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: Delaware Business Litigation ReportCourt Of Chancery Discusses Director Removal Statute
By Edward M. McNally
Shocking Technologies Inc. v. Michael, C.A. 7164-VCN (April 10, 2012)
A year or so ago, the DGCL was amended to permit the removal of a director by the Court of Chancery. While the grounds to do are broadly stated (including "breach of the duty of loyalty"), the statute requires that the director first have been convicted of a felony or been found in a prior case to have breached his duty of loyalty. There thus remains the question of whether director removal may be done without a prior action that establishes the grounds to do so.
This decision suggests that such a direct action for removal will be very hard to win, for the Court expressed serious concerns over whether it has that authority absent the statutory prerequisites. The question is still open to be squarely decided in another case.
Full post as published by Delaware Business Litigation Report on April 10, 2012 (boomark / email).
Chancery Dismisses Part of Fiduciary Claim that Sought Removal of Director Based on Inherent Equitable Power of Court
Shocking Technologies, Inc. v. Michael, C. A. No. 7164-VCN (Del. Ch. April 10, 2012). Issue Addressed: Whether the Court of Chancery has the inherent authority to remove a director for breach of fiduciary duty, other than via DGCL Section 225? Short … Continue reading →
Chancery Issues TRO to Postpone Shareholder Meeting Due to Last Minute Removal of Incumbent Director from Company Slate
Sherwood v. Chan, C.A. No. 7106-VCP (Del. Ch. Dec. 20, 2011), read opinion here and TRO here. Issue Addressed Whether the last minute removal of an incumbent director from the company slate shortly before an annual shareholders? meeting created irreparable harm … Continue reading →
Chancery Grants Final Judgment Pursuant to Court of Chancery Rule 54(b) against one Defendant only; and Discusses Majority View Standard for Rule 12(b)(2)
Matthew v. Laudamiel, C.A. No. 5957-VCN (Del. Ch. March 20, 2012). The prior decision by the Delaware Court of Chancery in this matter was highlighted on these pages here. Issues Addressed Whether a final judgment should be entered pursuant to Court … Continue reading →
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