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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.

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Showing 4 posts from January 2018.

Delaware Supreme Court Gives Preclusive Affect To Prior Dismissal In Wal-Mart Derivative Litigation

California State Teachers Retirement System v. Alvarez, No. 295, 2016 (Del. Jan. 25, 2018)

This is an important decision clarifying the rules regarding the preclusive effect a dismissal of a derivative suit may have on a similar suit pending or brought later in Delaware.  This litigation saga involving a bribery scandal at Wal-Mart took some interesting turns, ping-ponging between the Delaware Court of Chancery and the Delaware Supreme Court.  More ›

Chancery Greenlights Use of Books and Records Demands to Buttress Post-'Corwin' M&A Challenges

Stockholder M&A challenges in the Delaware Court of Chancery have declined in the wake of the well-known Trulia (and its federal corollary Walgreens) and Corwin decisions, which respectively reduced incentives for pre-closing M&A challenges by outlining a strict standard of review for disclosure-only settlements; and confirmed that, regardless of whether the process at issue complied with Revlon, transactions approved by an informed and uncoerced stockholder vote are subject to the protections of the business judgment rule.  Against this backdrop, the Court’s year-end decision in Lavin v. West Corp., C.A. No. 2017-0547-JRS, 2017 WL 6728702 (Del. Ch. Dec. 29, 2017), is of note, as it endorses the use of books and records demands to help stockholders meet Corwin’s pleading demands. More ›

Court Of Chancery Explains Inspection Rights Under An LLC Agreement

Aloha Power Company LLC v. Regenesis Power LLC, C.A. 12697-VCMR (Dec. 22, 2017)

This books and records decision addresses inspection rights granted under an LLC agreement. It also is useful as a reminder that a mere decline in an entity’s performance is not a sufficient proper purpose supporting inspection.  While the “credible basis” standard for suspecting mismanagement is low, it is not that low.

Court Of Chancery Explains When A Prediction Is A Misleading Disclosure

Posted In Fiduciary Duty

Chatham Asset Management LLC v. Papanier, C.A. No. 2017-0088-AGB (Dec. 22, 2017)

It is often said that a mere prediction of some future event cannot be misleading because such predictions are speculations that cannot be relied upon. However, as this decision points out, stating something is “possible” when it is impossible is misleading and actionable as a disclosure violation.