Posts from September 2005

Federal Court Denies Motion to Dismiss For Failure To Join Indispensable Party Pending Discovery On Agency Issue But Dismisses Common Law Counts As Merged In Trade Secret Claim

Ethypharm S.A. France v. Bentley Pharmaceuticals, Inc., 388 F.Supp.2d 426 (D.Del. 2005). This action was brought by Ethypharm, a French pharmaceutical company and its Spanish subsidiary alleging fraud, violation of the Delaware Uniform Trade Secret Act ("DUTSA"), unjust enrichment and intentional interference with ongoing and prospective business relationships. Defendant Bentley Pharmaceuticals, Inc., a Delaware corporation, filed a Motion To Dismiss For Failure To Join An Indispensable Party, namely Belmac, a Spanish company, under Fed. R. Civ. P. 19(a) and (b) and a motion to dismiss the various common law claims. The Court treated the motions as that of summary judgment and held that: (1) the defendant's subsidiary Spanish company, Belmac, was an indispensable party; (2) DUTSA preempted the unjust enrichment and fraud claims; and (3) the business tort claims could exist independent of the misappropriation claim because they were not preempted by DUTSA. More › Share

Choice of Law Analysis: Delaware's "Continuous Trigger" Theory vs. Alabama's Reliance on the "Exposure Trigger" Theory

Shook & Fletcher Asbestos Settlement Trust v. Safety National Casualty Corp., 04C-02-087 MMJ, 2005 WL 2436193 (Del. Super. Ct. Sept. 29, 2005). Plaintiff Shook & Fletcher Asbestos Settlement Trust, as Successor to Certain Assets and Liabilities of Shook & Fletcher Insulation Company ("Shook & Fletcher"), brought an action to establish coverage for asbestos bodily injury claims under three excess liability policies issued by Safety National Casualty Company, successor to Safety Mutual Casualty Corporation ("Safety"), for policy years 1983 through 1985. The parties moved for summary judgment on various issues, including the choice of law and what act "triggered" the insurance coverage. The court found that Alabama law governed the insurance policies. The Court also determined that a conflict between Delaware and Alabama law exists because Delaware has adopted the "continuous trigger" standard. Because the choice of law analysis favored Alabama, that state's "exposure trigger" standard governed. More › Share

District Court Rules That Spanish Subsidiary of Delaware Parent Corporation is an Indispensible Party to Allegations under DUTSA

Ethypharm S.A. France v. Bentley Pharmaceuticals, Inc., 388 F. Supp. 2d 426 (D.Del. 2005). United States District Court for the District of Delaware considered motions to dismiss for failure to join an indispensable party and a motion to dismiss various common law counts are precluded by the Delaware Uniform Trade Secret Act ("DUTSA"). More › Share

Court of Chancery Denies Motion For Continued Sealing Of Portions Of Derivative Complaint

Stone v. Ritter, C.A. No. 1570-N, 2005 WL 2416365 (Del. Ch. Sept. 26, 2005). Defendants sought continued sealing of portions of derivative complaint. More › Share

Federal Court Dismisses Delaware-Based Deceptive Trade Practices Claim But Denies Dismissal Of Contract, Conversion And Enrichment Claims For Motor Yacht Charter

Worldspan, L.P. v. Ultimate Living Group, LLC., 390 F.Supp.2d 412 (D.Del. 2005). This action was brought under the Admiralty jurisdiction of the Federal Court. It claimed breach of a single-day maritime contract for charter of a motor yacht, unjust enrichment, conversion and violation of Delaware's Deceptive Trade Practices Act ("DTPA"). The Court denied defendant's motion to dismiss with respect to all but the DTPA claim which did not survive for lack of consumer standing against the seller of the chartered motor yacht services. More › Share

Court of Chancery Partially Denies Defendants' Motion To Stay Discovery Pending Resolution Of Their Motion To Dismiss

Bonham v. HBW Holdings, Inc., C.A. No. 820-N, 2005 WL 2335464 (Del. Ch. Sept. 20, 2005). Defendants moved to stay discovery pending resolution of their motion to dismiss. More › Share

Court of Chancery Enjoins Consummation Of Purchase Agreement Pending Arbitration

Flight Options Int'l, Inc. v. Flight Options, LLC, C.A. No. 1459-N, 2005 WL 2335353 (Del. Ch. Sept. 20, 2005). Plaintiff sought preliminary injunction against consummation of Purchase Agreement pending arbitration of its substantive disputes with Defendant. More › Share

District Court Finds Consumer Lacks Standing to Bring Claim under DTPA Against Seller of Chartered Motor Yacht Services

Worldspan, L.P. v. The Ultimate Living Group, LLC, 390 F.Supp.2d 412 (D.Del., 2005). United States District Court for the District of Delaware considered a motion to dismiss a claim alleging breach of a maritime contract for a one-day charter of a motor yacht, unjust enrichment, conversion and a violation of Delaware's Deceptive Trade Practices Act ("DPTA"). More › Share

Federal Court Permits Defendant's Third-Party Claim But Denies Insurer's Similar Motion As Time Barred

Federal Ins. Co. v. Lighthouse Constr., Inc., 230 F.R.D. 387 (D.Del. 2005). A subrogation action was brought by a property insurer to recover for loss incurred by a roof collapse against a building contractor. The contractor sought leave of the Court to file a third-party complaint against the erection contractor. The insurer also sought leave to file a claim against the erection contractor. The Court held that the contractor could file a third-party claim for indemnity against the erection contractor. However, the Court also ruled that the plaintiff-insurer was barred by a two-year statute of limitations from filing a third-party claim against the erection contractor. More › Share

Court of Chancery Holds Series B Director Has Immediate Right To Sit On Board

FGC Holdings Ltd. v. Teltronics, Inc., C.A. No. 883-N, 2005 WL 2334357 (Del. Ch. Sept. 14, 2005). Plaintiff FGC Holdings Limited, owner of Series B Preferred Convertible Stock in Defendant Teltronics, Inc. sought declaratory judgment that its Series B Director designee had an immediate right to sit on Teltronics' board of directors. More › Share

District Court Finds in Favor of Alleged Alter Ego Predecessor to Bankrupt Corporation

VFB LLC v. Campbell Soup Co., 2005 WL 2234606 (D.Del., September 13, 2005). Plaintiff brought an action alleging that Defendant engineered a fraudulent transfer of over $600 million from Plaintiff's predecessor in interest, Vlasic Foods International, Inc., ("VFI"), to Defendant, that Defendant controlled VFI's directors and caused them to breach their fiduciary duties, that VFI paid illegal dividends to Defendant, that Defendant was VFI's alter ego, and that Defendant's Proof of Claim against VFI's bankruptcy estate was either voidable or should be equitably subordinated. The Court dismissed the action in its entirety and found in favor of Defendant and against Plaintiff on all counts. More ›

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Court of Chancery Denies Plaintiffs' Motion To Temporarily Enjoin Annual Shareholders' Meeting Or To Amend Proxy Materials

Frenz v. Gencor Indus., Inc., C.A. No. 1204-N, 2005 WL 2266594 (Del. Ch. Sept. 9, 2005). Plaintiffs sought a temporary injunction barring the 2005 annual shareholder's meeting of Gencor Industries, Inc., or, in the alternative, to amend proxy materials to include a nominee for independent director. More › Share

Court of Chancery Allows Employer To Recover Its Confidential Information From Former Employee's Computer

Rockwell Automation, Inc. v. Kall, C.A. No. 526-N, 2005 WL 2266592 (Del. Ch. September 9, 2005). Plaintiff Rockwell Automation, Inc. filed complaint against Defendant, a former employee of Plaintiff, to obtain documents containing its confidential and proprietary information. More › Share

Chase Manhattan Mortgage Corp. v. Advanta Corp.

Chase Manhattan Mortgage Corp. v. Advanta Corp., 2005 WL 2234608(D.Del., Sept. 8, 2005). Plaintiffs filed an action alleging that Defendant Advanta engaged in (1) federal securities fraud in violation of § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j; (2) Delaware securities fraud in violation of 6 Del. C. § 7323(a)(2); (3) common law fraud; (4) negligent misrepresentation; and (5) breach of contract. More › Share