Litigation

Discovery of Special Litigation Committee Documents Compelled

By Francis G. X. Pileggi, Esq.

In 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. The court did not accept the argument that the references to the committee's findings were "not relied on for the truth of the matter asserted".

 By referencing the committee's findings, the underlying Motion to Dismiss under Rule 12(b)(6) was converted to a Motion for Summary Judgment under Rule 56--for which limited discovery is often allowed prior to the opposing party being required to reply. The court noted the similarity between the facts and the law of this case and the recent Chancery Court decision in Fleischman v. Huang, 2007 WL 2410386 (Del. Ch., Aug. 22, 2007), that was summarized on this blog here.

The Delaware Business Litigation Report has a summary of Young v. Klassan here.

Full post as published by Delaware Corporate and Commercial Litigation Blog on April 30, 2008 (boomark / email).