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Albert H. Manwaring, IV

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Showing 88 posts by Albert H. Manwaring, IV.

Chancery Dismisses Derivative Claims Alleging Insider Trading and Misleading Disclosures for Failure to Plead Demand Futility


In re Zimmer Biomet Hldgs., Inc. Deriv. Litig., C.A. No. 2019-0455-LWW (Del. Ch. Aug. 25, 2021)
Under Court of Chancery Rule 23.1, a stockholder-plaintiff may only bring a derivative suit on behalf of a company if the plaintiff (i) first makes a demand on the board to bring suit and is wrongfully refused, or (ii) adequately pleads that a demand would have been futile because the directors were incapable of impartially considering it. Here, the court granted the defendants’ motion to dismiss, because the stockholder-plaintiff failed to allege facts that a majority of the board of directors – who concededly were otherwise disinterested and independent – faced a substantial risk of personal liability. More ›

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Chancery Denies Motion to Dismiss, Awaits Development of Factual Record to Rule on Laches Defense

Posted In Chancery, Laches


Kim v. Coupang, LLC, C.A. No. 2020-0772-JRS (Del. Ch. Aug. 19, 2021)
If a court can rule on the affirmative defense of laches on the face of a complaint, it may grant a motion to dismiss.  As this case illustrates, however, when a laches defense cannot be determined from the complaint, resolving that defense may have to await the development of the factual record. More ›

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Applying Plain Contract Language, Chancery Awards $147 Million in Damages to Start-Up Company for Breach of Joint Venture Agreement


Symbiont.io, Inc. v. Ipreo Hldgs., LLC, C.A. No. 2019-0407-JTL (Del. Ch. Aug. 13, 2021)
Delaware is a pro-contractarian state.  When fashioning an award for a breach of contract, a Delaware court can consider: (1) the bargained-for damages remedy; (2) whether at the time of contracting the damages from a breach would be uncertain or incapable of accurate calculation; and (3) whether the amount contractually called for would be unconscionable. More ›

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Superior Court CCLD Dismisses Complaint Seeking Insurance Coverage for Appraisal Proceeding


Jarden, LLC v. ACE Am. Ins. Co., C.A. No. N20C-03-112 AML CCLD (Del. Super. July 30, 2021)
Director and corporate liability insurance coverage is determined by the specific language of the insurance policies. Last year, the Delaware Supreme Court held that an appraisal claim under 8 Del. C. § 262 was not a “securities claim” because it was not a claim for a “violation of law[,]” as required under that policy’s definition. See In re Solera Ins. Coverage Appeals, 240 A.3d 1121 (Del. 2020). This case addressed similar issues under somewhat different policy language.  More ›

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Chancery Dismisses Claims Relating to Proposed Financing of Italian Soccer Club

Posted In Chancery, LLCs


Feldman v. AS Roma SPV GP, LLC, C.A. No. 2020-0314-PAF (Del. Ch. July 22, 2021)
In Feldman, plaintiffs were minority members of a Delaware limited liability company that held a controlling interest in a premier Italian soccer club. The LLC’s managing member and its controllers and associated entities sought to exit their control investment in the club. A sales process stalled during the coronavirus pandemic. The controllers called for additional capital from existing members on a pro rata basis, either through new financing or conversion of debt, in exchange for units with priority status and liquidation preferences. The controllers approved a related amendment to the LLC agreement. Due to insufficient interest from members, the controllers instead proposed a financing transaction that included member loans with certain preferences, such as premium payments in the event of the company’s sale. Eighty percent of membership interests participated in the loans. Soon after, a sale of the club was announced. More ›

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Chancery Confirms Operation of Savings Statute and Tortious Interference Framework in Dispute Involving Fiduciaries with Competing Creditor Interests


Skye Mineral Invs., LLC v. DXS Capital (U.S.) Ltd., C.A. No. 2018-0059-JRS (Del. Ch. July 28, 2021)
Delaware’s savings statute—10 Del. C. § 8118(a)—protects claims from being time-barred where they were timely brought in an incorrect forum. Here, the Court of Chancery applied the savings statute in the context of claims alleging that, in a course of conduct dating back to 2013, majority LLC members managed the company to protect their affiliate’s status as a senior secured creditor and drive the company into bankruptcy, all to eliminate the minority members’ interests. More ›

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Court of Chancery Denies Lead Plaintiff’s Application for Incentive Fee from Overall Fee Award


Morrison v. Berry, C.A. No. 12808-VCG (Del. Ch. July 12, 2021)
Delaware courts generally do not award special compensation to lead plaintiffs in class action litigation. Delaware courts typically limit awards to out-of-pocket costs and expenses, unless lead plaintiffs take on extra—essentially, exceptional—burdens in the litigation. Submitting a modest award request does not necessarily portend success that an applicant will receive an award. More ›

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Superior Court Enforces $48 Million Liquidated Damages Provision


Smart Sand Inc. v. US Well Servs. LLC, C.A. No. N19C-01-144 PRW CCLD (Del. Super. June 11, 2021)

A liquidated damages provision is enforceable under Delaware law if: (1) damages are uncertain at the time of contracting; and (2) the liquidated damages are reasonable. Courts will examine the parties’ intent at the time of contracting in determining whether a liquidated damages provision is enforceable. More ›

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Superior Court Upholds Claims that Entities Transferred Funds in Violation of Agreements with Creditor


CIBC Bank USA v. JH Portfolio Debt Equities, LLC, C.A. No. N18C-07-130 EMD CCLD (Del. Super. June 2, 2021)

Plaintiff CIBC Bank USA (“CIBC”) entered into a credit agreement with a group of borrowers to provide them with a revolving line of credit that was secured via a security agreement, which granted CIBC a priority interest in certain collateral. Under the security agreement, the borrowers agreed not to take any actions that would materially impair the collateral, or to permit any of their subsidiaries to amend their organizational documents to adversely affect the interests of CIBC. CIBC also entered into acknowledgment agreements with the borrowers’ joint venture partners, under which those partners agreed not to amend their own agreements with the borrowers without CIBC’s consent. More ›

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Chancery Finds that Deal-Price-Less-Synergies was Best Indicator of Fair Value in Statutory Appraisal of Public Company

Posted In Appraisal, Chancery


In re Appraisal of Regal Entertainment Grp., C.A. No. 2018-0266-JTL (Del. Ch. May 13, 2021)

Recent Delaware appraisal cases have found that reliable market indicators present the best evidence of a corporation’s “fair value.” Where the deal price itself provides the best evidence, the Court will deduct from the deal price any synergies paid to the sellers. Changes in value between signing and the closing date of the merger may also be taken into account. This decision applies these principles in determining the “fair value” payable to certain stockholders of Regal Entertainment Group, a public company, following its 2018 sale to Cineworld Group, a strategic acquirer, for $23 per share. More ›

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Clean-Up Doctrine to Adjudicate Legal Claims in Chancery May Take Precedence Over Request for Jury Trial


Firststring Research, Inc. v. JSS Medical Research Inc., C.A. No. 2020-0332-KSJM (Del. Ch. May 28, 2021)

Delaware has not merged its courts of law and equity, which may have implications for a litigant seeking a jury trial. When a counterclaim-plaintiff seeks a jury trial for a claim otherwise within the subject-matter jurisdiction of the Court of Chancery, application of the clean-up doctrine might justify retaining the counterclaims in Chancery and forgoing jury-trial rights. More ›

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Board Approval of Stock Sale for Purpose of Interfering with Stockholder Voting Rights Must Have a Compelling Justification


Coster v. UIP Companies, Inc., No. 49, 2020, --- A.3d ---- (Del. June 28, 2021) (Seitz, C.J.)
The Delaware Supreme Court has recognized that the stockholder franchise is the “ideological underpinning upon which the legitimacy of the directors managerial power rests.” A proper balance between the stockholders’ right to elect directors and the board’s right to manage the company is dependent on the stockholders’ unimpeded right to vote in an election of directors. Accordingly, Delaware courts carefully scrutinize board actions that are designed for the primary purpose of interfering with or impeding the effective exercise of a stockholder vote, especially board actions designed to dilute an insurgent stockholder’s vote in an election of directors.  More ›

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Chancery Discharges Custodian in TransPerfect Litigation, Denies Contempt Motion, and Rules on Fee Dispute


In re: TransPerfect Global, Inc., C.A. No. 9700-CB (Del. Ch. Apr. 14, 2021) Elting v. Shawe, C.A. No. 10449-CB (Del. Ch. Apr. 14, 2021)

In re: TransPerfect Global, Inc., C.A. No. 9700-CB (Del. Ch. Apr. 14, 2021) Elting v. Shawe, C.A. No. 10449-CB (Del. Ch. Apr. 14, 2021)


In re: TransPerfect Global, Inc., C.A. No. 9700-CB (Del. Ch. Apr. 30, 2021) Elting v. Shawe, C.A. No. 10449-CB (Del. Ch. Apr. 30, 2021)
After seven years of multi-jurisdictional litigation stemming from an irreconcilable deadlock among the three stockholders of a profitable company, TransPerfect Global, Inc. (“TransPerfect”), the Court of Chancery discharged the court-appointed custodian of TransPerfect and denied a motion for contempt and sanctions against TransPerfect and its owner Philip Shawe. The Court subsequently granted the custodian’s fee petitions in the amount of approximately $3.2 million. More ›

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Court of Chancery Stays Action for Violation of Rule against Claim Splitting Pending Resolution of a Duplicative Federal Action


Goureau v. Lemonis, C.A. No. 2020-0486-MTZ (Del. Ch. Mar. 30, 2021)
Delaware follows the modern “transactional” view of claim splitting, which bars a plaintiff from bringing duplicative proceedings in different courts simultaneously based on different causes of action arising from the same transaction or from a common nucleus of operative facts. The rule against claim splitting is intended to avoid burdening defendants with the defense of duplicative suits in different courts, and to prevent a plaintiff from obtaining “two bites at the apple” or a potential double recovery. A plaintiff who violates this rule may face dismissal or a stay pending resolution of the duplicative action. More ›

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Superior Court Holds that a Partial Motion to Dismiss Tolls the Answering Deadline for Both Challenged and Unchallenged Claims


Unbound Partners Ltd. P’ship v. Invoy Holdings Inc., C.A. No. N20C-09-302 PRW CCLD (Del. Super. Mar. 17, 2021)
In the Delaware Superior Court, a defendant does not concede or default on, and is not required to answer, unchallenged claims in a complaint subject to a partial motion to dismiss during the pendency of the motion to dismiss. 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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