Showing 20 posts from December 2005.
Federal Court Transfers Venue Under The Jumara v. State Farm Ins. Co. Articulation Of 28 U.S.C. Section 1412 Multifactor Considerations.
Court of Chancery Substantially Denies Motion to Dismiss Complaint Seeking Release of Escrowed Funds and Other ReliefBonham v. HBW Holdings, Inc., C.A. No. 820-N, 2005 WL 3589419 (Del. Ch. Dec. 23, 2005). Former stockholders sued acquirer for release of $25 million held in escrow for purpose of indemnification for breach of warranty claims and other relief. The acquirer moved to dismiss the complaint on the grounds that it properly and timely noticed claims for breach of warranty and other issues, Plaintiffs failed to allege that those claims were made in bad faith, and certain of the claims were subject to mandatory arbitration under the terms of the stock purchase agreement. More › Share
Court of Chancery Grants Partial Summary Judgment with Respect to Claims that Former Controlling Stockholder Extracted Excess Compensation from Acquirer in Exchange for Supporting MergerCrescent/Mach I Partnership, L.P. v. Turner, C.A. No. 17455-NC, 2005 WL 3618279 (Del. Ch. Dec. 23, 2005). Former stockholders who were cashed out in connection with merger sued the corporation's former controlling stockholder and the acquirer for breach of fiduciary duty and aiding and abetting breach of fiduciary duty, respectively. Plaintiffs complained of numerous side deals, allegedly negotiated by the controlling stockholder. Plaintiffs also complained that the controlling stockholder breached his fiduciary duty by supplying growth projections that he knew to be unduly pessimistic and inconsistent with management's view. Defendants moved for summary judgment, which the court granted in part and denied in part. More › Share
Court Enforces Lease Provision Protecting Supermarket from Competition from Other Shopping Center TenantsPenn Mart Supermarkets, Inc. v. New Castle Shopping LLC, C.A. No. 20405-NC, 2005 WL 3502054 (Del. Ch. Dec. 15, 2005). Liquor store chain acquired leasehold rights in commercial shopping center under a Bankruptcy Court order that authorized it to operate one of its typical stores. In addition to alcohol products, those chain stores also sold food products and a wide range of products typically sold in supermarkets. Tenant who operated supermarket in same shopping center sued landlord and liquor store to enforce provision in its lease protecting it from competition by other tenants in the operation of a supermarket and in the sale of food or food products intended for off-premises consumption. More › Share
Court of Chancery Holds Contractually Granted Advancement Rights Not Abrogated by Subsequent Indemnification Agreement Containing Integration ClauseBrady v. i2 Technologies Inc., C.A. No. 1543-N, 2005 WL 3691286 (Del. Ch. Dec. 14, 2005). A former executive and director sought advancement of his expenses in connection with the defense of certain proceedings based on a standard corporate advancement provision in a 1996 indemnification agreement. Defendant corporation argued that an integration clause in a subsequent 2002 severance agreement, which stated that the 2002 agreement expressed the entire agreement between the parties "with respect to the subject matter hereof," abrogated the advancement obligation imposed by 1996 agreement. More › Share
Court Grants Significantly Smaller Fee Award Than That Sought by Plaintiffs' Counsel in Connection with Settlement of Derivative ActionIn re Instinet Group, Inc. Shareholders Litig., C.A. No. 1289-N, 2005 WL 3501708 (Del. Ch. Dec. 14, 2005). Following the court's approval of settlement of derivative claims, Plaintiffs' counsel applied for an allowance of $1,450,000 in contingency fees and $173,031.07 in costs. Defendants agreed that Plaintiffs' attorneys were entitled to some award of fees and expenses, but objected to counsel's request as excessive under the circumstances on the grounds that (1) the litigation benefits achieved were modest, (2) the case settled at an early stage, and (3) Plaintiffs' counsel litigated the case ineffectively. More › Share
Court Dismisses Claim That Board Breached Fiduciary Duty by Failing to Seek Recovery of Bonus that Turned Out to Be Unjustified After Accounting RestatementLaties v. Wise, C.A. No. 1280-N, 2005 WL 3501709 (Del. Ch. Dec. 14, 2005). In 2001, Defendant corporate executive received bonuses and other compensation near $9 million as CEO, due in some part to the corporation's reported profits that year. Several years later, after that executive's departure, the corporation restated its 2001 performance from a $93 million profit to a $447 million loss. Plaintiff brought a derivative claim against executive for unjust enrichment, and against the present directors of the corporation for breach of fiduciary duty and waste. Defendants moved to dismiss under Court of Chancery Rule 23.1. More › Share
Court Denies Motion to Dismiss Claims for Tortious Interference and Civil Conspiracy in Connection with Telecommunications Merger
Court of Chancery Denies Motion to Stay Books and Records Action in Favor of Separate Derivative Action Involving Substantially Similar MattersKaufman v. Computer Associates International, Inc., C.A. No. 699-N, 2005 WL 3470589 (Del. Ch. Dec. 13, 2005). A beneficial stockholder filed a books-and-records action pursuant to 8 Del.C. §220 seeking documents relating to the corporation's decision to settle certain derivative and federal class action litigation in a manner that allegedly benefited the individual wrongdoers at the corporation's expense. A special litigation committee acting on behalf of the corporation moved to stay this action until it completed its investigation on this issue, which had become the subject of new derivative litigation in New York brought by different plaintiffs. More › Share
Court Declines to Award Fees on Fees in Advancement Proceeding Where Not Required under Indemnification Agreement and Plaintiff Failed to Achieve Cognizable Success in Prosecuting ClaimKaung v. Cole National Corporation, C.A. No. 163-N, 2005 WL 3462250 (Del. Ch. Dec. 13, 2005). On remand in an advancement action, Plaintiff filed a motion requesting an award of his attorneys' fees and costs incurred in prosecuting his claim. In the previous proceeding, the Court of Chancery had held that Plaintiff was not entitled to advancement and ordered Defendant to repay fees that had already been advanced to him. On appeal, however, the Delaware Supreme Court held that the Court of Chancery erred in reaching the recoupment issue prematurely, rather than leaving it for a later proceeding in which Plaintiff's ultimate right to indemnification could be decided. More › Share
Federal Court Permits Reconsideration of Fees and Costs Award, and Imposes Them Entirely on Other Defendant for Bad-Faith ConductMoney Centers Of America, Inc. v. Regen, No. Civ. A. No. 04-1516-KAJ, 2005 WL 3309610 (D.Del. Dec. 6, 2005). This Memorandum Order ruled on three motions related to the Court's Order of October 17, 2005 ("October Order"): (1) reconsideration or, in the alternative, alter or amend judgment; (2) Protective Order related to depositions; and (3) stay, pending appeal. The October Order granted relief to plaintiffs Money Centers of America, Inc., and Available Money Inc., to reopen the Order to allow the settlement agreement between the parties to be entered on the record and permitted defendant Available Money to take additional discovery. The Court ruled that: (1) defendant Coast ATM and Mrs. Regen would not be liable to the extent of the attorney fees and costs incurred with regard to the October motion to reopen the judgment; (2) that Coast ATM's motion for reconsideration was appropriate; (3) denied the relief requested as moot with respect to the relief sought from earlier Delaware-based depositions; and (4) denied Defendant Mr. Regen's motion to the extent that it would have relieved him from bearing all attorney fees and costs related to the October Order. More › Share
In re Molson Coors Brewing Company Securities Litig., 233 F.R.D. 147 (D.Del. Dec. 2, 2005). This Memorandum Order deals with the appointment of lead counsel in three purported class claims for alleged violations of federal securities laws. The actions were consolidated by the Court. The class claims ensued from the 2005 merger and agreement between Molson, Inc., ("Molson"), the third largest brewer in Canada and Adolph Coors Company ("Coors"), the third largest brewer in the U.S., creating the Molson Coors Brewing Company ("Molson Coors"). The Court held that the Metzler Group would act as lead plaintiff and its counsel would be lead counsel. More ›Share
Benihana of Tokyo, Inc. v. Benihana, Inc., C.A. No. 550-N, 2005 WL 3753046 (Del. Ch. Dec. 8, 2005). Stockholder sought rescission of an agreement to issue $20 million of preferred stock to a third-party holding company. Plaintiff alleged that the transaction violated 8 Del. C. - 151 and corporation's certificate of incorporation by granting the holding company shares with preemptive rights and was therefore void as ultra vires. Plaintiff also alleged that a majority of the corporation's directors breached their fiduciary duties in approving the transaction and that the transaction had an improper primary purpose to dilute Plaintiff's interest in the corporation and entrench certain director defendants. Plaintiff further alleged that the acquirer aided and abetted the director defendants in their actions. More ›Share