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Showing 11 posts from August 2005.

Federal Court Denies Remand Motion Despite Delaware Dissolution and Fiduciary Claims

Posted In Jurisdiction
Polak v. Kobayashi, No. Civ. A. 05-330 JJF, 2005 WL 2008306 (D.Del. Aug. 22, 2005). Plaintiff filed a motion to remand a matter involving several Delaware state law claims, alleging lack of subject matter jurisdiction and because complete diversity of citizenship did not exist. Alternatively, plaintiff claimed that the Court should decline to exercise jurisdiction on the Burford abstention doctrine. Defendant filed a motion to remove the case pursuant to 28 U.S.C. §§ 1441 and 1446 to the District Court for the District of Hawaii. The court denied the motion to remand. More › Share

Federal Court Enforces Foreign Arbitral Award Without Permitting Counterclaim

Posted In Arbitration
China Three Gorges Project Corp. v. Rotec Industries, Inc., No. Civ. A. 04-1510 JJF, 2005 WL 1813025 (D.Del. Aug. 2, 2005). This action involves a Petition to Confirm a Foreign Arbitral Award filed by Petitioner China Three Gorges Project Corporation ("China Gorges") and respondent's Motion to Dismiss or in The Alternative, To Modify The Foreign Arbitral Award. The Court granted the petition to confirm the award and denied the respondent's motions. More › Share

Court of Chancery Grants Motion to Amend Arguments in Brief On Eve of Oral Argument in Exchange for Payment of Attorneys' Fees

Lillis v. AT&T Corp., C.A. No. 717-N, 2005 WL 2149748 (Del. Ch. Aug. 23, 2005). Plaintiffs, former owners of options to purchase shares in AT&T Wireless Services, Inc. ("Wireless"), brought suit against Wireless and AT&T Corp., seeking compensation for the value of their options, which were canceled when Wireless merged with Cingular Wireless Corp. Plaintiffs were officers and directors of MediaOne Group, Inc., a broadband telecommunications company, which AT&T purchased. At MediaOne, plaintiffs were to receive stock options as part of their compensation under the 1994 Stock Plan. After AT&T acquired MediaOne, AT&T exchanged the MediaOne options for new options in AT&T and, subsequently, for options in Wireless. More › Share

Court of Chancery Finds Proper Purpose in Books and Records Case Where Beneficial Owners Demonstrate that CEO Received Excessive Compensation

Haywood v. Ambase Corp., C.A. No. 342-N, 2005 WL 2130614 (Del. Ch. Aug. 22, 2005). Plaintiffs Haywood and Cronin were beneficial owners of defendant AmBase Corporation's ("AmBase") common stock. Ambase was a publicly held Delaware corporation, and its primary purpose at the time was to pursue pending litigation against the United States government based on the impact of the Financial Institutions Reform, Recovery and Enforcement Act. Richard Bianco was the chairman and chief executive officer of AmBase. More › Share

In Appraisal Action, Court of Chancery Employs Discounted Cash Flow and Comparable Companies Methods To Value Shares Purchased by 98% Owner in Cash-Out Merger

Posted In Appraisal
Andaloro v. PFPC Worldwide, Inc., C.A. No. 20289, 2005 WL 2045640 (Del. Ch. Aug. 19, 2005). Andaloro v. PFPC Worldwide, Inc., C.A. No. 20336, 2005 WL 2045640 (Del. Ch. Aug. 19, 2005). This was a consolidated appraisal and equitable fiduciary duty action (the court did not address the fiduciary claim in this opinion). It arose out of a merger in which PFPC Worldwide, Inc. ("PFPC"), was acquired by its parent PFPC Holding Corp. ("Holding"), which held over 98% of PFPC's stock before the merger. (The merger was also approved by PFPC's ultimate parent and Holding's immediate parent, PNC Financial Services Group, Inc. ("PNC").) The merger resulted in the elimination of the minority shareholders' position in PFPC for $34.26 per share. More › Share

Superior Court Prevents AT&T From Voluntarily Dismissing the Majority of Defendants

AT&T Wireless Services, Inc. v. Federal Ins. Co., 2005 WL 2155695 (Del. Super. Ct. Aug. 18, 2005). The Plaintiff filed a notice of partial dismissal in an attempt to dismiss certain defendants. The defendants who were purportedly dismissed moved to quash the notice of dismissal. The court found that one defendant insurer could be dismissed because the entire action was being voluntarily dismissed. However, the court granted the motion to quash as to the other defendant because the dismissal only eliminated certain claims as opposed to the entire action. Plaintiff also sought leave of the court to dismiss a second group of defendants pursuant to Rule 41(a)(2). The court denied this motion. More › Share

Court of Chancery Dissolves LLC that is Deadlocked and was Arguably Formed as Part of Scheme to Deceive Investors

In re: Silver Leaf, LLC, C.A. No. 20611, 2005 WL 2045691 (Del. Ch. Aug. 18, 2005). Plaintiff and the defendants formed Silver Leaf, LLC ("Silver Leaf") to market a new vending machine that was to produce French fries. In connection with the formation of the entity, the parties signed a stock purchase agreement and a sales and marketing agreement with Tasty Fries, which owned the manufacturing rights to the vending machines. After the relationship between the parties deteriorated, Tasty Fries terminated the sales and marketing agreement over a dispute related to the stock purchase agreement. More › Share

Court of Chancery Holds that Purchasers of Small Business Failed to Prove that Sellers Defrauded Them

Posted In Business Torts
Homan v. Turoczy, C.A. No. 19220, 2005 WL 2000756 (Del. Ch. Aug. 12, 2005). Plaintiffs bought a small printing and copying business from defendants, who ran the business successfully for 19 years. However, plaintiffs were not so successful. A year after the sale they filed for bankruptcy, closed down the business, and liquidated the company's assets. In their complaint, plaintiffs alleged that the defendants and their agent fraudulently misrepresented the condition of the business and thus sought rescission of the sales agreement. The court held that by waiting over a year before suing, the plaintiffs forfeited any right to seek actual rescission. As a result, the court's opinion after trial only considered whether plaintiffs were entitled to an award of damages for fraud. More › Share

Court of Chancery Refuses to Dismiss Claims for Tortious Interference, Unfair Trade Practices, and Fraudulent Misrepresentation in Connection with Sale of Business

Griffin Corp. Services v. Jacobs, C.A. No. 396-N, 2005 WL 2000775 (Del. Ch. Aug. 11, 2005). Counterclaim plaintiffs Jacobs, Dobrzynski, Stewart, and Stewart Management Company ("SMC") asserted that Griffin Corporate Services ("Griffin") and other counterclaim defendants interfered with their existing contract and prospective business relationships and engaged in common law and statutory unfair trade practices. They also asserted that Griffin breached its confidentiality agreement with SMC and made misrepresentations to SMC. The counterclaim defendants moved to dismiss. More › Share

Federal Court Dismisses "Covered Class Action" Involving Covered Securities" Action That Did Not Trigger The Delaware Carve-Out Under SLUSA

Posted In Securities
Golub v. Hilb, Rogal & Hobbs Co., 379 F.Supp.2d 639 (D.Del. 2005). Ninety-Nine shareholders represented by members of Hobb Group, L.L.C., and Hobbs IRA Corporation ("Sellers") entered into an agreement with defendant to sell its outstanding membership interest units for $270,000,000. Sellers alleged that the defendant company had not disclosed information that it knew before the closing. The defendant company moved to dismiss the Complaint. The Court granted the motion because the Complaint did not fall into the Delaware carve-out and therefore required dismissal. More › Share

Superior Court Finds that Both Parties to a Contract Must Contractually State an Intention to Benefit a Third Party to Create a Third Party Beneficiary

Street Search Partners, L.P. v. Ricon Int'l, L.L.C., C.A. No. 04C-09-156 PLA, 2005 WL 1953094 (Del. Super. Ct. Aug. 1, 2005). The plaintiff brought a breach of contract action against two defendants on the theory that the plaintiff was a third party beneficiary to the contract between the defendants. One of the defendants moved to dismiss the suit for failure to state a claim. The court determined that one defendant subjectively intended for the plaintiff to benefit from the contract. However, the court determined that the other contracting party did not intend to benefit the plaintiff. Furthermore, there was no evidence from the contract that the parties intended for the plaintiff to be a beneficiary. Consequently, the court dismissed the plaintiff's claims that were based on it being a third party beneficiary to the contract. More › Share
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