About This Blog

Summaries and analysis of recent Delaware court decisions concerning business-related litigation.

Morris James Blogs

Links

Court Of Chancery Explores Risk Management Duties

In re General Motors Company Derivative Litigation, C.A. 9627-VCG (June 26, 2015)

This decision involves the currently hot topic of the extent of a board of directors’ duty to properly assess corporate risks and act to prevent loss. More ›

Superior Court Extends Jurisdiction Under The Director Long Arm Statute

Ting v. Silver Dragon Resources, Inc., No. 14C-12-067 WCC (June 3, 2015)

It is conventional wisdom that the director long arm statute only confers jurisdiction for breaches of fiduciary duty. Yet as this decision points out, that limitation is not firmly grounded in the words of the statute. Hence, this decision may expand the sort of claims for which a director may be subject to Delaware court jurisdiction when the tort or other claim  is only “related and predicated” on conduct that implicates a breach of fiduciary duty.

Delaware Enacts Online Privacy Law – Website Operators Will Need to Comply

Posted In Articles

Online businesses take note. Delaware may finally have an online privacy law. On June 25, 2015, the Delaware General Assembly passed SS1 for SB68, known as the “Delaware Online Privacy and Protection Act.” If signed by the governor, DOPPA will go into effect on January 1, 2016. More ›

Court Of Chancery Explains Claims Available To LLC Members

CMS Investment Holdings LLC v. Castle, C.A. No. 9468-VCP (June 23, 2015)

This is an interesting decision because it explains what direct claims are available to investors in an LLC. More ›

Court Of Chancery’s Newest Appraisal Precedent

Posted In Appraisal

Owen v. Cannon, C.A. 8860-CB (June 17, 2015)

This is the new Chancellor’s first appraisal decision. He adheres to prior precedent’s use of a special tax rate for sub S corporations and the preference for reliance on pre-merger projections.

Court Of Chancery Resolves Attorney Conflict

Partners Healthcare Solutions Holdings LP v. Universal American Corp., C.A. 9593-VCG (June 17, 2015)

This is an interesting decision for the way it approves how to resolve a conflict over whether a law firm may represent some of an entity’s directors while at the same time suing that entity. An ethical screen seems to be enough to resolve the problem.

Attorney Fees Awarded Notwithstanding Failure to Prove Damages for Breach

Posted In Articles

In In re Nine Systems Shareholders Litigation, (Del. Ch. May 7, 2015), the Delaware Court of Chancery faced the difficult task of deciding an appropriate fee award where the defendants engaged in disloyal, bad-faith conduct, but the plaintiffs failed to prove damages. The plaintiffs proved at trial that the defendants breached their duty of loyalty to plaintiffs by conducting a self-interested recapitalization. Among other things, the defendants "utterly failed" to understand their fiduciary relationship with the plaintiffs, employed a "grossly inadequate process" and sought to avoid full and fair communications with the company's stockholders. Based on this wrongdoing, the court found the defendants engaged in bad-faith pre-litigation conduct that warranted fee-shifting in the amount of $2 million. More ›

A Roadmap to the Delaware Rapid Arbitration Act - A Webinar Presentation On June 24, 2015

Posted In News

Join us for a webinar on the new DRAA.

June 24, 2015 12:00 PM - 1:00 PM EST

The enactment of the Delaware Rapid Arbitration Act (the "DRAA") is a breakthrough in the quest for an efficient, cost-effective and timely process to resolve business disputes,  This webinar explains how the DRAA differs from traditional arbitration by providing a fast resolution that avoids the expense of extensive pre-hearing discovery, disputes over arbitration solution and multiple appeals. More ›

Chancery Court Expands on When Legal Fees Can Be Advanced

Posted In Articles

Advancement and indemnification rights provide directors and officers of Delaware corporations comfort when accepting positions that often lead to being named in litigation. However, once the interests of the executive and the company diverge, advancement rights can become a hotly contested issue. In dealing with advancement and indemnification claims, the Court of Chancery will analyze a company's bylaws and charter to determine to what extent that company has contracted with its executives to advance and indemnify legal fees. Many Delaware corporations, like Echo Therapeutics Inc. in the matter discussed herein, have bylaws and charters that allow for advancement and indemnification "to the full extent not prohibited under Delaware law." It is within that broad scope that decisions from the Court of Chancery, like the one authored in this case, guide practitioners in crafting arguments both for and against the advancement of legal fees. More ›

CorpCast Episode 7: Better Know a Judge: the Honorable Mary M. Johnston of the Delaware Superior Court

Posted In CCLD

In our second installment of “Better Know a Judge,” we welcome the Honorable Mary M. Johnston of the Delaware Superior Court in New Castle County.  Judge Johnston, who is a member of the Superior Court’s Complex Commercial Litigation (“CCLD”) panel, explains how the CCLD track can benefit litigants seeking swift and comprehensive resolutions to their business disputes.  In addition, Judge Johnston shares important lessons learned over the course of her career, as well as her advice for attorneys appearing before her and in the Superior Court.  Our thanks to Judge Johnston for joining us as a guest on the podcast! More ›