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Albert H. Manwaring, IV

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Showing 61 posts by Albert H. Manwaring, IV.

Alleged Third-Party Beneficiary’s Contract and Alternate Unjust Enrichment Claims Survive Dismissal at the Pleadings Stage Based on Ambiguous Contract Language

CHS/Cmty. Health Sys., Inc. v. Steward Health Care Sys. LLC, C.A. No. 2019-0165-JRS (Del. Ch. Aug. 21, 2020)

A claim for unjust enrichment will not lie where there is a contract that governs the relationship between parties. Both types of claims may survive a motion to dismiss, however, if there exists a contractual ambiguity that prevents the Court of Chancery from interpreting the meaning of contract at the pleadings stage. More ›

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Chancery Holds Statutory Rights to Inspect Books and Records of a Delaware Corporation are Subject to the Internal Affairs Doctrine and Governed Exclusively by Delaware Law

JUUL Labs, Inc. v. Grove, C.A. No. 2020-0005-JTL (Del. Ch. Aug. 13, 2020)

Stockholder inspection rights are a core matter of the governance of a corporation. This decision holds that, pursuant to the internal affairs doctrine, inspection rights for a stockholder of a Delaware corporation are governed exclusively by Delaware law, not by laws of other jurisdictions, regardless of where a company’s principal place of business is located. More ›

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Chancery Determines Validity of LLC Ownership Following Fraud and Deceit in Cross-Border Control Dispute

Lynch v. Gonzalez, C.A. No. 2019-0356-MTZ (Del. Ch. July 31, 2020)

Disputes over control of a Delaware limited liability company can turn on rigorous fact-finding efforts by the Court of Chancery where issues of witness credibility may be paramount. As this decision illustrates, the Court will not permit trickery or misrepresentations to prevail in a control dispute, nor will it apply the doctrine of unclean hands to permit an undeserved windfall or countenance a fraudulent scheme. More ›

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Chancery Orders Trial to Determine Meaning of Ambiguous Post-Closing Covenants in a Stock Purchase Agreement

Posted In Chancery, Earn-Out, M&A

Schneider Nat’l Carriers, Inc. v. Kuntz, C.A. No. 2017-0711-PAF (Del. Ch. July 16, 2020)

If parties to a contract offer reasonable but conflicting interpretations of ambiguous contractual language, the Court of Chancery may deny summary judgment and order trial for purposes of weighing conflicting extrinsic evidence and witness testimony to interpret the meaning of the contractual language. More ›

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Chancery Interprets Merger Agreement Termination Fee Provision But Denies Summary Judgment to Resolve Questions of Fact in Continuing Busted Deal Litigation Between The Williams Companies and Energy Transfer

The Williams Cos., Inc. v. Energy Transfer LP, C.A. No. 12168-VCG (Del. Ch. July 2, 2020)

The Court of Chancery will enforce a merger agreement’s plain and unambiguous terms, including parties’ agreed-upon conditions for liability of a termination fee. Termination fee litigation, however, often involves critical factual determinations, such as issues of materiality or best efforts that may require a trial to develop the appropriate record to determine liability. More ›

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Chancery Interprets Contractual Language Permitting Asset Sale

AM Gen. Holdings LLC v. The Renco Grp., Inc., C.A. No. 7639-VCS (Del. Ch. June 26, 2020)

Under fundamental contract interpretation principles, the Court of Chancery will interpret a contract to give effect to specific over general contract language, and to avoid interpretations that render contractual language as surplusage. More ›

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Court of Chancery Dismisses Aiding and Abetting Claim Against NetSuite’s Fiduciaries for Role in Alleged Overpayment by Oracle

In re Oracle Corp. Derivative Litig, Consol. C.A. No. 2017-0337-SG (Del. Ch. June 22, 2020)

At the pleadings stage, a claim for aiding and abetting a breach of fiduciary duty requires that it is reasonably conceivable that the alleged aider and abettor knowingly provided substantial assistance in the breach of fiduciary duty. This decision reflects that substantial assistance in an alleged conspiracy of silence might not meet the reasonably conceivable standard if public statements and securities filings contain sufficient information about the underlying course of conduct. More ›

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Court of Chancery Sustains Aiding-and-Abetting Breach of Fiduciary Duty Claim Against Financial Advisor Based on its Conflicts of Interest in Going-Private Transaction

Morrison v. Berry, C.A. No. 12808-VCG (Del. Ch. June 1, 2020)

Even if fiduciary duty of care claims against a target company’s board of directors are exculpated, an aiding-and-abetting claim against a financial advisor to the board may survive a motion to dismiss when the advisor is alleged to have knowingly misled the board and prevented the board from running a reasonable sales process. More ›

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Corporate Opportunity Doctrine Waiver Does Not By Itself Also Constitute a Waiver of Default Fiduciary Duties under an LLC Agreement

77 Charters, Inc. v. Gould, C.A. No. 2019-0127-JRS (Del. Ch. May 18, 2020)

The Court of Chancery held that a waiver of the corporate opportunity doctrine did not by itself constitute a waiver of default fiduciary duties under an LLC agreement. 

Plaintiff 77 Charters, Inc. held non-preferred ownership interests in a joint venture. Defendant Jonathan Gould indirectly held similar non-preferred interests and managed the joint venture’s managing member. Subsequently, Gould indirectly purchased an owner’s preferred interests, and revised the joint venture’s waterfall repayment structure to provide a guaranteed, higher rate of return for preferred interests, at the expense of the residual, non-preferred interests, and reduced the standard of care for the Gould managing member. After 77 Charters filed a books and records demand and settled a related action, Gould sold the joint venture at a price that returned no funds to 77 Charters as a residual owner of non-preferred interests. 77 Charters filed contract and tort claims, and defendants moved to dismiss. More ›

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Applying Rare Intermediate Review of Forum Non Conveniens, the Delaware Superior Court Stays a Delaware Action to Permit Filing of Claims in California

GXP Capital, LLC v. Argonaut Mfg. Servs., Inc., C.A. No. N18C-07-267 PRW CCLD (Del. Super. July 1, 2020)

When evaluating a forum non conveniens challenge, Delaware has a seldom used, intermediate framework of review. Under Gramercy Emerging Markets Fund v. Allied Irish Banks, P.L.C., 173 A.3d 1033, 1044 (Del. 2017), when a prior foreign lawsuit was filed, but is no longer pending, relief in Delaware will be granted or denied based on whichever party the Cryo-Maid factors favor under the traditional forum non conveniens framework. There is no presumption in favor of a plaintiff (such as when a Delaware action is first-filed) or in favor of a defendant (such as when a foreign action is first-filed and still pending). More ›

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Delaware Superior Court Interprets Contractual Language Governing Earn-out Payment

Posted In CCLD, Earn-Out

B&C Holdings, Inc. v. Temperatsure Holdings, LLC, C.A. No. N19C-02-105 AML CCLD (Del. Super. Apr. 22, 2020).

As this decision demonstrates, Delaware courts will enforce the plain and ordinary meaning of contractual terms governing an earn-out payment, including the process by which a payment is to be calculated, noticed, and contested. More ›

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Court of Chancery Permits Targeted Jurisdictional Discovery to Seek Proof to Support Non-Frivolous Claim of Personal Jurisdiction

HM Life Ins. Co. v. Wilmington Sav. Fund Soc’y, FSB, C.A. No. 2018-0649-SG (Del. Ch. Apr. 9, 2020).

If a plaintiff has pled facts in its complaint to support a non-frivolous claim of personal jurisdiction over a defendant, the Court of Chancery may allow targeted jurisdictional discovery to seek proof that the Court has personal jurisdiction over a defendant in response to a motion to dismiss for lack of personal jurisdiction. More ›

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Minority Members Allegedly Exploited Contract Rights in Breach of Fiduciary Duties to Acquire Company Assets on the Cheap

Delaware law requires directors of a corporation to strive in good faith and on an informed basis to maximize the value of the corporation for the benefit of all of its stockholders, and not to prefer the interests of stockholders with contract rights or preferences. Consequently, where the interests of stockholders diverge from the contracts rights of other stockholders, directors and controlling stockholders may breach their fiduciary duty of loyalty by exploiting or opportunistically favoring their contract rights over the interests of the stockholders as a whole. More ›

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Chancery Shifts Attorneys’ Fees Under Bad-Faith Exception Based on False Statements in Plaintiff’s Complaint and Obstruction of Discovery

Bay Capital Finance, L.L.C. v. Barnes and Noble Education, Inc., C.A. No. 2019-0539-KSJM (Del. Ch. Mar. 30, 2020).

With some limited exceptions, the American Rule requires parties to pay their own attorneys’ fees in litigation. One exception permitting a court to shift fees is bad-faith litigation conduct. False or misleading statements by parties in their pleadings and abuse or obstruction of the discovery process are two examples of conduct that may support shifting fees. More ›

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Chancery Finds the Common Interest Doctrine Shields Communications Between a Bankruptcy Litigation Trust and its Largest Unsecured Creditor

RCS Creditor Trust v. Schorsch, C.A. No. 2017-0178-SG (Del. Ch. Mar. 20, 2020). 

The common interest doctrine shields communications with a third-party from disclosure when the common interest invoked by the party asserting the privilege is in furtherance of a joint legal strategy or objective with the third-party, and not simply for a commercial purpose. More ›

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amanwaring@morrisjames.com
T 302.888.6868
Albert H. Manwaring, IV is a partner of Morris James LLP, where he is the Chair of the Firm’s Corporate and Commercial Litigation Group and a member of the Firm’s Executive Committee …
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