overview of key court rulings during 2008 in the extremely important area of e-discovery (a/k/a EDD).
Selected Key Corporate and Commercial Delaware Decisions in 2008
Posted on January 08, 2009My annual review of selected key corporate and commercial Delaware decisions in 2008 is here. The Delaware Law Weekly published it in its current issue. (Due to its length, this week only Part I appeared and next week the second half of the article will be published...
Chancery Orders Second Deposition on Documents Produced After First Deposition
Posted on January 08, 2009In Christen v. Trados, Inc., 2008 Del. Ch. LEXIS 179, the Chancery Court ,in a letter decision, decided that a second deposition of key persons had to be taken based on documents produced after their first deposition was concluded. However the court declined, in its discretion, to award costs pursuant to Rule 37.
Chancery Finds Lack of Equitable Jurisdiction After Trial
Posted on January 08, 2009In Brown v. Rembert, 2008 Del. Ch. LEXIS 180 (Dec. 11, 2008), the Chancery Court was presented with a motion on the eve of trial that raised the issue of whether the claims were within the court's limited jurisdiction. This detailed post-trial opinion explains why the claims for breach of fiduciary duty related to the use of a Power of Attorney, between a formerly married couple, must be presented to the Delaware Family Court, and therefore, cannot be adjudicated in Chancery Court...
Chancery Upholds Merger Netting Zero to Common Shareholders
Posted on January 08, 2009Hokanson v. Petty, 2008 Del Ch. LEXIS 182 (Dec. 10, 2008). This Chancery Court decision could have dismissed claims on a statute of limitations basis alone, but also addressed the merits. One notable aspect of the court's analysis was the it upheld a decision of a board with a majority of independent members that followed a contractually mandated formula for the sale of the company...
Chancery Describes Limited Costs Included in Rule 54(d) Award
Posted on January 08, 2009In Tanyous v. Happy Child World, Inc., (Del Ch., Dec. 19, 2008), the Chancery Court described the very limited scope of "costs" included under Rule 54(g) to the victor after trial. For example, "costs", as that term is defined by the court, in this context does not cover deposition transcripts or trial transcripts, nor does it include the cost of a translator...
Chancery Approves Class Action Settlement of Claims Of Inadequate Disclosure in Tender Offer
Posted on January 08, 2009MARIE RAYMOND REVOCABLE TRUST v. MAT FIVE LLC, (Del. Ch., Dec. 19, 2008), read opinion here. The Chancery Court in this 39-page decision approved a class action settlement regarding claims of inadequate disclosure in a tender offer. Included in the opinion is the court's exercise of its own business judgment in connection with approving the settlement--especially in light of the severe financial crisis in the world markets that serves as the backdrop for the transactions involved...
Chancery Rejects Request to Appoint Custodian
Posted on January 05, 2009Klamka v. OneSource Technologies, Inc., (Del. Ch., Dec. 15, 2008), is a decision that may be limited to its unusual procedural and factual posture, but it applies a key statute, so I include a reference to it. The pro se plaintiff sought a default judgment on its claim for the appointment of a custodian pursuant to DGCL Section 226(a)(3)...
Top 5 Delaware Cases from 2008--Rebuttal to Professor Brown
Posted on January 02, 2009Last year, I replied to Professor J. Robert Brown's list of the top 5 Delaware cases that, in his view, supported his negative perspective of Delaware law that remains the constant refrain on his blog called: The Race to the Bottom...
Happy New Year
Posted on December 31, 2008Best wishes to all my loyal readers for a happy and healthy New Year! The last year gave me much to be thankful for, and I hope 2009 is a great one for all of you (and for me).
Chancery Court Rules in Favor of Bank of New York Mellon Regarding Realogy Corporation Refinancing
Posted on December 28, 2008The Bank of New York Mellon v. Realogy Corp., (Del. Ch., Dec. 18, 2008), read opinion here. This Chancery Court decision in favor of The Bank of New York Mellon ("BNYM"), involved contract interpretation of various documents in connection with an attempt to refinance...
The Madoff Litigation Update
Posted on December 26, 2008Kevin LaCroix of The D & O Diary provides a very useful update of the lawsuits that have been filed to date involving the Bernie Madoff ponzi scheme that is estimated to have caused billions of dollars in losses. The defendants include "feeder firms" such as other hedge funds who gave Madoff money--and the accounting firms that audited those feeder firms...
Chancery Court Rules on Business Break-up Issues and Decides Oral Resignation of Director is Effective
Posted on December 22, 2008pIn emGeneral Video Corp. v. Kertesz,/emnbsp;emet al.,/em 2008 Del Ch. LEXIS 181 (Dec. 17, 2008), the Delaware Chancery Courtnbsp; addresses issues of practical importance to anyonenbsp;interested in the sundry issues that always arisenbsp;in connection with the quot;break-upquot; of a closely-held business...
Chancery Distinguishes Between Promise and Condition in Contract to Deny Indemnification Claim
Posted on December 21, 2008pIn emTravelCenters of America LLC v. Brog,/emnbsp; (Del. Ch., Dec. 5, 2008), read opinion a href="http://courts.state.de.us/opinions/(ytf05e45y0zg1kjiprfa0x55)/download.aspx?ID=114740"here,/a the Chancery Court denied a claim for indemnificationnbsp;based on the argument that the provisionsnbsp;ofnbsp;the parties' LLCnbsp;agreement...
Fiduciary Duty Claims Survive Motion to Dismiss, But Not Disclosure Claims
Posted on December 21, 2008pemBrinckerhoff v. Texas Easternnbsp;Products Pipeline Company, LLC ,nbsp;/em (Del. Ch., Nov. 25, 2008), read opinion a href="http://courts.state.de.us/opinions/(f13zbcjisng4j134yamj54ak)/download.aspx?ID=114430"here/a. In this decision, the Chancery Court denied a motion to dismiss based onnbsp;Rule 12(b)(6), in connection with anbsp;fiduciary duty claim against certain directors...
Chancery Distinguishes Contract-Based and Common Law-Based Fiduciary Duty Voluntarily Assumed
Posted on December 21, 2008pemIn re: Cencom Cable Income Partners, L.P. Litigation, (/emDel. Ch., Nov. 26, 2008), read opinion a href="http://courts.state.de.us/opinions/(f13zbcjisng4j134yamj54ak)/download.aspx?ID=114540"here/a./p pThis Chancery Courtnbsp; decision deniednbsp; in part and granted in part Defendantsrsquo; motions for summary judgment involving issues of fiduciary duty and candor...
Chancery Interprets LLC Agreement that Modifes Fiduciary Duties
Posted on December 19, 2008Kahn v. Portnoy, (Del. Ch., Dec. 11, 2008), read opinion here. This Chancery Court opinion deals with the important concept of the ability to modify fiduciary duties in an LLC agreement. In this derivative case involving an LLC, the LLC agreement's modification of fiduciary duties was not clear enough to choose one reasonable interpretation over another at the summary judgment stage...
Chancery Rules on Duties of Trustee
Posted on December 18, 2008pIn emGilmore v. Gilmore/em, (Del. Ch., Dec. 3, 2008), read opinion a href="http://courts.state.de.us/opinions/(f13zbcjisng4j134yamj54ak)/download.aspx?ID=114600"here/a, the Delawarenbsp;Chancery Court, innbsp; a short letter decision, addresses the fiduciary duties of the trustee of a trust...
Delaware Supreme Court Polices Trial Practices of Prosecutors
Posted on December 17, 2008pemHardy v. State/em, (Del. Supr., Dec. 9, 2008), read opinion a href="http://courts.state.de.us/opinions/(bfhuo2asokjqliaa4lbaghm5)/download.aspx?ID=114780"here./anbsp;Why, one might ask, is a criminal decision on this business litigation blog? This decision is relevantnbsp;to this blognbsp;to the extent it demonstrates how the Delaware Supreme Court polices, on appeal,nbsp;the conduct of lawyers at trial, in connection with itsnbsp;consideration of trial issues during appellate review...
Chancery Court Compels Arbitration
Posted on December 15, 2008Aveta, Inc. v. Bengoa, (Del. Ch., Dec. 11, 2008), read opinion here. Hat tip to Delaware Business Litigation Report. This Chancery Court opinion is an example of a common type of case in Chancery where the court orders that the parties abide by an agreement to arbitrate disputes instead of litigating them...
Proposed Class Action Settlement Rejected by Chancery Court
Posted on December 13, 2008In Off v. Ross, et al., (Del. Ch., Nov. 26, 2008), read opinion here, the Delaware Chancery Court rejected a proposed class action settlement (and related request for attorneys' fees), in a derivative and putative class action that challenged the fiduciary duties of the Board of Trustees of a Delaware statutory trust...
Delaware Chancery Court Trials and Hearings Available Live Online
Posted on December 12, 2008Several selected upcoming Chancery Court trials or hearings will be available live for your online viewing and listening pleasure via www.courtroomlive.com next week. I expect to have video clips with excerpts in the near future...
Chancery Finds Lack of Support for Heightened Standard for Mandatory Injunction but Allows Expedited Proceedings
Posted on December 12, 2008In Alpha Natural Resources, Inc. v. Cliff’s Natural Resources, Inc., (Del. Ch., November 6, 2008), read opinion here, the Chancery Court observed that in addition to the conventional prerequisites that must be satisfied before a “prohibitory preliminary injunction” will issue, when a “mandatory injunction” is requested, seeking affirmative corrective or remedial action to be taken, it: “requires, in addition, a showing that the petitioner is entitled as a matter of law to the relief it seeks based on undisputed facts...
Chancery Rules Alleged Settlement Agreement Not Enforceable
Posted on December 11, 2008In Delaware Dept. of Educ. v. Doe, (Del. Ch., Nov. 21, 2008), read opinion here, the Chancery Court was presented with the issue of whether a purported settlement agreement was binding in light of an issue about whether the negotiating attorneys had the authority of their clients to bind them to the terms of the alleged settlement agreement...
Delaware Corporate Governance--Views from the Bench
Posted on December 10, 2008At the International Corporate Governance Network seminar at the Hotel duPont in Wilmington, Delaware, an extraordinary event took place this morning. A majority of the members of the Delaware Supreme Court and the Delaware Chancery Court constituted one panel that took questions from the audience of about 300 corporate governance experts from corporate lawyers and related players in the corporate governance arena...
Chancery Stays Discovery Pending Motion for Judgment on the Pleadings
Posted on December 10, 2008TravelCenters of America LLC v. Brog, (Del. Ch., Nov. 21, 2008), read opinion here. The Chancery Court issued two prior opinions in this case, one of which was especially noteworthy, and both were summarized here. In this letter ruling, the court discussed the discretionary factors applied by the court in deciding whether to stay discovery pending a potentially dispositive motion...
Delaware Supreme Court Upholds Delaware Tax on Ford Motor Company
Posted on December 09, 2008In Ford Motor Company v. Department of Revenue, (Del. Supr., Dec. 8, 2008), read opinion here, the Delaware Supreme Court upheld the imposition of a Delaware tax on certain sales by Ford in the State of Delaware. (One might observe that Ford has not had much good news lately)...
Decisions on Bears Stearns; Wachovia and Wells Fargo
Posted on December 07, 2008Thanks to Mack Sperling of the North Carolina Business Litigation Report, we have a very recent decision by a New York Court, applying Delaware law, holding that the business judgment rule was satisfied in the "fire sale" [my words] of Bear Stearns to JP Morgan...
Delaware IP and Markman Matters
Posted on December 05, 2008Lee Thomason is a lawyer-reader of this blog and often comments on my posts. He has authored an article about a recent decision by the U.S. District Court for the District of Delaware on patent-related procedural issues involving Markman hearings and the like, that can be found here.
Supreme Court Reverses Appraisal Opinion
Posted on December 02, 2008In Crescent/Mach I Partners L.P. v. Dr. Pepper Bottling Co. of Texas, (Del. Supr., December 1, 2008), read opinion here, the Delaware Supreme Court (in a rare occurrence) reversed the Chancery Court on a procedurally unusual basis in an appraisal case that was previously highlighted on this blog here...
Video Clips of Chancery Court Trial in Olson v. Halvorsen
Posted on December 02, 2008Olson v. Halvorsen is a Chancery Court case which is being tried before Vice Chancellor Lamb. Two video/audio clips of parts of the recent first week of the trial are available here and here, courtesy of www.courtroomlive.com --and they are also making "a live feed" available for the continuation of the trial through this week...
Supreme Court Addresses Issue of Immorality
Posted on December 02, 2008In Lehto v. Board of Education of the Caesar Rodney School District, (Del. Supr., Dec. 2, 2008), read opinion here, the Delaware Supreme Court addressed the issue of immorality in connection with upholding the dismissal of a school teacher based on what was described as immoral conduct primarily engaged in by the teacher outside of the classroom, but with a nexus to the teacher's role in both the school and the community in general...
KPMG Advancement Case in NY Grinds to a Halt
Posted on December 01, 2008Advancement of legal fees under DGCL Section 145 is a quintessentially Delaware legal topic that has been the subject of 39 different posts over the last four years on this blog, (see list of posts here), either based on summarizing Delaware opinions on the issue or referring to discussions by others of recent developments...
Chancery Denies Reargument on Decision Rejecting Request for Receiver
Posted on December 01, 2008In re Dow Chem. Int'l, 2008 Del. Ch. LEXIS 169 (Nov. 18, 2008), read opinion here. In this case, the Delaware Chancery Court rejected a motion for reargument of a prior decision, summarized here, that had rejected a request for the appointment of a receiver for a dissolved corporation--that had been dissolved for many years...
Chancery Rejects Jurisdiction Over Compensation Claim
Posted on December 01, 2008In Testa v. Nixon Uniform Co., (Del. Ch., Nov. 18, 2008), the Chancery Court rejected an argument that it had equitable or other jurisdiction over a claim that in essence, was for a form of compensation but importantly that compensation claim did not give the departing employee any right to stock, despite an effort to use DGCL Section 111 for that purpose...
Ribstein on Corporate Governance and Rubin at Citigroup, Inc.
Posted on November 30, 2008Professor Larry Ribstein ponders here in a thought-provoking post about the corporate governance implications of a former Treasury Secretary such as Robert Rubin who, as a sophisticated and very highly paid member of the board of Citigroup, Inc., either did not see or did not take action to avoid his company's exposure to the economic tidal wave that led to the recent near-demise of the gargantuan financial institution known in some circles simply as Citi...
Lawyers and The Holy See
Posted on November 26, 2008Professor Stephen Bainbridge, one of the country's foremost scholars of corporate law, and often cited in the decisions of the Delaware courts, has penned a thoughtful post about another law professor who has been mentioned as a potential new ambassador to the Holy See...
Twitter for Business Litigation Lawyers
Posted on November 23, 2008This is intended as short reflection piece, so I'll ask for your indulgence to the extent this is "off topic", but since this is a Sunday afternoon, a little reflection is in order. Twitter is a free online tool that is increasingly used by "Internet-savvy" lawyers who do business litigation, and others, to keep in touch with other lawyers and friends, as well as clients and family...
Chancery Denied Reargument on Attorneys' Fees
Posted on November 20, 2008In Postorivo v. AG Paintball Holdings, Inc., 2008 Del. Ch. LEXIS 165 (Nov. 13, 2008), the Delaware Chancery Court denied reargument of a prior award of attorneys' fees that limited the total amount payable. For more factual background, I refer you to my summaries of the three (3) prior decisions in this case that are available here.
Chancery Court Vacates Prior Decision in Fiduciary Duty Case
Posted on November 20, 2008In Stephenson v. Cooke, (Del. Ch., Oct. 29, 2008), the Delaware Chancery Court vacated a 30-page decision summarized here, in an unusual ruling that apparently was based in part on a condition of a settlement between the parties involved. Read the Court's one-page letter decision here.
Chancery Court Upholds Forum Selection and Choice of Law Clauses; Rejects Promissory Estoppel Claim; and Finds Absence of Essential Elements of Contract
Posted on November 19, 2008In Greetham v. Sogima L-A Manager, LLC, et al., 2008 Del. Ch. LEXIS (Nov. 3, 2008), read opinion here, the Delaware Chancery Court addressed three legal issues that are of substantial practical importance in many corporate and commercial litigation cases, and the court's rulings are also useful tools for the toolbox of those who labor in the fields of business litigation...
Video Clips of Recent AIG Chancery Court Hearing
Posted on November 17, 2008For your viewing and listening pleasure (for those who might enjoy watching a live hearing in Delaware Chancery Court via your desktop), I provide access to two short video clips of a recent hearing in the Delaware Chancery Court on the AIG case, courtesy of www...
Chancery Rules on Statutory Trust Issues Involving Cargill and Refco
Posted on November 16, 2008In Cargill, Inc. v. JWH Special Circumstance, LLC, (Del. Ch., Nov. 7, 2008), read opinion here, the Delaware Chancery Court issued a 68-page decision involving a Delaware statutory trust (formerly referred to as a business trust), and found that common law fiduciary duties would apply to a trustee as a "default rule" in light of the agreement among the parties being silent on the issue...
Chancery Revises eFiling Order for Confidential Documents
Posted on November 16, 2008The Chancery Court issued a Standing Order dated Nov. 12, 2008, here, that supersedes an Order dated Oct. 6, 2008, relating to eFiling of Confidential Documents, so as to ensure their confidentiality in connection with other parts of the file that might otherwise be available online via LexisNexis.
Blogging for Lawyers
Posted on November 14, 2008Kevin LaCroix, the famed author of The D & O Diary, a must-read for those who want to keep abreast of developments in the field of director and officer liability coverage, was on a panel with me at a presentation yesterday that we gave, entitled: Blogging for Lawyers, in connection with a two-day seminar sponsored by The Pennsylvania Bar Institute...
Chancery Rules on Claims Related to Merrill Lynch Merger with Bank of America
Posted on November 11, 2008County of York Employees Retirement Plan v. Merrill Lynch & Co., Inc., et al., (Del. Ch., Oct. 28, 2008), read opinion here. This 39-page Chancery Court decision addressed in a cursory but scholarly manner, several preliminary issues related to the recently announced merger of Merrill Lynch and Bank of America...
This Blog Cited in Recent Law Review Article
Posted on November 11, 2008It may not rival the type of history made in this country last week, but it's still "a first". This blog was cited in a recent law review article for the first time that I know about. The article by Prof. Christopher M. Bruner is titled: The Enduring Ambivalence of Corporate Law, 59 Ala...
Supreme Court Denies Claim Against Landowner Based on Premises Guest Statute
Posted on November 10, 2008Berns v. Doan, (Del. Supr., Nov. 10, 2008), read opinion here, is a decision of the Delaware Supreme Court in which it was determined that the Premises Guest Statute barred the personal injury claim by a trespasser, as opposed to a public invitee, on another's property...
Delaware's Corporate Opportunity Doctrine
Posted on November 09, 2008Professor Bainbridge has written an essay on Delaware's Corporate Opportunity Doctrine. Here is the link to the essay and a short blurb on it.
Chancery Court Trial on Viking Global Hedge Fund Available Live Online
Posted on November 07, 2008Olson v. Halvorsen. This Delaware Chancery Court decision about the hedge fund called Viking Global, was summarized here last week and held that the statute of frauds applied to the LLC Agreement in that case. Now, the trial in that case is scheduled for Monday and is available via an online video/audio live feed on www...
Chancery Court Trial in Viking Global Hedge Fund Case Available Live Online
Posted on November 07, 2008Olson v. Halvorsen. This Delaware Chancery Court decision about the hedge fund called Viking Global, was summarized here last week and held that the statute of frauds applied to the LLC Agreement in that case. Now, the trial in that case is scheduled for Monday and is available via an online video/audio live feed on www...
AIG Hearing Tomorrow in Chancery Court Available Online
Posted on November 06, 2008In Re American International Group (AIG) Derivative Litigation. A Chancery Court hearing in this matter tomorrow, Nov. 7, 2008, before Vice Chancellor Strine, is available for your viewing pleasure online via your computer through www...
Top 100
Posted on November 05, 2008I just noticed that my blog was listed in the top 100 of Justia.com's Most Popular Blawgs of All Time based on the number of visits to this blog (blawg) from the BlawgSearch search engine and directory listing pages. Here is the list.
Summary Judgment Granted On Earnout Provisions of Merger Agreement
Posted on November 03, 2008Comet Systems, Inc. v. Miva, Inc., (Del. Ch., Oct. 22, 2008), read opinion here. This Chancery Court opinion involves the interpretation of an earnout provision and a change-of-control bonus in a merger agreement. The Court's own introductory overview of the the factual background and the issue addressed is the most efficient means to summarize this case and it will also allow the reader to determine if it sparks enough interest to download the whole decision at the above link...
Chancery Rules that LLC Agreement is Subject to Statute of Frauds, in Issue of First Impression
Posted on October 28, 2008Olson v. Halvorsen, (Del. Ch., Oct. 22, 2008), read opinion here. The Chancery Court decided an issue of first impression in the context of cross motions for summary judgment in this case: Does the statute of frauds apply to an LLC Agreement. The answer is yes...
Chancery Recites Prerequisites for Preliminary Injunction and Enjoins Arbitration of Claims
Posted on October 27, 2008In HDS Investment Holding, Inc. v. The Home Depot, Inc., (Del. Ch., Oct. 17, 2008), read opinion here, the Chancery Court (for the second time in about a week in two unrelated cases), decided that the agreement between the parties required the court to decide certain contractual issues, and enjoined an attempt by one of the parties to have those issues decided pursuant to an arbitration clause...
Chancery Enjoins Arbitration and Denies Both Interlocutory Appeal and Stay Pending Appeal
Posted on October 27, 2008In TowerHill Wealth Management, LLC v. The Bander Family Partnership, L.P., (Del. Ch., Oct. 9, 2008), read opinion here, the Chancery Court enjoined the defendant from pursuing arbitration of claims that the court determined should be litigated in Chancery...
Chancery Grants Motion To Intervene in Contested Stock Issuance Case
Posted on October 27, 2008Noe v. Kropf, 2008 Del. Ch. LEXIS 148 (Oct. 15, 2008), is a Chancery Court decision that discusses the factors under Chancery Court Rule 24 applicable to a motion to intervene. This case involved a shareholder who sought to intervene because the original plaintiff was requesting from the Court a declaration that the stock owned by the intervenor and issued by a contested board was void...
Chancery Rejects Request to Appoint Receiver of Dissolved Corp. Pursuant to DGCL Section 279
Posted on October 27, 2008In the Matter of Dow Chem. Int'l Inc. of Delaware, 2008 Del. Ch. LEXIS 147 (Oct. 14, 2008). The Chancery Court in this opinion rejected a request to appoint a receiver for a dissolved corporation pursuant to Section 279, primarily in light of the company having been dissolved 20 years ago and not having any assets...
Biden and Delaware Corporate Law
Posted on October 25, 2008Victoria McGrane wrote a timely story yesterday on Politico.com here about the impact on "business friendly Delaware" if Biden wins the VP position. Of course, part of that discussion involves what impact, if any, he would have if he wins, on the ongoing tug-of-war between state and federal control of corporate governance...
Mechanic's Lien Statute Strictly Construed in Delaware
Posted on October 24, 2008In King Construction, Inc. v. Plaza Four Realty, LLC, (Del. Super., Sept. 29, 2008), read opinion here, the Delaware Superior Court strictly construed the Delaware Mechanic's Lien statute and dismissed the efforts of a subcontractor to file a mechanic's lien based on non-compliance with the statute, such as the following: (i) failure to obtain written consent of the owner of the property before performing work for the tenant on leased premises; and (ii) not waiting until all work was completed before filing the mechanic's lien for amounts due (which date must be asserted in the court pleadings)...
Supreme Court Upholds Limitations on Relief Due to Unclean Hands
Posted on October 22, 2008In Reserves Development LLC v. Severn Savings Bank, FSB, (Del. Supr., Oct. 21, 2008), read opinion here, the Delaware Supreme Court upheld a decision of the Chancery Court to grant only partial interim injunctive relief to a joint venture partner in a real estate development "gone bad" ...
Court Rejects Claim by Lowest Bidder Who Did Not Receive Public Contract
Posted on October 20, 2008Danvir Corp. v. City of Wilmington, (Del. Ch., Oct. 6, 2008), read opinion here , is a Chancery Court decision that denied injunctive relief requested by the lowest bidder on a public contract awarded by the City of Wilmington. Although the facts of this case involve some aspects that are peculiar to the City of Wilmington and its charter, there are several general principles recognized by the Court that may be applicable more generally to contests in connection with many types of bids awarded by public entities for public projects...
Chancery Stays Discovery Pending Dispositive Motion
Posted on October 20, 2008Ford Motor Company v. Drive America Holdings, Inc., 2008 Del. Ch., LEXIS 146 (Oct. 8, 2008), read opinion here. This Chancery Court decision applies the usual factors to conclude that discovery should be stayed pending the outcome of a motion to dismiss...
Mozart's Cosi' Fan Tutte
Posted on October 19, 2008Off topic post? Maybe, but here is the point. On the way to the office on this glorious Sunday afternoon, I was listening to the above-referenced opera and thinking about a common translation of its Italian title: "That's the way women are"...
Chancery Decides Important Electronic Discovery Issues and Conventional Discovery Issues
Posted on October 19, 2008Kinexus Representative LLC v. Advent Software, Inc. (Del. Ch., Sept. 22, 2008), read opinion here. In this Chancery Court decision, that decided cross motions to compel discovery, the Court addressed important and practical issues involving electronic discovery and what the Court will accept as satisfactory responses to both interrogatories and requests for documents...
Chancery Applies "Walks Like a Duck" Test for Equity Jurisdiction; and Rejects Alleged Insolvency of Defendant as Hook to Invoke Equitable Jurisdiction
Posted on October 19, 2008Hillsboro Energy, LLC v. Secure Energy, Inc., (Del. Ch., Oct. 3, 2008), read opinion here. The introductory paragraph of the opinion provides the best overview of the case: This case exemplifies the old adage: If it walks like a duck, and quacks like duck, it’s probably a duck...
Chancery Grants Renewed Motion to Stay
Posted on October 18, 2008Sprint Nextel Corp. v. iPCS, Inc. (Del. Ch., Oct. 8, 2008), read opinion here. This Chancery Court decision involved a renewed Motion to Stay this Delaware case by defendants in favor of a concurrent action in Illinois. This motion was filed on Sept. 16, 2008 immediately after a decision by the judge in the companion case in Illinois denying a Motion to Dismiss those Illinois proceedings...
Expert Testimony Restricted as Untimely
Posted on October 18, 2008Stone v. Stant, 2008 Del. Ch. LEXIS 138 (Del. Ch., Oct. 2, 2008), read opinion here, The Chancery Court in this case applied Rule 26(e)(1)(B) to bar the admission of portions of the testimony of an expert that were not within the scope of the expert's report...
Chancery Applies Collateral Estoppel; Issue Preclusion; Comity as well as Full Faith and Credit
Posted on October 18, 2008The Thomas and Agnes Carvel Foundation v. Carvel, 2008 Del. Ch. LEXIS 142 (Sept. 30, 2008), read opinion here. This Chancery Court decision has a factual background that spans 20 years and includes related litigation in other states and other countries...
Chancery Addresses Issue of What Constitutes Fiduciary Relationship
Posted on October 17, 2008Stephenson v. Cooke, Del. Ch., C.A. No. 3110-VCL (Sept. 24, 2008). In this 30-page Chancery Court decision, which is by necessity very factually intensive, the Chancery Court reasoned that a fiduciary relationship did not exist between two close friends, where one had relied extensively on the other to assist with financial affairs...
Summary Judgment Denied Due to Need for More Discovery
Posted on October 17, 2008Whittington v. Dragon Group, L.L.C., (Del. Ch., Sept. 30, 2008), read opinion here. [The opinion refers to several prior Chancery Court decisions in this case for more factual background, one of which was summarized on this blog here.] In this latest iteration of this long-running intra-family dispute, the Court denies a Motion for Summary Judgment, finding genuinely disputed issues of material fact in the following four categories that were discussed at length in this 22-page opinion: 1) The date when a cause of action for violation of a Settlement Agreement arose, such as to trigger the commencement of the limitations in Section 8106 of Title 8 of the Delaware Code (which provides for a 20-year statute of limitations for documents “under seal” as opposed to the conventional 3-year statute of limitations for other contracts); 2) Whether there were mitigating circumstances that would warrant tolling the statute of limitations based on equitable principles and the length of time, if any, for which the statute should be tolled; 3) Whether in view of the claims for injunctive relief and specific performance, the delay in filing this action was unreasonable (see doctrine of laches); and 4) Whether the defendant suffered material prejudice due to the failure to file this action until July 2006...
Chancery Denies Injunctive Relief on Real Estate Restrictive Covenant
Posted on October 15, 2008Swann Keys Civic Association v. Shamp, 2008 Del. Ch. LEXIS 140 (Sept. 29, 2008), read opinion here. In this post-trial decision involving a restrictive covenant that purported to limit the height of homes in a waterfront community in Sussex County, Delaware, the Chancery Court denied a request for a preliminary injunction for the removal of homes that allegedly exceeded the height limit...
Will Current Financial Crisis Lead to Federalization of Corporate Law Governed Now By Delaware?
Posted on October 13, 2008The National Law Journal's article today by Marcia Coyle, titled "Delaware Courts in Crosshairs", here, describes the perennial risk that Congress will respond to popular pressure and try to find a federal regulatory solution to the most recent round of problems now facing corporate America...
Delaware v. New York on Dissolution of LLCs
Posted on October 13, 2008In Re Seneca Investments, LLC, 2008 WL 4329230 (Del. Ch., Sept. 23, 2008), is a Delaware Chancery Court decision about the unsuccessful attempt to petition the court for the dissolution of an LLC, that I summarized briefly here...
Delaware Supreme Court Interprets "License" and "Assignment" in Patent Agreements
Posted on October 13, 2008In Motorola Inc. v. Amkor Technology, Inc., (Del. Supr., Oct. 8, 2008), read opinion here, the Delaware Supreme Court interpreted patent agreements that turned on an interpretation of the meanings in the context of those agreements, of the words "license" and "assignment"...
There is No Affirmative Action for Minorities, Shareholder and Otherwise, in Corporate Law
Posted on October 12, 2008The title of this post is the title of an article just published by Professor Bainbridge that is a critique of a work that addresses minority shareholder rights in corporations. Here is the link.
Dissolution of Corporation Request Denied
Posted on October 11, 2008Weir v. JMACK, Inc., (Del. Ch., Sept. 23, 2008), read opinion here. This Chancery Court decision denied a request for dissolution of a corporation and is another example of the factually intensive aspect of such a request and why it is not necessarily always predictable whether such a request will be granted to appoint a receiver and dissolve a solvent corporation--even if co-owners of a company, for example, are "stuck in a loveless marriage" in a business context...
The 24th Annual F.G. Pileggi Distinguished Lecturer In Law
Posted on October 10, 2008The 24th Annual F.G. Pileggi Distinguished Lecture in Law, sponsored by The Delaware Journal of Corporate Law, the lead law review of Delaware's Widener University School of Law, was presented today by Professor Eric Talley, a visiting professor this year at Harvard Law School...
The 24th Annual F.G. Pileggi Distinguished Lecture In Law
Posted on October 10, 2008The 24th Annual F.G. Pileggi Distinguished Lecture in Law, sponsored by The Delaware Journal of Corporate Law, the lead law review of Delaware's Widener University School of Law, was presented today by Professor Eric Talley, a visiting professor this year at Harvard Law School...
LLC Member Sues Accountant After Dissolution For Helping Other Member
Posted on October 09, 2008Peter Mahler on his New York Business Divorce Blog, here, discusses a New York case that involves a claim by an LLC member against the accountant of a Delaware LLC that was the subject of a dissolution proceeding in the Delaware Chancery Court. The Chancery Court case settled but one member later claimed that the LLC's accountant impermissibly help the other member in the dissolution proceeding...
Delaware's Non-Corporate Law
Posted on October 09, 2008Professor Bainbridge comments here on a recent editorial in The Wall Street Journal about the alleged impact that Sen. Biden has had on an apparent influx of asbestos cases in Delaware. I think the WSJ has it wrong as numerous surveys and studies have shown...
TRO Request Denied and Motion to Stay Granted, Re: Merger of PFF Bancorp
Posted on October 08, 2008In Kahn v. Kevin McCarthy, et al., (Del. Ch., Sept. 24, 2008), read letter opinion here, the Delaware Chancery Court denied a request for a TRO in connection with a bank merger, and rejected the argument that the shareholders should be allowed to wait for the rescue from the federal government's $700 billion "rescue legislation" proposed by Treasury Secretary Paulson (that was not approved yet at the time of the TRO application)...
Sedona Conference Promotes Cooperation in Discovery
Posted on October 07, 2008Here is a "Cooperation Proclamation" by The Sedona Conference, regarding the discovery phase of litigation, that also has been signed on to by a number of judges around the country. The Sedona Conference is a "thought leader" on litigation topics, including in the area of electronic discovery (EDD) or the discovery of electronically stored information (ESI)...
Old Delaware Decision on Fiduciary Duty Examined
Posted on October 06, 2008Professor Bainbridge examines the old(er) Delaware Chancery Court decision of Baron v. Allied Artists Pictures Corp., 337 A.2d 653 (Del. Ch. 1975), app. dismissed, 365 A.2d 136 (Del. 1976), and wonders, here, if the fiduciary duty and business judgment rule issues in the case would be decided the same way today
Legal Issues Raised in Citibank-Wachovia-Wells Fargo Threesome
Posted on October 05, 2008Professor Ribstein here and Professor Bainbridge here, discuss the legal issues involved in the three-way dispute between Citibank; Wachovia and Wells Fargo, and whether the Citibank-Wachovia deal can be specifically enforced despite WF's higher later bid...
Ethics Column: New York Court Upholds Binding Arbitration Clause in Fee Agreement
Posted on October 05, 2008The latest article for my regular ethics column that will be published in the upcoming issue of The Bencher, the national publication of The American Inns of Court, is here. It describes a recent New York decision that upheld a binding arbitration clause in a fee agreement between a law firm and a client.
Chancery Court Procedures for eFiling Confidential Documents
Posted on October 05, 2008The Court of Chancery issued a Standing Order, effective October 10, 2008, available here, that addresses the more secure handling of confidential documents eFiled with the court.
Vice Chancellor Leo Strine, Jr.
Posted on October 04, 2008Vice Chancellor Leo Strine, Jr. of the Delaware Chancery Court is the subject of a lengthy article published here on The Harvard Law School Corporate Governance Blog. For anyone appearing before His Honor or just interested in learning about his background before he ascended to the bench, as well as a few highlights of his last 10 years on the bench--and more about this leading figure in corporate law, it is must reading.
Governance of Delaware LLCs
Posted on October 02, 2008Bloomberg Law Reports just published an article I co-wrote titled: Benefits of Being a Delaware Company and Recent Developments in the Governance of LLCs. The citation is Vol. 2, No. 33 of the Bloomberg Law Reports (August 18, 2008). Here is a copy...
Chancery Requires Apollo-backed Hexion to Fulfill Its Contractual Duty to Buy Hunstman Despite Material Adverse Effect Clause
Posted on September 30, 2008In Hexion Specialty Chemicals, Inc. v. Huntsman Corp., (Del. Ch., Sept. 29, 2008), read opinion here, the Delaware Chancery Court rejected the arguments of Hexion, which is 92% owned by private equity group Apollo, that it should be relieved of its contractual obligations to buy 100% of Huntsman's stock based on a July 2007 agreement that was valued at $10...
Chancery Denies Dissolution Request Per Section 18-802 of the Delaware LLC Act and Per DGCL Section 226(a)(3)
Posted on September 29, 2008In Re Seneca Investments LLC, 2008 WL 4329230 (Del. Ch., Sept. 23, 2008). The Chancery Court in this opinion, on a motion for judgment on the pleadings under Rule 12(c), "puts meat on the bones" of Section 18-802 of the Delaware LLC Act, which is the provision that allows a member of an LLC to petition for dissolution when it "is not reasonably practicable [as compared to practical ] to carry on the business in conformity with the Operating Agreement"...
Partnership Law Clashes with Politically Incorrect Views
Posted on September 29, 2008Here is a thought-provoking post by Professor Bainbridge about the partnership law issues that were raised when a partner at the Orrick firm had the audacity to exercise his personal views which apparently were too politically incorrect for one of his other partners, who found it necessary to send an email around the firm to express his outrage at the firm being affiliated with someone who had politically incorrect views...
Chancery Court Reforms Terms of a Control Transaction In Loral Space and Communications Matter, Based on Breach of Fiduciary Duties
Posted on September 28, 2008The Delaware Chancery Court, in the case of In Re Loral Space and Commications Inc. Consolidated Litigation, 2008 WL 4293781 (Del. Ch., Sept. 19, 2008), provides a reminder that the Delaware courts do not hesitate to uphold fiduciary duties and impose consequences on directors who do not abide by their obligations...
Bankruptcy Court in Delaware Rejects Claim for Advancement Under Delaware Law After Claim Removed to Federal Court
Posted on September 26, 2008Street v. The End of The Road Trust, et al., (D. Del., Bankr., Sept. 17, 2008), read opinion here. Thanks to Delaware lawyer David Finger for bringing this decision to my attention. A quote from the court's opinion highlighted the issues addressed: There are a number of basic propositions in Delaware corporate cases that are helpful in clarifying the distinction between (1) indemnification and advancement, and (2) a mandatory advancement and discretionary advancement, with the former constituting an enhanced benefit to an indemnitee...
Member of Chancery Court Pens New Article on Delaware Corporate Law v. Federal Law
Posted on September 23, 2008The current issue of The Business Lawyer arrived in the mail today and with it the most recent article published by a member of the prolific Delaware Chancery Court. The citation to the article is: Leo E. Strine, Jr., Breaking the Corporate Governance Logjam in Washington: Some Constructive Thoughts on a Responsible Path Forward, 63 Bus...
Supreme Court Accepts Interlocutory Appeal in Ryan Case
Posted on September 23, 2008In Lyondell Chemical Co. v. Ryan, (Del., Sept. 15, 2008), read Order here, the Delaware Supreme Court accepted an interlocutory appeal pursuant to Supreme Court Rule 42, despite the Chancery Court's denial of the same request presented to it in the first instance for such a discretionary appeal of the trial court's denial of a summary judgment motion...
New Rule of Evidence 502 Addresses Attorney/Client Privilege; Work-Product and Waiver
Posted on September 23, 2008Courtesy of Mark Herrmann on his Drug and Device Law blog, here is an excellent summary and commentary on the new Federal Rule of Evidence 502 that was signed into law by the President a few days ago, and even has application in some manner to state court cases...
Chancery Denies Summary Judgment on Claim of Breach of Good Faith and Fair Dealing Due To Factual Issue Regarding Missed Deadline
Posted on September 21, 2008In Amirsaleh v. Board of Trade of New York City, Inc., 2008 WL 4182998 (Del. Ch., Sept. 11, 2008), the Chancery Court explored the contours and the content of the implied duty of good faith and fair dealing that is imposed on every contract governed by Delaware law...
Chancery Stays Dissolution Action Pending Superior Court Damages Case
Posted on September 21, 2008In the case of In Re TGM Enterprises, LLC , 2008 WL 4261035 (Del.Ch., Sept. 12, 2008), the Chancery Court stayed a case before it seeking dissolution of an LLC in favor of a later-filed suit in Delaware Superior Court that sought money damages and other purely legal remedies involving the same members of the LLC before it on the dissolution matter...
Chancery Court Addresses Limited Scope of Its Subject Matter Jurisdiction
Posted on September 21, 2008In Medek v. Medek, 2008 WL 4261017 (Del. Ch., Sept. 10, 2008), the Delaware Chancery Court described in great detail the limited scope of its subject matter jurisdiction, based in the distinction between the courts of equity as they were separated in "merry old England" compared to what were described as the "law courts"...
Limited Discovery Allowed For Objectors to Class Action Settlement
Posted on September 21, 2008In the Chancery Court case of In re Countrywide Corp. S'hldrs Litig., 2008 WL 4173839 (Del. Ch., Sept. 10, 2008), the objectors to a proposed class action settlement were allowed limited discovery. One of the arguments of the objectors was that the directors that may have been personally liable on the derivative claims had personal motives for agreeing to a merger that may have allowed them to escape liability...
Chancellor Chandler Goes to Georgia
Posted on September 18, 2008Usha Rodrigues on The Conglomerate blog here recounts a recent visit by Chancellor William Chandler to Georgia where he taught a short Advanced Corporations course. She includes some quotes from His Honor that provide insight into his views of Delaware corporate law.
Revlon Duties Not Triggered in All Sales
Posted on September 18, 2008Prof. Stephen Bainbridge supplements here his post of yesterday (here) in which he provides a short treatise on the Delaware Supreme Court's decision in Revlon, and its progeny. A tasty morsel from his most recent analysis, referring to the recent Ryan decision by Vice Chancellor Noble, is excerpted below: In my opinion, however, if Noble means to say that every sale of a corporation triggers “Revlon duties” in the sense that enhanced scrutiny applies to the board’s conduct of every sale, I believe he is wrong both as a matter of policy and doctrine...
The Boundaries of Revlon-Land
Posted on September 17, 2008Prof. Stephen Bainbridge provides a "mini-law review article" here, that examines the Delaware Supreme Court's decision in Revlon v. MacAndrews & Forbes Holdings, 506 A.2d 173 (Del.1985), and its progeny. The scholarly review of cases and commentary also describes, in light of the recent Ryan and Lear decisions of the Delaware Chancery Court, what types of factual situations should--and should not--trigger what is often referred to as "Revlon-duties" when a company is for sale, although even that label is subjected to close scrutiny in the treatment given to the topic...
AIG's Bailout
Posted on September 17, 2008Insurance law expert, Kevin LaCroix, on The D & O Diary, here, provides a lawyerly analysis of the issues raised in the government's $85 billion loan to AIG in return for a right to 79.9% of the company.
Constitution Day
Posted on September 17, 2008Today is Constitution Day in Delaware and I was pleased to be invited to give a presentation at the Delaware Technical and Community College on the recent Heller v. D.C. decision and related topics. Dean of Students, Dr. Regan Hicks-Goldstein, was kind enough to invite me to speak...
Proposed New Federal Rule of Evidence 502
Posted on September 17, 2008From the EDD Update blog, comes a post of interest to most litigators, that I quote in part as follows: Rule 502 Gets an Invite to the Whitehouse. Under a proposed federal rule of evidence, disclosure of privileged materials will not be a waiver of the privilege if, among other things, the disclosure is inadvertent...
Politically Incorrect Law Professor
Posted on September 17, 2008UCLA Law Professor Robert Sander wins this week's "Politically Incorrect Award". I get some contrarian glee from being politically incorrect when I can (and when it does not jeopardize my livelihood). Professor Sander studies the impact of affirmative action on law school graduates...
Electronic Discovery Lesson: Waiver of Attorney/Client Privilege and Non-Core Work Product for Attorney Interviews with Custodians to Establish that Failure to Preserve ESI Was Inadvertent
Posted on September 16, 2008In re Intel Corp. Microprocessor Antitrust Litigation, 2008 WL 2310288 (D.Del. 2008), read opinion here. This is an opinion that should be read by anyone who wants to, or needs to, keep up to date on electronic discovery (EDD) pitfalls (read: all business litigators)...
The 100 Most Influential People in Corporate Governance
Posted on September 15, 2008Directorship magazine has published its second annual list of the most influential people in boardrooms and in corporate governance. Those that made the Top 100 list include: Delaware Supreme Court Chief Justice Myron Steele; Chancellor William Chandler and Vice Chancellor Leo Strine of the Delaware Chancery Court, as well as Corporate Law Professor Stephen Bainbridge...
Lehman Brothers Bankruptcy Filing
Posted on September 15, 2008Steve Jakubowksi's Bankruptcy Litigation Blog here, has a characteristically erudite analysis about the Lehman Brothers bankruptcy filing today, with links to actual documents filed in the case. I have to believe that part of the case will eventually involve claims against the officers and directors for their role in this "epic mess"...
Advancement Granted For Fees Incurred in Defamation Action
Posted on September 14, 2008In Duthie v. CorSolutions Medical, Inc., 2008 WL 4173850 (Sept. 10, 2008), the Delaware Chancery Court addressed three issues in a case in which it had previously ordered advancement. Are the plaintiffs entitled to advancement of fees incurred in affirmatively asserting defamation claims regarding statements made in connection with the litigation about which the initial advancement suit was filed? Were plaintiffs entitled to fees for securing parallel counsel to "get up to speed on the file" in case of a potential conflict (that never materialized)? Are various fees for which advancement has been sought reasonable? The court's answer to the first and second question is yes...
Fees of $953/Hour Awarded Based on Corporate Benefit Conferred
Posted on September 14, 2008In Berger v. Pubco Corp., 2008 WL 4173860 (Sept. 8. 2008), the Delaware Chancery Court addressed the amount of attorneys' fees to be awarded to plaintiff's attorneys whose litigation efforts resulted in a "corporate benefit". Like its "cousin: common fund", corporate benefit is one of the doctrines that allows the court to award attorneys' fees to plaintiffs' attorneys who bring derivative actions...
Case Dismissed--Lawyer Said He Did Not Receive Notice of Deadline
Posted on September 14, 2008It was reported that a federal judge in Allentown, PA, dismissed a case because no reply was filed to a motion to dismiss. According to the article (sorry, no link available), the court sent a filing deadline notice by email, but the lawyer did not receive the notice of the deadline--apparently due to his email spam filter...
Supreme Court Clarifies Writs of Certiorari Procedures and Policy
Posted on September 14, 2008In Maddrey v. Justice of the Peace Court 13, (Del. Supr., Sept. 5, 2008), read opinion here, the Delaware Supreme Court provides a "Guide for Practitioners" on Writs of Certiorari. Although the High Court's scholarly treatment of this somewhat arcane--but practical and necessary--topic, is more thorough than I can cover in this short post, a helpful reminder for business litigators is that when a landlord is attempting to evict a tenant for non-payment of rent, called a "summary possession" proceeding in Delaware, the Justice of the Peace Courts have exclusive jurisdiction over such actions...
Injunction Denied In Attempt to Stop Self-Storage Facility Auction
Posted on September 12, 2008In McAllen v. Reybold Venture Group, 2008 WL 4152689 (Del. Ch., Aug. 28, 2008), the Delaware Chancery thoughtfully denied a pro se petition for a TRO to stop an auction sale of property held in a self-storage unit. Under Title 25, Section 4901, et seq...
Derivative Suit Against AIG Settled
Posted on September 12, 2008Teachers' Retirement System of Louisiana v. Greenberg, is a derivative suit against AIG and its key officers, including former CEO Hank Greenberg. It was scheduled to go to trial on Monday, Sept. 15 but reportedly has just settled...
Yahoo's Severance Plans and Delaware Corporate Law
Posted on June 12, 2008Here is a review of specific aspects of Delaware corporate law by Prof. Stephen Bainbridge as applied to recently enacted severance plans by Yahoo in connection with Microsoft's recent takeover attempts, including a discussion of whether those plans should be treated as "dead hand pills"...
Uncorporate Governance
Posted on June 11, 2008Prof. Larry Ribstein, one of the nation's leading authorities on LLCs and other alternative entities, writes here on The Harvard Law School Corporate Governance Blog. His introductory paragraphs include the following excerpt:By uncorporate I mean partnership-type business associations (i...
Chancery Addresses Requirements for Contract "Under Seal" to Enjoy Longer Statute of Limitations
Posted on June 10, 2008Whittington v. Dragon Group LLC, 2008 WL 2316305 (Del. Ch., June 6, 2008), read opinion here. This opinion addresses issues against the backdrop of sibling warfare (in the form of business litigation). The key issues addressed by the court were:1) describing the requirements in Delaware for a contract (other than a mortgage or promissory note), to be considered "under seal" such that the longer 20-year statute of limitations would apply as compared to the conventional 3-year statute;2) laches as a defense and juxtaposed with the applicable statute of limitations and when the cause of action accrued;3) Also notable was the reference in the opinion to prior decisions in this case in which the court found enforceable a settlement agreement that contemplated other ancillary "agreements within the agreement"...
Chancery Interprets Anti-SLAPP Statute
Posted on June 10, 2008In Nichols v. Lewis, 2008 WL 2253192 (Del Ch., May 29, 2008), read opinion here, the Chancery Court addressed the following issues in this opinion involving a developer who bought a farm but encountered unexpected troubles regarding the seller's duty to cooperate in post-closing matters:1) Delaware's version of the Anti-SLAPP statute (typically relating to suits by developers against local residents who oppose a particular development), and its permissive attorneys' fee-shifting provision;2) "Apparent authority" and agency law in connection with family relationships;3) Motion to Dismiss standards in light of "notice pleading" rules, along with the opportunity for amendments to the complaint; and4) Enforcement of "cooperation clauses" and "affiliates clauses" in agreements.
Chancery Rules on Breach of Loyalty by General Partner of L.P.
Posted on June 06, 2008In Venhill Limited Partnership v. Hillman, 2008 WL 2270488 (Del. Ch., June 3, 2008), read opinion here, the Chancery Court addressed egregious breaches of the duty of loyalty by the general partner of a limited partnership whose assets were derived from various trusts that were used to keep afloat a failing business the general partner ran...
Can Yahoo "Just Say No" to Microsoft?
Posted on June 04, 2008Prof. Bainbridge is skeptical that Delaware cases provide a sound basis for the "just say no" defense, and here is his analysis of Delaware court decisions on the topic along with reference to his prior writings.
Professors Smith and Bainbridge Opine on the Delaware Corporate Issues Regarding the Ongoing Microsoft v. Yahoo Contest
Posted on June 03, 2008Prof. Gordon Smith here and Prof. Stephen Bainbridge here, regale us with a scholarly analysis of the Delaware corporate law issues involved with the pending Chancery Court lawsuit by shareholders against Yahoo in connection with Microsoft's apparently continuing courtship...
Chancery Grants "Quasi-Appraisal" Remedy for Breach of Section 253 Short-Form Merger Requirements
Posted on June 02, 2008In Berger v. Pubco Corp., 2008 WL 2224107 (Del. Ch., May 30, 2008), read opinion here, the Delaware Chancery Court fashioned a "quasi-appraisal" remedy due to a breach of the statutorily mandated requirements of a short-form merger under DGCL Section 253, as well as for breach of the duty to make necessary disclosures...
Chancery Explains Why Special Litigation Committee Report Was Rejected
Posted on June 01, 2008In Sutherland v. Sutherland, 2008 WL 2221770 (Del. Ch., May 29, 2008), read opinion here, the Delaware Chancery Court denied a motion to reargue its May 5 decision, pursuant to Chancery Rule 59(f), in which it rejected the report of a one-person Special Litigation Committee (SLC)...
Supreme Court Affirms Stock Option Claims As Derivative
Posted on May 30, 2008In Feldman v. Cutaia, (Del. Supr., May 30, 2008), read opinion here, the Delaware Supreme Court today affirmed the Chancery Court's ruling that, based on the facts before it, a stock option-related claim was a derivative cause of action and not a direct claim...
Chancery Court Reviews Corporate Issues Involving Sultan of Brunei
Posted on May 29, 2008In Zaman v. Amedeo Holdings, Inc., 2008 WL 2168397 (Del. Ch., May 23, 2008), read opinion here, the Delaware Chancery Court reviews corporate issues involving the ultra-rich Sultan of Brunei, and the London barristers of his brother, but more importantly for the readers of this blog, the court analyzes the barristers' claims for advancement and indemnification as well as "fees on fees"...
Bylaws and Delaware Law
Posted on May 28, 2008Professor Bainbridge has a post here that reviews recent Delaware decisional law and statutes concerning bylaws. His post is more like a mini-law review article and it includes a scholarly analysis that addresses limitations on who can amend bylaws as well as how they may or may not restrict the board's powers.
Illinois Court Determines Delaware Law Allows Piercing LLC's "Corporate Veil"
Posted on May 27, 2008Westmeyer v. Flynn, 2008 WL 2152498 (Ill.App. 1 Dist.), May 20, 2008). Courtesy of famed Chicago bankruptcy lawyer Steve Jakubowski, this decision by the Appellate Court of Illinois, First District, Second Division, read opinion here, determined that Delaware law would recognize the concept of piercing the corporate veil in the context of an LLC...
Court Cannot Choose Between Two Reasonable Interpretations on a Motion to Dismiss
Posted on May 25, 2008In Monier, Inc. v. Boral Lifetile, Inc., (Del. Ch., May 13, 2008), read letter opinion here, the Chancery Court relied on prior precedent to hold that on a Motion to Dismiss under Rule 12(b)(6), it could not choose between two (or more) reasonable interpretations of an Operating Agreement...
Supreme Court Interprets Contractual Rights to Stock Options After Merger
Posted on May 23, 2008AT & T Corp. v. Lillis, (Del. Supr., May 22, 2008), read opinion here. The Delaware Supreme Court in this 34-page opinion reiterates basic contract interpretation principles under Delaware law in the context of stock option rights, including in what instances extrinsic evidence will be considered by the court...
Lord Conrad Black Back in Delaware Chancery Court
Posted on May 22, 2008In Sun Times v. Black, oral argument will be heard on Friday morning, May 23, 2008 in Delaware Chancery Court at 10 a.m. I am trying to determine if I can obtain a video clip to put on my blog if the Court will allow the argument to be broadcast live over the Internet via www...
More Good News For Lawyers Who Blog
Posted on May 22, 2008Kevin O'Keefe, the nation's leading guru on blogs for lawyers, included a reference to me in a post today about creating an "online presence" here that almost made me blush. The excerpt graciously allowed that:Francis Pileggi has made himself a brand name in the area of Delaware corporate litigation through his blog...
Smith v. Van Gorkom Revisited
Posted on May 17, 2008Smith v. Van Gorkom, a Delaware Supreme Court decision of seminal importance regarding corporate governance and fiduciary duties, issued in 1985, is the subject of an article with the same name from Prof. Stephen Bainbridge. Here is the good professor's overview of his article:Smith v...
Motion To Amend Complaint for Second Time Granted
Posted on May 17, 2008NACCO Industries, Inc. and HB-PS Holding Co., Inc. v. Applica Inc., (Del. Ch., May 7, 2008), read opinion here. The facts of this case involve a complaint that was initially amended once after a motion to dismiss was filed but prior to the opening brief...
CEO Compensation and Corporate Governance
Posted on May 15, 2008Kevin LaCroix on his D & O Diary reports here on recent studies that he highlights as follows:Excessive CEO pay remains a widely perceived marker for poor corporate governance and even for securities litigation risk. But recent scholarly analysis of senior corporate executive compensation suggests that outsized CEO pay may not only indicated weak governance, but may also be associated with company underperformance...
Ribstein and Bainbridge on Shareholder Activism
Posted on May 15, 2008Prof. Ribstein comments here on a recent article by Professor Bainbridge entitled: Investor Activism: Reshaping the Playing Field? Excerpts from Ribstein's overview of the article follow:In this paper he announces that directors should have less power and that we should have more shareholder activism...
Landlord's Rights Trump Free Speech Rights
Posted on May 15, 2008896 ASSOCIATES, LLC v. GILLESPIE, (Del. Ch., April 22, 2008), read opinion here. This opinion would be of interest to landlords who have multiple tenants. The Chancery Court upheld the landlord's right to prevent distribution of pamphlets on the premises...
New Edition of Seminal Treatise on Business Valuation
Posted on May 13, 2008Most corporate lawyers recognize the name Shannon Pratt as the author of several seminal and widely cited treatises on the valuation of businesses. He is in the process of publishing a new edition of The Lawyer's Business Valuation Handbook, which should be available by the summer...
New Authoritative Book on Corporate Governance
Posted on May 13, 2008Professor Stephen Bainbridge has just published yet another book on corporate law. His most recent publication is entitled: The New Corporate Governance in Theory and PracticeThe summary on Amazon.com here (where it can be pre-ordered for delivery in about 6 weeks), describes the book as follows:Forty years ago, managerialism dominated corporate governance...
New Mandatory ADR Rule in Delaware Superior Court
Posted on May 13, 2008The Delaware Superior Court has adopted a new rule regarding mandatory ADR. One may read a copy of new rule here.
Chancery Gives Victory to "Freedom of Contract" and Refuses to "Find" Fiduciary Duties in LLC Agreement When Not Clearly Stated
Posted on May 09, 2008Fisk Ventures, LLC v. Segal, 2008 WL 1961156 (Del. Ch., May 7, 2008), read opinion here. This Chancery Court opinion, I predict, will be cited often by scholars and practitioners alike as part of the ongoing discussion about the difference between applying fiduciary duty concepts to LLCs--or not--as compared with the conventional application of those duties in the corporate context...
Chancery Rejects Claims that Directors Breached Fiduciary Duties to Creditors by Company Filing for Chapter 11 Bankruptcy; Excessive Compensation Claims Also Rejected
Posted on May 09, 2008Nelson v. Emerson, 2008 WL 1961150 (Del. Ch., May 6, 2008), read opinion here. This Chancery Court decision provides a cornucopia of useful and important statements of Delaware law for those lawyers whose practice overlaps corporate governance and creditors' rights, including bankruptcy proceedings...
Chancery Denies Motion to Dismiss Despite Recommendation of Special Litigation Committee
Posted on May 08, 2008Sutherland v. Sutherland, 2008 WL 1932374 (Del. Ch., May 5, 2008), read opinion here. [This is one of four opinions issued on May 5 by the Chancery Court, two of which were written by the same vice-chancellor. I hope to post on the other 3 opinions issued on May 5 by tomorrow...
Chancery Denies Motion to Dismiss Despite Recommendation of Special Litigation Committee
Posted on May 07, 2008Sutherland v. Sutherland, 2008 WL 1932374 (Del. Ch., May 5, 2008), read opinion here. [This is one of four opinions issued on May 5 by the Chancery Court, two of which were written by the same vice-chancellor. I hope to post on the other 3 opinions issued on May 5 by tomorrow...
Delaware Leads in Race for LLCs
Posted on May 07, 2008Prof. Bill Sjostrom on Truth on the Market Blog posts about an article on SSRN that provides an empirical study which concludes that among those LLCs formed outside the state of their principal place of business, more LLCs choose Delaware to form their LLC in, with suggested reasons why...
Chancery Applies "Course of Performance" and "Quasi-Estoppel" in Contract Dispute
Posted on May 07, 2008Personnel Decisions, Inc. v. Business Planning Systems, Inc., 2008 WL 1932404 (Del. Ch., May 5, 2008), read opinion here. This Chancery Court decision is 15 pages long in the Westlaw format which usually is the equivalent of over 40 pages in the original slip opinion format...
Custodian of Condominium Association Discharged
Posted on May 07, 2008In the Matter of Burnbrae Maintenance Association, 2008 WL 1952166 (Del. Ch., May 5, 2008), read opinion here. This is an example of the broad variety of cases that the Chancery Court handles on occasion. This case involves a custodian that was appointed to oversee a condominium association and who now seeks to be discharged and have his fees paid, relying on Section 226 of Title 8 of the Delaware Code.
Chancery Addresses Adverse Possession Issues
Posted on May 07, 2008Del-Chapel Associates v. Conectiv, 2008 WL 1934503 (Del. Ch., May 5, 2008), read opinion here.The Chancery Court decided issues of adverse possession and those instances where trespass occurs when the scope of a license is exceeded by one's actions...
Ribstein and Bainbridge on Yahoo and Microsoft
Posted on May 06, 2008Prof. Bainbridge analyzes here the applicable standard under Delaware corporate law that would apply to the defensive measures taken by Yahoo to spurn the advances of Microsoft. He explains why the case of Blasius v. Atlas Corp. would not apply. Blasius imposes a heightened standard of review when the shareholder franchise is interfered with by the board...
Chancery Clarifies and Admonishes: eFiling Passwords for Delaware Lawyers Only
Posted on May 06, 2008The Delaware Chancery Court issued a clarification yesterday to lawyers in order to clarify that passwords for eFilings of pleadings and other submissions with the Court are only to be used by Delaware lawyers and shall not be "lent to" (my words) or shared with non-Delaware lawyers, nor shall non-Delaware lawyers be added to the "electronic service list" through which those who eFile documents with the court are sent notice of eFilings by other lawyers in the case...
Leading Experts Propose Changes to Delaware Corporate Law
Posted on May 06, 2008An all-day seminar yesterday at Widener University Law School featured leading members of the judiciary as well as practitioners and academics who proposed changes to Delaware corporate law on (or about) the 40th anniversary of the last major overhaul of the Delaware General Corporation Law in 1967 (although minor updates have been made each year since then...
Chancery Denies Demand for Books and Records by Limited Partner
Posted on May 04, 2008Madison Real Estate Immobilien-Anlagegesellschaft Beschrankt Haftende Kg v. Kanam USA XIX Ltd. Partnership, 2008 WL 1913237 (Del.Ch., May 01, 2008), read opinion here. (Yes, that is the correct spelling of the unusual and long case name.) Before I address the substantive parts of the opinion, allow me three brief introductory comments about this recent Chancery Court decision involving the denial, after trial, of a demand by a limited partner for books and records of a limited partnership...
Attorneys' Fee Request Carefully Examined--and Approved
Posted on May 04, 2008Weichert Co. of PA v. Young, 2008 WL 1914309 (Del. Ch., May 1, 2008), read opinion here. In this Chancery Court decision the court reviews objections to a fee application pursuant to a fee shifting provision in an agreement. The pro se defendant lost the argument that he violated his covenant not to compete...
Guest Contributor to Harvard Corporate Governance Blog
Posted on May 02, 2008The Harvard Law School Corporate Governance Blog has graciously added my name to their masthead as a "Guest Contributor", in light of the several prior posts I have written on their blog, as well as one that will appear shortly based on my summary I posted here of a recent Delaware opinion applying Caremark principles to an officer (as opposed to a director) of a company.
Chancery Court's Policy on Public Access to Documents
Posted on May 02, 2008Here is the formal policy announced today for public access to administrative records of the Delaware Court of Chancery.
Discovery of Special Litigation Committee Documents Compelled
Posted on April 30, 2008In Young v. Klaassan, (Del. Ch., April 25, 2008), read opinion here, the Chancery Court granted a motion to compel discovery of the documents that a special litigation committee relied on, and because the defendant referred to the committee's finding in its motion to dismiss...
Chancery Provides Practical Guidance on "Inadvertent Waiver of Attorney/Client Privilege" and "Avoiding a Motion to Compel"
Posted on April 29, 2008In re Kent County Adequate Public Facilities Ordinances Litigation Consolidated, (Del. Ch., April 18, 2008), read opinion here.The purpose of this post is to provide excerpts on discovery issues listed in the title above that every business litigator will encounter from time to time, and in those instances this decision will be a useful reference...
Justice Scalia's New Book on "How to Persuade Judges"
Posted on April 28, 2008Here is an article from Law.com about the interview last night on 60 Minutes, of U.S Supreme Court Justice Antonin Scalia, the first full-scale broadcast interview he has ever given since he became a SCOTUS justice 22 years ago. In my view he is the best writer of anyone on the High Court ...
Delaware General Corporation Law in the 21st Century Symposium
Posted on April 27, 2008On May 5th, Widener University School of Law in collaboration with Corporation Service Company (CSC) will be hosting a one day, interactive symposium which looks at The Delaware General Corporation Law (DGCL) in the 21st Century. The symposium aims to provide a forum to generate the best current thinking on how the DGCL needs to be modified to respond to or anticipate changes in markets and technology as the century unfolds...
Survey Says: Delaware Courts Are Number 1 Again
Posted on April 23, 2008The U.S. Chamber of Commerce released its annual survey of the legal systems of the 50 states according to corporate lawyers who were polled, and for the 7th year in a row, the Delaware court system retained its number 1 ranking among the states in most categories...
S.D.N.Y. Applies Delaware Law to Dismiss Suit Based on Ruling that Pre-Suit Demand Not Excused
Posted on April 23, 2008In re Morgan Stanley Derivative Litigation, No. 05 Civ. 6515 (S.D.N.Y. Mar. 27, 2008). The U.S. District Court for the Southern District of New York applied Delaware law to dismiss a derivative suit in this case based on the failure to establish that pre-suit demand was excused...
Advice to Directors Based on Delaware Law
Posted on April 20, 2008Here is a link via the Harvard Corporate Governance Law Blog to a memo by the Wachtell Lipton firm that provides wide-ranging suggestions to directors based on Delaware fiduciary duty case law, along with practical commentary that in some respects is akin to business advice on best practices for boards of directors to follow.
Chancery Decides Issue of First Impression: Nomination of Directors is Part of Right to Elect Directors
Posted on April 17, 2008Levitt Corp. v. Office Depot, Inc., 2008 WL 1724244 ( Del. Ch., April 14, 2008), read opinion here. The Delaware Chancery Court was presented in this case with differing interpretations of an "advance notice bylaw" and the argument by Office Depot that Levitt did not comply with the requirements of the bylaw in connection with Levitt's attempt to nominate new directors to the board in connection with a self-funded proxy contest...
Delaware Chancery Court Interprets Lease Under D.C. Law
Posted on April 17, 2008Liberty Property Limited Partnership v. 25 Massachusetts Avenue Property LLC, (Del. Ch., April 7, 2008), read opinion here. Even though the focus of this blog is on business litigation cases that apply Delaware law, I include this recent decision that applies the law of the District of Columbia because this 50-page opinion provides insight into how the Chancery Court might approach a similar type of issue under Delaware law...
Welcome to the United States, Holy Father
Posted on April 15, 2008Regardless of one's religious persuasion or disinclination, I think that the visit starting today of His Holiness Pope Benedict XVI is an occasion for celebrating hope for all that is good and can be good about mankind, and for promoting peace and goodwill among all people...
Attorneys' Fees Granted for Therapeutic Disclosures, et al.
Posted on April 14, 2008Helaba Invest Kapitalanlagegesellschaft mbH v. Fialkow, 2008 WL 1128721 (Del. Ch., April 11, 2008), read opinion here. [Yes, that is a long and unusual case name. No, it is not a typo.] The Delaware Chancery Court decided an issue in this case that is usually of great interest to both lawyers and clients alike: attorneys' fees awarded by the court...
Chancery Applies Adage that "Silence is Golden" and Rules that Warrantholders are Not Owed Fiduciary Duties but Corporation Still Subject to Fraud Claims for Dissembling With Incomplete Data
Posted on April 14, 2008In Corporate Property Associates 14 Inc. v. CHR Holding Corp., 2008 WL 963048 (Del.Ch., April 10, 2008), read opinion here, the court denied a Motion to Dismiss fraud and negligent misrepresentation claims against a company for disclosing misleadingly incomplete information to warrantholders that discouraged them from exercising their warrants just prior to a transaction that devalued them--even though the court held that they were not owed fiduciary duties...
Choice of NY Forum Clause Upheld But Delaware Procedural and Remedial Law Still Applies
Posted on April 14, 2008Smartmatic Corp. v. SVS Holdings, Inc. and Sequoia Voting Systems, Inc.,(Del. Ch., April 4, 2008), read opinion here. This letter opinion involved the application of New York law to multiple disputes surrounding a stock purchase agreement. Because this blog focuses on Delaware law, the only point I want to highlight in this 24-page decision is a footnote that reiterates basic Delaware law to the effect that forum clauses are generally upheld, but even as here where the law of another state is applied to the substantive dispute, Delaware procedural and remedial law will still govern...
Court Imposes Caremark Fiduciary Duty on Corporate Officer (as compared to Director)
Posted on April 13, 2008In Miller v. McDonald, et al., ( D. Del., Bankr., April 9, 2008), read opinion here, the Bankruptcy Court for the District of Delaware decided an issue of great importance to those who follow corporate governance issues related to the fiduciary duties of officers and directors...
Attorney Penalized for Not Keeping Current with Court Technology
Posted on April 12, 2008Courtesy of the Legal Profession Blog here is a story about an attorney who was penalized for not obtaining a login and password that were necessary in order to comply with the mandatory e-Filing requirements of a court in Kansas. So, all of us who may have started practicing law when some were still using a quill pen, can no longer argue that only the "younger lawyers" need to concern themselves with the various technological advances that are now such a large part of the practice of law.
Removing a Lis Pendens Based on Pending Litigation
Posted on April 11, 2008Nicastro v. Rudegeair, 2008 WL 979677 (Del. Ch., April 1, 2008), read opinion here. This is a one-page letter decision (with several footnote citations to cases law), which includes a helpful reference to the procedure necessary to remove a Notice of lis pendens filed pursuant to Section 1608 of Title 25 of the Delaware Code...
Bear Stears Delaware Litigation Stayed by Chancery Court
Posted on April 10, 2008In Re The Bear Stearns Company, Inc. Shareholder Litigation, (Del. Ch., April 9, 2008), read opinion here, (Hat Tip to Prof. Steve Davidoff). Yesterday the Delaware Chancery Court stayed the litigation in Delaware over the Bear Stearns imbroglio in favor of pending litigation in New York involving substantially the same issues and parties...
Bear Stearns Delaware Litigation Stayed by Chancery Court
Posted on April 10, 2008In Re The Bear Stearns Companies, Inc. Shareholder Litigation, (Del. Ch., April 9, 2008), read opinion here, (Hat Tip to Prof. Steve Davidoff). Yesterday the Delaware Chancery Court stayed the litigation in Delaware over the Bear Stearns imbroglio in favor of pending litigation in New York involving substantially the same issues and parties...
LLC Not Subject to Corporate Governance Standards of Corporations
Posted on April 09, 2008In TravelCenters of America, LLC. v. Brog, the Delaware Chancery Court, on April 4, 2008, issued a ruling from the bench, available here (HT Prof. Davidoff), after a short trial, that a notice of intent to nominate new members of the board of managers of the LLC did not comply with a provision of the LLC agreement, and was in violation of several U...
Court Rejects Bid Due To Use of Wrong Bond Form
Posted on April 09, 2008This case summary is provided courtesy of Carl Neff, a distinguished lawyer in the Wilmington, Delaware, office of our firm. In Asphalt Paving Systems, Inc. v. Department of Transportation, 2008 WL 852817 (Del. Ch., Mar. 20, 2008), read opinion here, the Delaware Chancery Court granted summary judgment in favor of the Delaware Department of Transportation (“DelDOT”)...
Books and Records Demand in the LLC Context
Posted on April 07, 2008In TravelCenters of America v. Brog, 2008 WL 868107 (Del.Ch., March 31, 2008) , read opinion here, the Delaware Chancery Court addressed issues relating to a demand for books and records of an LLC. The books and records claim was presented as a counterclaim in a suit that involved the issue of an advance bylaw notice...
Delaware Corporate Law Re-examined 40 Years Post-1967 Major Revision
Posted on April 07, 2008A veritable treasure trove arrived in today's mail inside the current issue of the Delaware Lawyer magazine. The issue is devoted to a re-examination of the Delaware General Corporation Law (DGCL) by assorted luminaries from Delaware as well as those from New York and elsewhere who spend more time in Delaware Chancery Court fighting about the nuances and meaning of the DGCL than many Delaware lawyers do...
Noncompetition/Covenant-Not-To-Compete Agreement Enforced
Posted on April 07, 2008In Concord Steel, Inc. v. Wilmington Steel Processing Co., Inc., 2008 WL 902406 (Del. Ch., April 3, 2008), read opinion here, the Chancery Court upheld the portion of an Asset Purchase Agreement (ASA) that prevented the seller from competing against the business it sold for 4 years...
Internal Affairs Doctrine Examined
Posted on April 07, 2008Professor Timothy Flynn of Seton Hall University highlights here on the Race to the Bottom blog, a new article he has written that examines the internal affairs doctrine, and in particular the 2005 decision of the Delaware Supreme Court called Vantage Point Venture Partners 1996 v...
Deposition Abuse
Posted on April 06, 2008In GMAC Bank v. HTFC, Inc., (E.D., Pa., 2008), read opinion here, a federal judge in neighboring Philadelphia imposed financial penalties on both the deponent and his lawyer for abusive conduct during a deposition. The blog called Above the Law highlights key factual aspects of the case here, such as the deponent "using the "F-bomb" and its variants 73 times"...
Deposition Abuse Penalized
Posted on April 06, 2008In GMAC Bank v. HTFC, Corp., (E.D., Pa., 2008), read opinion here, a federal judge in neighboring Philadelphia imposed financial penalties on both the deponent and his lawyer for abusive conduct during a deposition. The blog called Above the Law highlights key factual aspects of the case here, such as the deponent "using the "F-bomb" and its variants 73 times"...
New Chancery Court Order For Special Process Servers
Posted on April 06, 2008This post is only of practical value for those of us who file complaints in Chancery Court and need to have them served. The current practice is for the Court to grant a Motion to Appoint a Special Process Server, which often is one of the local messenger companies, which allows for quicker timing for the formal process of hand delivering a complaint to someone who has not agreed to accept "service of the complaint" without the formal procedure...
Ribstein on LLCs
Posted on April 05, 2008Prof. Larry Ribstein has literally "written the book" on LLCs and other "alternative forms of entities" and has also written many articles on the topic, in his role and one the nation's leading authorities on LLCs and other non-corporate forms of entities...
Chancery Addresses Advancement Claim in Context of Compulsory v. Permissive Counterclaim
Posted on April 05, 2008In Reinhard & Kreinberg v. The Dow Chemical Co., 2008 WL 868108 (Del. Ch., Mar. 28, 2008), read opinion here, the Chancery Court addressed the issue of advancement in the context of a counterclaim. The court determined that only compulsory counterclaims and not permissive counterclaims would be subject to advancement...
Delaware Corporate Law from the Judiciary's Viewpoint
Posted on April 04, 2008As a follow-up to my posts from yesterday, this is my last post from the two-day seminar at the Tulane Corporate Law Institute. One of the benefits for the 250 attendees at this New Orleans venue, is the further clarification and direction for corporate practitioners provided by members of the Delaware Chancery Court and Delaware Supreme Court who are on the panels at this seminar along with other leading lawyers from around the country who labor in the vineyards of Delaware corporate governance...
Delaware Corporate Law Update
Posted on April 03, 2008Members of the Delaware Chancery Court and the Delaware Supreme Court as well as leading corporate law practitioners from Delaware and around the country are here in New Orleans at the Tulane University Law School's 20th Annual Corporate Law Institute ...
Delaware Corporate Law and the Sale of Companies
Posted on April 03, 2008As a follow-up to the prior post earlier today from the Tulane corporate law seminar, Vice Chancellor Leo Strine, Jr., from Delaware's Chancery Court, is on the panel this afternoon along with other leading practitioners, discussing recent Delaware cases that address the duty of the board under Delaware law in the context of the sale process for a company...
"Fees on Fees" Limited By Proportionality in Advancement Matter
Posted on April 02, 2008In Schoon v. Troy Corp., (Del. Ch., March 28, 2008), read opinion here, the Delaware Chancery Court granted advancement rights to one of the plaintiffs, but denied it to the other, based primarily on the wording of the relevant bylaws as construed through the applicable statute and case law...
Chancery Court Going Private
Posted on April 01, 2008Here is a report by Prof. Gordon Smith on his Conglomerate blog about the privatization of Delaware's Chancery Court--but remember that today is April Fools Day. I forgot that when I commented on the post today on Professor Bainbridge's blog where he announced that he was just appointed by President Bush as the newest SEC commissioner...
Diller Wins Round One in Dispute with Liberty Media
Posted on April 01, 2008In Re IAC/InterActive Corp., (Del. Ch., March 28, 2008), read opinion here. Last Friday, the Chancery Court decided "round one" in a clash of the titans. I say "round one" because if I were a betting man I would predict that the dispute is not over between John Malone and Barry Diller in their pending litigation over the split of their companies...
Former Chancellor Allen on Corporate Governance and Delaware Corporate Law
Posted on March 31, 2008Willam Allen is the former Chancellor of the Delaware Court of Chancery, and is now the Director, NYU Center for Law & Business, Professor of Law and Clinical Professor of Business at New York University Law School. Professor Bainbridge highlights here, and provides a link to a new law review article the former Chancellor penned on modern corporate governance and Delaware corporate law...
SCOTUS Decides in Favor of First State: in New Jersey v. Delaware
Posted on March 31, 2008In New Jersey v. Delaware, case No. 134, (Orig.), the United States Supreme Court decided today, (read opinion here), that Delaware has the right, in essence, to veto a plan approved by New Jersey, for a company to build a liquefied natural gas (LNG) terminal that starts on the New Jersey side of the Delaware River (that forms the boundary between the two states), but which terminal proceeded over the boundary line, into Delaware State...
Delaware Supreme Court Affirms Class Action Settlement in Philly Stock Exchange Case
Posted on March 29, 2008In the Matter of the Philadelphia Stock Exchange, Inc., (Del. Supr., March 27, 2008), read opinion here, the Delaware Supreme Court (two days ago) affirmed the Chancery Court's decision to both approve the class action settlement in the case as well as upholding the trial court's bifurcation of the settlement proceedings to address an objector's argument that the settlement proceeds were not fairly distributed among the class members...
Self-Adulation Department
Posted on March 29, 2008A few months ago I was selected by Lexis/Nexis to have this blog included among their "top commercial blogs" for a new commercial law "homepage/portal" they created. Here is the link (see the drop-down menu at the bottom of the page at the foregoing link...
Fiduciary Duty Claims against Subprime Lender in Bankruptcy
Posted on March 27, 2008A recent report by an independent examiner for a trustee of subprime lender, New Century, in bankruptcy, has described in a 581-page report, various bases for causes of action against officers and directors for breach of fiduciary duty, as well as claims against their accounting firm KPMG in connection with, for example, publicly reporting profits of over $60 million for a given period, when in reality they should have reported a loss-- but the managment paid themselves very large bonuses based on the reported profits that were allegedly due to accounting errors...
Blogs at the AmLaw 200
Posted on March 27, 2008Kevin O'Keefe, the nation's leading expert on blogs for lawyers--and others--provides here his updated review of blogging amid the AmLaw 200 (the country's 200 largest firms). Changes since his last survey in August 2007 show that just over 25% of the group's firms (including my firm) generate a total of 110 blogs...
Full Panoply of Attorney/Client Relationship Benefits Not Enjoyed by Member of Class Action Plaintiff Group
Posted on March 25, 2008An article I wrote on the above topic for my regular ethics column here is in the March/April issue of The Bencher, a publication of the American Inns of Court.
New Law Review Article on "Corporate Religious Expresssion"
Posted on March 23, 2008Occupying an intriguing intersection among corporate law, constitutional law and religion, is the article by Julie Marie Baworowsky of Notre Dame Law School that appears at Notre Dame Law Review, Vol. 83, No. 4, 2008. Here is the abstract: Should corporate religious expression receive protection under the Fourteenth Amendment's Due Process Clause and under the First Amendment's Speech Clause? The article is available on SSRN here.
Background materials for 1967 Delaware General Corporation Law
Posted on March 23, 2008Professor Stephen Bainbridge highlights here, courtesy of Prof. Larry Hamermesh and the Law Library at the Widener University Law School, an online link to extensive background materials that led to the 1967 revisions to the Delaware General Corporation Law (DGCL)...
Corporate Governance and Sardinia
Posted on March 22, 2008What a great place for a seminar. Bill Bratton on the Conglomerate blog posts here about a corporate governance seminar on the Italian island of Sardinia, held in Cagliari, and hosted by the University of Cagliari, Vanderbilt University and the University of Amsterdam...
Blog Break
Posted on March 21, 2008In honor of Good Friday there will be no blog postings today.Also, a note to readers: I will be out of the office for the next week, so blogging will be lighter than usual over the next week or so.
Blog Rankings
Posted on March 20, 2008This month, your truly is listed here among the Top 100 Most Popular Blogs according to Justia.com's BlawgSearch. That plus $1.50 may get you a small soda somewhere, but it still feels good. However, I agree with the leading blog guru and iconic expert for bloggers, Kevin O'Keefe of LexBlog, that rankings of blogs are not very meaningful on an individual level, because the value of blogs is directly related to the niche that they serve...
Delaware Fiduciary Duties and the Bear Stearns Imbroglio
Posted on March 18, 2008Prof. Gordon Smith comments here on the "fire sale"(?) at $2 per share of Bear Stearns on Sunday night to JP Morgan, with apparent pressure from the U.S. Treasury Department and the Federal Reserve Bank [despite statements days earlier that the value of the stock was much, much higher], and the application to the situation of Delaware corporate law...
Should Members of the Delaware Bench be "Potted Plants"?
Posted on March 17, 2008Professor Stephen Bainbridge writes here in response to a criticism that some members of the Delaware Bench are too prolific in terms of the law review articles they author, as well as being too peripatetic in terms of the seminars in which they participate...
Chancery Addresses Issues in Bylaws and Intersection of Federal and State Regulation of Proxies for Annual Meetings
Posted on March 16, 2008In Jana Master Fund, Ltd. v. CNET Networks, Inc., 2008 WL 660556 (Del.Ch., Mar 13, 2008), read opinion here, the Delaware Chancery Court addressed issues relating to the application of SEC Rule 14a-8 and its relevance, or not, to notice and proxy provisions in CNET's bylaws...
Article on Chancery's Opinion in Sample v. Morgan
Posted on March 16, 2008The current issue of the ABA magazine Business Law Today features an article (starting on the back page) on the recent Delaware Chancery Court decision in Sample v. Morgan that I co-authored with Danielle Blount, an associate in our Wilmington office...
Ribstein on Ramseyer on Ringling
Posted on March 15, 2008Here is commentary by Professor Ribstein on the seminal case of Ringling Bros.-Barnum & Bailey Combined Shows v. Ringling, in connection with an article on the case by Professor Ramseyer.
Chancery Declines to Enforce Settlement Agreement among Rich and Famous
Posted on March 13, 2008In Yucaipa Corporate Initiatives Fund I, LP v. Follieri Group, L.L.C., 2008 WL 638273 (Del.Ch., Feb 27, 2008), the Delaware Chancery Court declined to grant a motion to enforce a settlement where the parties both admitted that there was a binding agreement and that one party was in material breach for not making a payment required under the agreement, as part of a settlement of the litigation...
Possible New Open Records Law in Delaware?
Posted on March 13, 2008Here is a link from the DelawarePolitics blog, to yesterday's press conference at Legislative Hall in Dover regarding proposed "open government" legislation in Delaware, that featured comments from the Communications and Policy Director for Pennsylvania's Senate Majority Leader (my big brother), who discussed the recent passage of an historic open records bill that was passed last month in Delaware's sister state...
Scholarly Commentary on the "Say on Pay" Executive Compensation Issue
Posted on March 13, 2008Here is a video clip of a presentation by Prof. Stephen Bainbridge (linked from his blog), on a recent panel moderated by Vice Chancellor Leo Strine, Jr. of the Delaware Chancery Court, in connection with Penn’s Institute of Law and Economics’ Chancery Court Program...
Pre-Suit Demand Excused in Stock Option Case
Posted on March 12, 2008In Weiss v. Swanson, 2008 WL 623324 (Del. Ch., March 7, 2008), read opinion here, the Chancery Court denies a motion to dismiss that asserted the failure to make pre-suit demand in a case alleging back-dating, bullet-dodging and spring-loading of stock options...
Chancery Imposes Fees for Bad Faith in Conducting Litigation
Posted on March 09, 2008In re SS & C Technologies, Inc., 2008 WL 612256 (Del. Ch., March 6, 2008), read opinion here. This decision is a rare occasion in which the Chancery Court imposes attorneys' fees in connection with what it viewed as bad faith conduct in the course of litigation (as opposed to the filing of the litigation) after a proposed settlement of a class action case was rejected by the court...
Chancery Imposes Same Fiduciary Duty on Officers as Directors
Posted on March 09, 2008Midland Grange No. 27 Patrons of Husbandry v. Walls, 2008 WL 616239 (Del. Ch., Feb. 28, 2008), read opinion here. This Delaware Chancery Court decision involves claims against officers of a fraternal non-profit organization for breach of fiduciary duty in connection with the transfer of property in alleged violation of the group's bylaws...
Qualcomm's eDiscovery Saga Continues
Posted on March 08, 2008Courtesy of The Wall Street Journal Law Blog here is a story about the recent decision from a federal court that allows the outside attorrneys for Qualcomm to be freed from the constraints of the attorney/client privilege, based on the self-defense exception, in connection with the ongoing imbroglio about who was responsible for the failure to produce relevant emails during discovery (which omission was not uncovered until the last part of the trial)...
Chancery Dismisses Derivative Claims for Failing Aronson and Rales Tests
Posted on March 06, 2008In Postorivo v. AG Paintball Holdings, Inc., 2008 WL 553205 (Del. Ch., Feb. 29, 2008), read opinion here, the Delaware Chancery Court addressed claims arising out of an Asset Purchase Agreement, pursued by a disgruntled buyer. The court dismissed the derivative claims based on the failure to establish demand futility as to board decisions under Aronson v...
eDelaware: New Service Offered by Potter Anderson & Corroon for Mobile Access to DGCL
Posted on March 05, 2008The venerable Wilmington, Delaware, law firm of Potter Anderson & Corroon has established a new, free service via their website called "eDelaware" that allows one to download the Delaware General Corporation Law (DGCL) to a Blackberry, as well as other DGCL-related materials, for easier access...
Supreme Court Upholds Chancery Decision that Stock Cancellation Not Effective
Posted on March 04, 2008In Reddy v. MKBS Company Limited, (Del. Supr., March 3, 2008), read opinion here, the Delaware Supreme Court (yesterday) affirmed a Chancery Court decision, summarized here, finding that an attempt to "cancel" shares, whether via the certificates representing those shares or the shares themselves, did not comply with statutory and related requirements...
FMLA and ADA Claims Rejected on Summary Judgement
Posted on March 04, 2008Courtesy of Fox lawyer Carl Neff, here is a summary of a recent decision by the U.S. District Court for the District of Delaware, granting summary judgment in favor of an employer against a plaintiff that made claims based on the ADA and FMLA...
Chancery Court at the Casinos: Issue of Indenture Default Addressed
Posted on March 03, 2008In Wilmington Trust Co., as indenture trustee, v. Tropicana Entertainment , LLC, (Del. Ch., Feb. 29, 2008), read opinion here, the Chancery Court ruled on cross-motions for summary judgment regarding the claim that the loss of a casino license was a default or caused a default under the terms of an indenture involving about one billion dollars of debt...
Warren Buffett's Annual Letter
Posted on March 03, 2008Courtesy of Kevin LaCroix on his D & O Diary blog, here is a link to the annual letter of Warren Buffett to his shareholders. As Kevin notes, it is a cult classic that provides an insight in "plain English" on the "state of the economy" and other current topics that are generally of interest to anyone interested in checking the pulse of the business world today.
The Most Important Corporate Law Case of 20th Century is_____?
Posted on March 03, 2008Corporate law titans, Professors Stephen Bainbridge and Larry Ribstein, discuss here and here, what court decision on corporate law each of them regards as the most important of the 20th Century. Prof. Brett McDonnell continues the discussion here.
Format and Substance of Special Litigation Committee Report Scrutinized
Posted on March 03, 2008In Sutherland v. Sutherland, 2008 WL 571253 (Del Ch., Feb. 2008), read opinion here, the Delaware Chancery Court examined the format and content of the report of a Special Litigation Committee (SLC) -- noting the paucity of citation to source documents, for example, and observed the inauspiciousness of the SLC being composed of only one person (which of course makes it a greater challenge for the SLC to establish its independence, good faith and reasonableness under the Zapata standard...
Should Delaware Be Concerned that Its Corporate Law Dominance Is Threatened?
Posted on March 02, 2008We have written periodically on these pages about the tension between the dominance in corporate law that Delaware enjoys and the risk that Federal law will continue to encroach on the field of corporate governance moreso than it has in the past...
Bankruptcy Court Flubs Limited Partnership Decision
Posted on March 01, 2008Prof. Larry Ribstein, the nation's leading authority on "alternative entiies" such as LLCs and LPs, flags a recent decision by a bankruptcy court in New York that misses the mark on an issue of liability of a limited partner in the context of a bankruptcy claim...
Bloggers at Big Law Firms
Posted on February 29, 2008Here is a post by Mark Herrmann and James Beck on their blog called Drug and Device Law about their views on lawyers at big firms who have their own blogs. This is a topic I have written on before and that I could fill volumes on, but for now I will defer to the widely-read and wildly popular Messrs...
Just a Bloody Mess Involving Electronic Discovery
Posted on February 28, 2008Here is an update of the Qualcomm e-discovery matter that we have been following, courtesy of the Electronic Discovery Law Blog. What a bloody mess. Qualcomm just paid over $8 million in penalties imposed by the court for failing to provide e-mails during discovery...
Do Arbitration Clauses Really Reduce Time and Expense?
Posted on February 27, 2008In McLaughlin v. McCann, 2008 WL 483457 (Del. Ch., Feb. 21, 2008), read opinion here, the Delaware Chancery Court addresses the perennial issue of whether the court or an arbitrator should decide the threshold matter of arbitrability, based on the arbitration clause in an agreement, and a dispute about whether the provision requiring arbitration of claims covers the particular claim involved...
Section 155 Valuation of Shares More Limited Than Under DGCL Section 262
Posted on February 24, 2008Grace Brothers, Ltd. v. Siena Holdings, Inc., 2008 WL 441390 (Del. Ch., Feb. 14, 2008), read letter decision here in which the court denied a motion to compel production of a Private Placement Memorandum in connection with the valuation of shares 5 years later in the context of a claim for violation of DGCL Section 155...
"Agreement to Agree" in Future Not Enforceable
Posted on February 24, 2008In Welsh v. Heritage Homes of DeLaWarr, 2008 WL 442549 (Del. Ch., Feb. 15, 2008), read opinion here, the Chancery Court refused to enforce a builder's "tie-in" agreement as an agreement to agree in the future without sufficiently definite or complete terms...
EDiscovery Consultant Required to Submit Qualifications
Posted on February 24, 2008In Solow v. Aspect Resources, LLC, 2008 WL 441394 (Del. Ch., Feb. 8, 2008), read opinion here , the Chancery Court in a one page letter addressed the enforceability of a subpoena. The decision is so short that it would be easier to quote it than to summarize it...
Chancery Stays Action in Favor of Pending California Case
Posted on February 20, 2008In Eurocapital Advisors LLC v. Colburn, 2008 WL 401352 (Del. Ch., Feb. 14, 2008), read opinion here, the Chancery Court decided whether Delaware was the appropriate forum for members of an LLC who also had a case pending against each other in California...
Supplemental Discovery Replies Compelled
Posted on February 19, 2008In Ryan v. Gifford, (Del. Ch., Feb. 7, 2008), read opinion here, the Chancery Court resolved a discovery dispute and ruled on the quotidian quibbling that is sometimes unavoidable in the fight for documents and data that the other side is not always willing to provide with alacrity and celerity in the course of exchanging information among the parties in order to prepare for trial...
Chancery Court eFiling Requirements
Posted on February 19, 2008Here is an Administrative Directive from the Chancery Court that relates to eFiling procedures. It is not a new order but it bears reference for those who file anything in the Court of Chancery (which now requires eFiling for virtually everything submitted to the court...
More Litigation Over Application of Arbitration Clauses
Posted on February 18, 2008Matria Healthcare, Inc. v. Corral SR LLC, 2008 WL 401125 (Del. Ch., Feb. 14, 2008), read letter opinion here. This decision addressed the implementation of a prior opinion summarized here which decided which post-merger claims the parties intended to submit to the AAA and which claims were to be submitted to a post-closing accountant for a binding determination...
Board Decision to Reject Offer Protected by BJR
Posted on February 18, 2008In Gantler v. Stephens, 2008 WL 4011124 (Del. Ch., Feb. 14, 2008), read opinion here, the Chancery Court addresses the right of the board to reject an offer of merger and enjoy the protection of the business judgment rule when doing so. Also decided was an issue related to the ratification by shareholders of a reclassification plan which the court found to have been done with full disclosure...
Are Caremark Duties of Directors Real?
Posted on February 17, 2008One corporate law professor argues that the landmark Delaware Chancery Court decision in 1996 of In Re Caremark, describing a director's duty of oversight, was "dead upon enunciation" and it is, in practice, a Potemkin Village that never actually results in liability in light of the common "opt in" provision of DGCL Section 102(b)(7) that protects directors against claims that they violated their duty of care...
California Supreme Court Follows Delaware Law
Posted on February 17, 2008Grosset v. Wenaas is the name of a very recent California Supreme Court decision that followed Delaware law. Read the opinion here. This West Coast jurisprudence comes to us courtesy of Justin Myer Lichterman, a lawyer in the San Francisco office of the Orrick firm who was kind enough to forward the case to me with the following introductory summary: Though the real issue in the case was whether CA requires continuous ownership, as well as contemporaneous, the Court brought CA into line with Delaware on the contemporaneous and continuous ownership requirements for standing in derivative actions...
Should Shareholders Have Fiduciary Duties?
Posted on February 17, 2008Here is a post by Prof. Ribstein that links to an article by Prof. Lynn Stout that argues for fiduciary duties to be applied to shareholders (even if not majority shareholders).
New Open-Records Law Next Door
Posted on February 14, 2008Please excuse this brief "off-topic" post that aims to celebrate good government, but more candidly it also is a chance to exult in the success of my big brother, Dominic, who was the author and prime sponsor of Senate Bill 1 that was just signed today by the Governor of Pennsylvania (Delaware's next door neighbor)...
Directors Who Are Not Shareholders Cannot Sue Derivatively
Posted on February 13, 2008In Schoon v. Smith, (Del. Supr., Feb. 12, 2008), read opinion here, the Delaware Supreme Court ruled yesterday that a director qua director may not sue fellow directors of a corporation derivatively. This may sound esoteric for some, but any time the Delaware Supreme Court decides an issue that relates to the duties and/or rights of directors of a Delaware corporation, most serious students of corporate law and Delaware litigation pull up their socks and pay attention...
Attorney-Client Privilege May Follow Purchaser of Company
Posted on February 11, 2008In Postorivo v. AG Paintball Holdings, Inc., 2008 WL 343856 (Del.Ch., Feb. 7, 2008), read opinion here, the Delaware Chancery ruled on the issue of who holds the attorney-client privilege when a company is sold in an asset sale, and the successor continues to operate the business? The court followed settled Delaware law and respected a forum selection clause that provided for New York law to control the dispute between the parties...
Is Dodge v. Ford Motor Co. Still "Good Law"
Posted on February 11, 2008Here is a post by Prof. Bainbridge which refers to recent scholarship by his fellow UCLAW professor Lynn Stout, as well as an article by Prof. Gordon Smith on the seminal 1919 Michigan Supreme Court decision in Dodge v. Ford Motor Co...
Corporate Governance in China: Does It Exist?
Posted on February 11, 2008Here is a post by Prof. Donald Clarke on the Conglomerate blog, about the inability to enforce, predictably, any of the corporate governance principles that are on the books in China. This must be a serious limitation on the ability of China to become a major world economic leader as well as a source of hesitancy for those thinking of becoming investors in Chinese companies...
No Personal Jurisdiction Over Directors of Non-Delaware Corporation Despite Contract Granting Exclusive Delaware Jurisdiction Over Corporation
Posted on February 10, 2008In Ruggiero v. FuturaGene, plc, et al., (Del. Ch., Feb. 1, 2008), read opinion here, the Chancery Court refused to exercise personal jurisdiction over the directors of a British corporation despite a merger agreement which granted exclusive jurisdiction to Delaware courts over any issues arising out of the merger...
Chancery Rejects Disclosure and Fiduciary Claims in Exchange Offer between Viacom and Blockbuster
Posted on February 07, 2008In Pfeffer v. Redstone, 2008 WL 308450 (Del. Ch., Feb. 1, 2008), read opinion here, the Chancery Court provides a treasure trove of the applicable standards used to review the conduct of directors in connection with claims for breach of fiduciary duty related to failure to make full disclosure in documents sent to shareholders...
Article on Defective Issuance of Shares Under Delaware Law
Posted on February 07, 2008Delaware lawyers Seth Barrett Tillman and Stephen Bigler recently wrote a scholarly article that addresses the issue under Delaware law of stock issuances that may suffer from some infirmity such as lack of complete compliance with all necessary corporate formalities, and whether such a stock issuance is void or merely voidable...
Painful Lessons in Electronic Discovery from Qualcomm Decision
Posted on February 05, 2008We previously noted here a recent decision in the Qualcomm case by a Federal Magistrate Judge in California that delivered a living nightmare to a group of lawyers who found themselves on the wrong side of an electronic discovery problem on the last day of a long trial (read: witness revealed that large numbers of emails had not been produced)...
First-Filed Rule Supports Stay of Delaware Case in Favor of Pending Texas Case
Posted on February 04, 2008In Citrin Holdings LLC v. Cullen 130, LLC, 2008 WL 241615 (Del. Ch., Jan. 17, 2008), read opinion here, the Chancery Court followed the familiar McWane line of cases and granted a Motion to Stay this Delaware case in favor a first-filed Texas case...
Discovery Pending Motion for Summary Judgment Addressed Together with At-Issue Exception to Attorney/Client Privilege
Posted on February 04, 2008In Amirsaleh v. Bd. of Trade of the City of New York, Inc., 2007 WL 241616 (Del. Ch., Jan. 17, 2008), read opinion here, the Chancery Court addressed the imbroglio-creating concept of the "at-issue" exception to the attorney/client privilege...
Corporate Governance in China
Posted on February 04, 2008Here is a post by Prof. Donald C. Clarke, guest-blogging on the Conglomerate blog, about the gap between what the law of corporate governance in mainland China provides "on the books", and the observance of those laws, due to several reasons, including the absence of the judiciary that we have--say in Delaware--to enforce those statutes.
Delaware's Long-Arm Statute Applied to Find Jurisdiction.
Posted on February 03, 2008Here is a post from the Delaware Business Litigation Report that flags a recent decision from the U.S. District Court for the District of Delaware which found personal jurisdiction based on aspects of a transaction that created ties to Delaware...
Overview of Key 2007 Decisions from Delaware's Chancery Court and Supreme Court
Posted on January 29, 2008As I have done for opinions issued in 2005 and 2006, I have prepared a review here of key corporate and commercial decisions from the Delaware Chancery Court and Delaware Supreme Court during the year 2007. See my two prior yearly summaries here...
Deposition Practice in Delaware
Posted on January 29, 2008Depositions in Delaware are subject to rules of practice and procedure that are materially different in form and substance to what I have observed in many other states. Both the Delaware Chancery Court and the Delaware Supreme Court enforce the rules relating to deposition practice and take it very seriously...
Bloomberg Reports on Recent Chancery Court Filings
Posted on January 29, 2008Here is a Bloomberg story today that reports on recent suits filed in Chancery Court involving a clash of the titans, John Malone and Barry Diller, and the contests for control over their varied and sprawling business interests. Yours truly was quoted and Bloomberg graciously allowed me to link the story above...
Republicans Searching for Gubernatorial Candidate
Posted on January 28, 2008Veteran political reporter Celia Cohen reports here on her Delaware Grapevine site about the efforts of Delaware Republicans to find a candidate for Governor of Delaware--for the election in November 2008 (correct, there is precious little time left to find a candidate).
Delaware Litigation via Pro Hac Vice Admissions
Posted on January 28, 2008Many lawyers from around the country engage in Delaware litigation via pro hac vice admissions. (For our non-lawyer readers, that means they are not licensed in Delaware but obtain court approval to handle a particular case with the assistance of a local Delaware lawyer...
Procedural Aspects of LLC Claims
Posted on January 27, 2008Professor Larry Ribstein, a nationally recognized authority on unincorporated associations, and author of the leading treatise on LLCs, comments here about some of the procedural entanglements that arise in connection with claims among LLC members, and the adoption by some courts of the concept of a derivative suit used in corporations even though it may not be well-suited to the LLC form...
Why Do Delaware Judges Write Articles?
Posted on January 25, 2008Here is a post from Renee Jones of the Conglomerate blog with thoughts about why some current and former Delaware jurists are so prolific--in addition to their published opinions.
Dealing with Difficult People
Posted on January 25, 2008Some wags might see the title and think I am writing about working in a law firm. Wrong, but good guess.This topic is directly related to the litigation issues addressed in this blog. More specifically, courtesy of the highly-regarded Delaware trial lawyer Richard DiLiberto, Jr...
Tyson Case Settles
Posted on January 23, 2008Three Chancery Court decisions in the Tyson Foods case were summarized here, here and here regarding claims based on spring-loading of options. (The last decision was a discovery dispute). Here is an update report on Kevin LaCroix's D & O Diary that describes a recent settlement of the case, pending court approval.
Blogging in Large Law Firms
Posted on January 23, 2008This musing will be short but to the point. I know that many of my readers are lawyers in large firms so I am openly soliciting comments about this post from them as well as any other readers. It has been about 3 years since I started this blog and I have been fortunate to enjoy a fair measure of popular acclaim...
Delaware's Only Corporate Lawyer and Kentucky Colonel
Posted on January 22, 2008The current issue of Delaware Today magazine has a short but entertaining article about my blog and describes me as the only corporate lawyer in Delaware who is also a Kentucky Colonel. ( I think my saintly mother--God rest her soul--would have enjoyed reading it...
Business Strategy Immunity from Discovery Requests
Posted on January 22, 2008The "Business Strategy" or "White Knight" Immunity refers to the concept that certain sensitive business information will be protected from discovery in lawsuits. It is the topic of an article in the current issue of Delaware Lawyer magazine by Wilmington lawyers Edward B...
Supreme Court Addresses Judicial Recusal Standard
Posted on January 22, 2008In Home Paramount Pest Control v. Gibbs, (Del. Supr., Jan. 17, 2008), read opinion here, the Delaware Supreme Court addressed the judicial recusal standard in the context of a hearing officer for an administrative agency. Here is the quote that recites the two-part test for recusal and the reasoning behind the rule:The requirement that judges be impartial is a fundamental principle of the administration of justice ...
Chancery Orders Advancement Based on Bylaws' Description of "Officer"
Posted on January 20, 2008In Sassano v. CIBC World Markets Corp., 2008 WL 152582 (Del. Ch., Jan. 17, 2008), read opinion here, the Chancery Court interpreted the bylaws of a corporation as a matter of law, and applied the facts after a one-day trial to determine if the particular position of the plaintiff complied with the position of "officer" in order for the advancement rights to apply, as allowed by DGCL 145...
Chancery Refuses to Dismiss Claim for Breach of "Agreement to Agree" and Allows Claims for Failure to Negotiate in Good Faith and Failure to Use Best Efforts to Conclude an Agreement
Posted on January 20, 2008In Pharmathene, Inc. v. SIGA Technologies, Inc., 2008 WL 151855 (Del. Ch., Jan. 16, 2008), read opinion here, the Chancery Court addressed several key issues of great interest to those involved in business litigation--and civil litigation in general...
Chancery Refuses to Defer to Bankruptcy Stay in Ordering Shareholder Meeting
Posted on January 20, 2008In Fogel v. U.S. Energy Systems, Inc., 2008 WL 151857 (Del. Ch., Jan. 15, 2007), read opinion here, the Delaware Chancery Court refused to defer its decision to order a shareholders' meeting pursuant to DGCL 211, despite the "automatic stay" provision of Section 362 of Chapter 11 of the Federal Bankruptcy Code...
Hardship Supports Stay of Case Based on Forum Non Conveniens
Posted on January 20, 2008In Aveta, Inc. v. Colon, 2008 WL 151859 (Del. Ch., Jan. 15, 2008), read opinion here, the Chancery Court found the facts of this case to exhibit the rarest of jurisdictional "birds" (my word). Namely, based on overwhelming hardship and forum non conveniens factors, the court stayed a Delaware action, in favor of a later filed proceeding in Puerto Rico, despite a forum selection clause selecting Delaware...
"Injustice Anywhere is a Threat to Justice Everywhere"
Posted on January 20, 2008In honor of Martin Luther King Day, the above inspirational quote and others by the civil rights leader are featured here on The Wall Street Journal Law Blog.
Delaware Corporate Law Explained in Cartoons
Posted on January 20, 2008Courtesy of Stu's Views at www.stus.com (HT: Bainbridge), we bring you a cartoonist's depiction of key decisions of the Delaware courts on corporate law that have been covered on this blog. For example, in the Araneta case, summarized here, the following cartoon demonstrates the court's scholarly analysis of certain board members "looking the other way" while others looted the company...
Chancery Approves Class Action Fees For Settlement Resulting in Revised Proxy Disclosures Only
Posted on January 20, 2008In re: James River Group, Inc. Shareholders Litigation, 2008 WL 160962 (Del. Ch., Jan. 8, 2008), read letter decision here. This Chancery Court decision addresses the request for attorneys' fees based on a class action settlement approved last month...
Delaware's Next Governor Will Be a Democrat
Posted on January 19, 2008I have previously posted, however sparsely, about why the person selected to live in the Governor's Mansion in Dover is relevant to this blog. Namely, because in Delaware the Governor appoints all the judges and those appointments influence the quality of the corporate jurisprudence summarized on these pages...
Books and Records Demand from LLC including E-mails
Posted on January 19, 2008Kasten v. Doral Dental USA, LLC, 733 N.W.2d 300 (Wisc. 2007), read opinion here. This decision of the Wisconsin Supreme Court dealt with a demand for books and records from an LLC. Although this may seem outside the scope of this blog on Delaware business litigation, it is relevant to the focus of this site because the decision includes a survey of the history of the parts of LLC statutes across the country that deal with demands for books and records, and the interface of those provisions with the terms of an operating agreement providing for demand of books and records...
Chancery Rules on Proxy Contest, "Vote-Buying" and "Adjourned" Annual Meeting
Posted on January 17, 2008Portnoy v. Cryo-Cell International, Inc., (Del. Ch., Jan. 15, 2007), read opinion here. This 73-page Chancery Court decision addresses issues raised in a challenge to the election of directors under DGCL Section 225 based on claims that the management engaged in inequitable behavior to entrench themselves, both in proxy battles leading up to the annual meeting, as well as shenanigans during the annual meeting itself...
Delaware's High Court Distinguishes Between Statutory Right to Vote on Merger v. Contract Right to Consent to Merger
Posted on January 15, 2008In Matulich v. Aegis Communications Group, Inc., (Del. Supr., Jan. 15, 2007), read opinion here, the Delaware Supreme Court today affirmed a Chancery Court decision, summarized here. Delaware's High Court explained the difference between a contract right of preferred shareholders to consent to a merger (see DGCL Section 212(b)), and the statutory right to vote on a merger pursuant to the short-form merger procedure in DGCL Section 253 that requires that the parent own 90% of the voting shares...
Supreme Court Decides Stoneridge case
Posted on January 15, 2008The U.S. Supreme Court decided the Stoneridge case today. Here is what you need to know about the most important High Court securities decision in a generation, as highlighted by Professor Bainbridge. Fraud claims were rejected against third-parties who did not directly mislead investors even though their business partners did...
Capitalism and Responsibility
Posted on January 15, 2008Two related topics in one post.First. I am experimenting with an ad in the sidebar of this blog from Forbes.com. As a business publication, the source won't be too far removed from the focus of this blog and I will be able to pre-approve the ads...
Order Appointing Lead Counsel Reconsidered
Posted on January 14, 2008In the case of In Re BEA Systems, Inc. Shareholder Litigation, (Del. Ch., Jan. 4, 2008), read letter decision here, the Chancery Court vacated a prior order appointing lead counsel, which order also had consolidated several class actions. The prior order was based on the court's understanding that the parties' counsel had agreed on who the lead would be...
New Articles on Delaware Corporate Law
Posted on January 14, 2008Several new articles on Delaware corporate law and related topics arrived in today's mail, coincidentally, in two separate publications: the Delaware Law Review and the ABA's The Business Lawyer. Here are a few that should especially interest readers of this blog: Lyman Johnson, Having the Fiduciary Duty Talk: Model Advice for Corporate Officers (and Other Senior Agents), 63 Bus...
Strine and Lipton on Directors and Delaware Law
Posted on January 14, 2008Professor Bainbridge flags a panel on which Vice Chancellor Leo Strine, Jr. of the Delaware Chancery Court and the iconic lawyer Marty Lipton talk about directors and Delaware law. From the professor's post, an excerpt:Having just finished the final round of edits on an article on good faith in Delaware corporate law, I was struck by Strine’s comment that: He stressed the interconnectedness between good faith and loyalty...
Lack of Personal Jurisdiction and Venue Arguments Rejected
Posted on January 13, 2008Sloan v. Segal, 2008 WL 81513 (Del. Ch., Jan. 3, 2008), read opinion here. This Delaware Chancery Court case includes a helpful discussion of personal jurisdiction and venue issues in connection with residents of other states who are fighting over Delaware documents...
Happiness Defined
Posted on January 13, 2008Courtesy of Victoria Pynchon, is a connection between America's Founding Fathers' enshrining the "pursuit of happiness" and the definition of happiness according to certain Greek philosophers. For your Sunday morning inspiration, I have provided the following excerpt from her blog post:The Pursuit of Happiness We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness...
Law Professors, Blogging and The New York Times -- and Delaware Corporate Law
Posted on January 10, 2008As a follow-up to my earlier post today, here is late-breaking news, courtesy of Prof. Larry Ribstein, about law professor Steven Davidoff, whose blog attracted the attention of The New York Times -- for whom Professor Davidoff will now be blogging "full-time"...
Another Example of the E-Discovery Elephant in the Room
Posted on January 10, 2008As I have mentioned on these pages many times, electronic discovery is something that anyone who does business litigation needs be familiar with as well as being on top of recent developments. There are so many examples of disasters (that could happen to almost anyone) because someone's "e-discovery house was not in order"...
Bloggers and Blogs at Big Law Firms
Posted on January 10, 2008Although I try to keep "on message" and 99% of my blog posts are focused on corporate and commercial decisions from Delaware, and related business litigation topics, I know that a fair portion of my readers are from big firms and that the following article would likely interest them...
Court Imposes Penalty of $8.5 Million for Discovery Violations
Posted on January 08, 2008Here is a post from the Electronic Discovery Law Blog that describes a very recent Order from the U.S. District Court for the Southern District of California that imposed a penalty of more than $8.5 million in attorneys' fees on Qualcomm for what that court determined was the failure of both in-house and outside counsel to produce tens of thousands of documents that had been requested in discovery--which failure was not revealed until the middle of trial...
In Defense of Delaware Corporate Law Opinions
Posted on January 04, 2008I should know better than to debate a professor in light of the likelihood that he has more time and inclination by virtue of his occupation (read: no billable hours) to spend on rebuttal, but here it is. Professor J. Robert Brown recent provided here a "top 5 list" of cases from the Delaware Chancery Court that -- in his view -- showed why Delaware was "anti-shareholder and anti-plaintiff...
Request for Interlocutory Appeal Denied Regarding Production of Special Litigation Committee Files
Posted on January 04, 2008Ryan v. Gifford, 2008 WL 43699 (Del. Ch., Jan. 2, 2008), read opinion here, is the first reported Delaware Chancery Court decision of 2008 and follows three prior decisions in this case, which were summarized here, here and here. The first decision back in February 2007 allowed a claim to proceed based on (now admitted) stock option backdating,This latest decision is a denial by the Chancery Court of a request for an interlocutory appeal to the Supreme Court of parts of a discovery decision on November 30, summarized here, that required the production of allegedly privileged documents used by the Special Litigation Committee (SLC)...
Summary of Cases on Radio
Posted on January 04, 2008Tomorrow I will discuss on the radio at about 10:20 in the morning, some of the key decisions that I have summarized during 2007 from Delaware's Chancery Court and Supreme Court. The station in Wilmington, Delaware is found at 1450 AM. Here is the link to the radio station's website.
ABA Newsletter of Business and Corporate Litigation Committee
Posted on December 31, 2007Here is a link to the current issue that was recently released of the Newsletter of the Business and Corporate Litigation Committee of the American Bar Association's Business Law Section. Apart from my role as Editor of the publication, the current Newsletter includes a short article I wrote concerning the recent Sample v...
Overview of Key 2007 Corporate and Commercial Decisions
Posted on December 31, 2007As I have done for opinions issued in 2005 and 2006, I have prepared a review of key corporate and commercial decisions from the Delaware Chancery Court and Delaware Supreme Court during the year 2007. See my two prior yearly summaries here...
Diversity Issues
Posted on December 30, 2007Here is an article from the Law.com network that identifies issues that may arise in connection with the diversity policy "bandwagon" that most law firms are following. The article promises more litigation on the issues raised.
Supreme Court Allows Fees to Out-of-State Litigant in Class Action Settlement
Posted on December 29, 2007Alaska Electrical Pension Fund v. Brown, et al., (Del. Supr., Dec. 21, 2007), read opinion here. The best summary of this Delaware Supreme Court decision is supplied by the Court in the introductory paragraphs of its opinion:"[The Court decides] ...
Chancery Rejects Extension of Deadline for Claims v. Dissolved Corporation's Shareholder
Posted on December 28, 2007In Virgin Islands v. Goldman, Sachs & Co., 2007 WL 4480823 (Del. Ch., Dec. 20, 2007), read opinion here, the Chancery Court, in this epic decision of over 100 pages in its original format, recounts a generation-long procedural history in connection with a textbook-length discussion of the public policy considerations related to the time period within which one must, or should, bring a claim against a dissolved corporation or its shareholders and directors...
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My situation is somewhat difficult to describe, but about two months ago planes began arriving at an airport near my house and an organized stalking effort began. As I'm driving to and from home, cars will begin encircli
I would like this person 'anonymous' to get in touch with me. Question...
I live on 10 acres in a "residental" area of homes. Even though we are not zoned commercial my next door neighbor obtained a variance from the county and is running a business. The traffic is right next to my
The time to protest was when the variance was being deliberated by the County. Y...
How to get a used car dealer to honor warranty for repairs required two weeks after purchase?
What was the defect? Rust? A hole? Bad converter? Broken hangers? If it was rust...
As of right now i am currently residing in a federal halfway house and wish to pursue a 28 U.S.C.1331 civil action lawsuit which initially began in 2003 to the present date.if the litigation is still continuing,can i sti
Give me the specifics and maybe I can tell you if your case is worth trying. Whe...
What are FCPA violations?
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