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Court Of Chancery Provides Guidelines On Stantdstill Orders

Posted In Injunctions

IMO Dissolution Of Adir Managment Services, C. A. Nos. 8717 and 8718-VCN (August 9, 2013)

The Court of Chancery often enters standstill orders or status quo orders when the control of a Delaware entity is in dispute.  The orders are designed to prevent actions that may not be what the actual management would do in circumstances when the identity of that management is not in doubt. Disputes over the form of these orders are common and this decision seems to settle how one provision should be worded.  At least in the absence of special circumstances, the provision of the order that prevents extraordinary actions should be worded so as to permit action after 7 days notice to the other side, who is then free to seek court action if it objects.

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