Showing 13 posts from April 2005.
Federal Court Awards Attorney Fees And Expenses Despite Lack Of Bad Faith In Eleven Month Discovery DelayTracinda Corp. v. Daimlerchrysler AG, No. Civ.A. 00-993-JJF, 2005 WL 927187 (D.Del. Apr. 20, 2005). This opinion relates to plaintiff's motion for sanctions for defendants' late production of documents in discovery. The matter was referred to a Special Master for a hearing in 2003. The Special Master found for the plaintiff who then filed the present motion for relief including: (1) witness Valade be barred from testifying about matters included in the delayed production unless his responses were required by the plaintiff's or the Court's questions; (2) that two witnesses be recalled to testify at trial; and (3) that the defendants be ordered to pay plaintiff's fees and costs incurred towards resolving the matters connected with the late production of the Valade documents. The Court denied plaintiff's request to bar Valade's testimony and permitted him to testify on all matters. It dismissed the second relief as moot because the parties had agreed to permit recall of the two witnesses. The Court however granted plaintiff's motion and awarded all costs and fees associated with the delayed production of the Valade notes. More › Share
Federal Court Dismisses Claim Of Personal Jurisdiction Because Website Listing Did Not Meet Due Process Requirement
Court of Chancery Dismisses Stockholders' Claims Because Claims were Derivative and Demand was Not ExcusedIn re J.P. Morgan Chase & Co. S'holder Litig., 2005 WL 1076069 (Del. Ch. April 29, 2005), aff'd, 2006 WL 585606 (Del. Mar. 8, 2006). J.P. Morgan Chase & Co. ("JPMC") and Bank One agreed to a business combination that was expected to create the second largest financial institution in the country. JMPC paid a premium over the market share price for Bank One, effectively making JPMC the acquirer and the Bank One the target. After the merger was completed, the stockholders of the acquirer sued its directors, alleging breaches of fiduciary duty with regard to the acquisition. Their claims stemmed from the allegation that the directors paid too much for the acquired bank. The defendants moved to dismiss the complaint on the basis that the claims were derivative, not direct, and that demand was not excused. The court granted defendants motion to dismiss. More › Share
Court of Chancery Finds that Substantial Litigation Expenses Not a Sufficient Material Adverse Effect to Rescind a ContractFrontier Oil Corporation v. Holly Corporation, 2005 WL 1039027 (Del. Ch. April 29, 2005). Frontier Oil Corporation and Holly Corporation are petroleum refiners that sought to merge. In conducting its due diligence review of Frontier, Holly discovered that activist Erin Brockovich was planning to bring a toxic tort suit claiming that an oil rig that had been operating for decades on the campus of Beverly Hills High School caused the students to suffer from a disproportionately high incidence of cancer. This raised concerns for Holly because a subsidiary of Frontier had previously operated the Beverly Hills drilling facility. Although the terms of the merger agreement were modified to address the situation, including broadening the representation to apply to litigation that would reasonably be expected to have a material adverse effect ("MAE") on Frontier, the court found that substantial litigation costs were not a MAE and therefore the contract could not be rescinded. More › Share
Superior Court Dismisses Case Against Member of Limited Liability Company, Finding that Member Was Not Liable for the Actions of the Limited Liability CompanyThomas v. Hobbs, C.A. No. 04C-02-010 RFS, 2005 WL 1653947 (Del. Super. Ct. Apr. 27, 2005). The Plaintiff brought an action for breach of contract against the defendant limited liability company and against the sole member of that defendant limited liability company personally. The member moved for summary judgment, arguing that she could not be held personally liable for the actions of the defendant limited liability company. The court granted the defendant member's motion. More › Share
Federal Court Dismisses Fraud And All Securities Claims Against Defendants In DaimlerChrysler AG Merger
Federal Court Dismisses Consumer Fraud And Punitive Damages Claims In Diversity Suit Under Arizona Law
Court of Chancery Decides Atypical Appraisal Proceeding in Which Parties had Stipulated to All But One Asset of Merging CompanyFinkelstein v. Liberty Digital, Inc., 2005 WL 1074364 (Del. Ch. April 25, 2005). This appraisal case involved the fair value of shares of a company, Liberty Digital, Inc., that was merged with an acquisition subsidiary of Liberty Media Corporation and survived the merger as a wholly owned subsidiary of Liberty Media. What was atypical about this appraisal case was that the parties were able to stipulate to the value of all but one of Liberty Digital's assets. More › Share
Court of Chancery Finds Change of Control Payments are Reasonable if a Majority of a Board of Directors Ceased to be "Existing Directors"
California Public Employees' Retirement System v. Coulter, 2005 WL 1074354 (Del. Ch. April 21, 2005). Defendant Lone Star Steakhouse & Saloon, Inc. agreed to make change of control payments to certain employees if a majority of its board of directors ceased to be "Existing Directors." "Existing Directors" were those directors in office at the time of the change of control agreements and those new directors who were approved by Existing Directors. The views of new directors who were not approved as Existing Directors would not be considered in determining whether subsequent new directors would be considered Existing Directors. The question is whether such a provision contravenes the teachings of Carmody v. Toll Brothers, Inc., 723 A.2d 1180 (Del. Ch.1998), which concluded that directors may not be granted distinctive voting powers unless they are authorized by the certificate of incorporation, something Lone Star's certificate of incorporation does not do. More ›Share
Court of Chancery Enforces Arbitration Clause of LLC Agreement Because Claims "Arose Under" the Agreement
CAPROC Manager, Inc. v. The Policemen's & Firemen's Retirement System of the City of Pontiac, 2005 WL 937613 (Del. Ch. April 18, 2005). This case stemmed from a dispute between shareholders of the Delaware limited liability company, CAPROC LLC, which is governed by a Limited Liability Company Agreement. Defendants sought to remove CAPROC Manager as the Managing Shareholder of CAPROC and purport to have done so by a majority shareholder vote. In response to Defendants' actions, CAPROC Manager and CAPROC brought this suit for, among other things, entry of a status quo order and a declaration under 6 Del. C. - 18-110 that CAPROC Manager remain the Managing Shareholder of CAPROC. The court granted Defendants motion to dismiss in favor of arbitration because Plaintiffs' claims were subject to arbitration under the LLC Agreement. More ›Share
Court of Chancery Finds Misappropriation of Trade Secrets and Awards Attorneys' Fees for Defendants' Willful and Malicious Misappropriation
NuCar Consulting, Inc. v. Doyle, 2005 WL 820706 (Del. Ch. April 5, 2005). Plaintiff NuCar Consulting, Inc., claimed that Defendants, former employee Timothy Doyle and Doyle's newly created company, Dealer Rewards, Inc., misappropriated certain of NuCar's trade secrets. NuCar requested that the court determine whether Defendants misappropriated NuCar's trade secrets under the Delaware Uniform Trade Secrets Act and the extent to which NuCar should receive monetary damages or injunctive relief for the alleged misappropriation. NuCar also sought an award of attorney's fees pursuant to 6 Del. C. - 2004 for Defendants' allegedly willful and malicious misappropriation. The Court granted NuCar's request for a permanent injunction prohibiting Defendants' further use of the contract used for automotive deals and found Defendants liable for $69,750 in unjust enrichment damages for their misappropriation of the potential client list. Finally, the Court found that Defendants' misappropriation was willful and malicious and awarded NuCar its reasonable attorney's fees expended on its misappropriation of trade secrets claims. More ›Share