Main Menu

Alena Smith

Associate

Showing 23 posts by Alena Smith.

Chancery Upholds Challenge to TripAdvisor’s Conversion from a Delaware Corporation into a Nevada Entity


Palkon v. Maffei, C.A. 2023-0449-JTL (Del. Ch. Feb. 20, 2024)
This decision arose out of TripAdivor’s conversion from a Delaware corporation into a Nevada corporation. The company’s CEO and Chair had voting control and approved the conversion. The board did not condition the transaction on special committee approval or a majority of the minority stockholder vote. The plaintiff challenged the conversion on the grounds that the CEO and the board approved it to secure litigation protections for themselves under Nevada law more favorable than under Delaware law. More ›

Share

Chancery Addresses Pleading-Stage Arguments for Dismissal in LLC Dispute


Principal Growth Strategies LLC v. AGH Parent LLC, C.A. 2019-0431-JTL (Del. Ch. January 25, 2024)
This decision provides helpful guidance to practitioners to address pleading-stage arguments for dismissal. The plaintiff asserted fiduciary claims against the controller and manager of a Delaware LLC, who allegedly engineered an asset-swap transaction at the expense of the LLC. The Court of Chancery largely denied the motions to dismiss. More ›

Share

Applying New Rule 23.1, Chancery Establishes Leadership Structure in Fox Derivative Litigation


In re Fox Corp. Deriv. Litig., C.A. 2023-0418-JTL (Del. Ch. Dec. 29, 2023).
The newly amended Court of Chancery Rule 23.1 identifies factors for a court to consider when resolving a litigation leadership dispute. In this case, which is the first decision to apply the amended Rule, the Court of Chancery carefully balanced those factors and identified the lead plaintiff and the lead counsel. More ›

Share

Chancery Denies Request for Mandatory Preliminary Injunction to Waive Advance Notice Bylaw and Permit Director Nominees to Stand for Election


Paragon Tech., Inc. v. Cryan, C.A. 2023-1013-LWW (Del. Ch. Nov. 30, 2023).
In Delaware, a preliminary injunction is granted “sparingly and only upon a persuasive showing that it is urgently necessary, that it will result in comparatively less harm to the adverse party, and that, in the end, it is unlikely to be shown to have been issued improvidently.” A party seeking a mandatory injunction must also show entitlement to the relief it seeks as a matter of law based on undisputed facts – akin to a summary judgment standard. In this case, “with some trepidation[,]” the Court of Chancery denied a request for preliminary mandatory injunctive relief due to factual disputes concerning whether a stockholder plaintiff complied with advance notice bylaws requiring disclosure of plans to change the corporation’s business and potential conflicts of interest.   More ›

Share

Chancery Finds that Non-Settling Defendants Waived their Right to Seek a Settlement Credit Under DUCATA


In re Mindbody Inc. S’holder Litig., Consol. C.A. 2019-0442-KSJM (Del. Ch. Nov 15, 2023)
The Delaware Uniform Contribution Among Tortfeasors Act (“DUCATA”) establishes the legal framework applicable when plaintiffs release only some joint tortfeasors through settlement. DUCATA creates a right of contribution among joint tortfeasors and specifies that an ultimate damages award against non-settling defendants can be reduced by amounts received in settlement from other joint tortfeasors. In this fiduciary duty action challenging the fairness of a merger, the Court ruled that, despite a settlement of claims against certain defendants, the non-settling defendants waived their right to seek a damages reduction. More ›

Share

Chancery Evaluates Supplemental Disclosures to Determine the Corporate Benefit and Awards Plaintiffs a Proportional Fee


Allen v. Harvey, C.A. No. 2022-0248-MTZ (Del. Ch. Oct. 30, 2023)
Delaware cases provide guidance on the standard for evaluating the “corporate benefit” from supplemental disclosures in advance of a stockholder vote – and the fees that should be awarded to plaintiffs for prompting such disclosures. This case involved supplemental disclosures of potential sources of conflicts held by a special committee’s chair and advisors in advance of a merger vote. The Court held that such disclosures were not extraordinary, but they still warranted a proportional fee award. More ›

Share

Chancery Finds That Books and Records Incorporated by Reference in Complaint Demonstrate the Lack of a Valid Caremark Claim


Joel Newman v. KKR Phorm Investors, L.P., et al. C.A. No. 2022-0310-NAC (Del. Ch. Aug. 31, 2023).
At the motion to dismiss stage, Delaware courts will consider the facts alleged in the complaint as well as the documents incorporated into and integral to it. Under Court of Chancery Rule 23.1, a derivative plaintiff is entitled only to reasonable inferences drawn from the facts asserted and the documents incorporated. Here, the Court reviewed the books and records incorporated by reference in the complaint and determined that the plaintiff failed to plead demand futility. More ›

Share

Chancery Declines to Defer to the Deal Price in Appraisal Proceeding Involving a Controller Squeeze-Out Subject to MFW Protections


HBK Master Fund L.P. v. Pivotal Software Inc., C.A. No. 2020-0165-KSJM (Del. Ch. Aug. 14, 2023)
The Delaware Court of Chancery engages in an independent valuation process when determining the fair value of petitioners' stock in appraisal actions. In this case, Chancellor McCormick addresses an interesting question concerning the deal price primacy under Delaware law and ultimately rejects deference to it in controlling stockholder squeeze-out transactions subject to the MFW protections. More ›

Share

Chancery Orders Company to Produce Books and Records in Response to Section 220 Demand and Grants Stockholder Leave to Seek Fees and Costs


Myers v Academy Securities, Inc. C.A. No. 2023-0241-BWD (Del. Ch. July 27, 2023).
Under Section 220 of the Delaware General Corporation Law ("DGCL"), stockholders are entitled to corporate books and records if they make a valid demand on the company, have a proper purpose for conducting an inspection, and establish that each category sought is essential to that purpose. In this case, a Magistrate in Chancery found that the stockholder met his burden to receive books and records for the purpose of determining the value of his shares. The Court also recommended that the stockholder be permitted to seek his attorneys' fees and costs for the books and records action. More ›

Share

Supreme Court Affirms Court of Chancery’s Decision Directing “Long Dark” Company to Produce Books and Records to a Stockholder Free of Confidentiality Restrictions


Hauppauge Digital, Inc. v. Rivest, C.A. No. 2019-0848 (Del. July 10, 2023).

Under Delaware law, once a stockholder has established a proper purpose to inspect a corporation's books and records, the Court of Chancery has the discretion to impose limitations or conditions on the Section 220 production. In this case, the Supreme Court of Delaware agreed with the Court of Chancery's decision not to impose any limitations on the production. More ›

Share

Chancery Finds that Buyer Breached Purchase Agreement by Denying Sellers’ Rights to Participate in a Defense


LPPAS Representative, LLC v. ATH Holding Co. LLC, C.A. 2020-0241-KSJM / Shareholder Representative Services LLC v. ATH Holding Co. LLC, C.A. No. 2020-0443-KSJM (Del. Ch. May 2, 2023)
Delaware law recognizes parties’ ability to create a contractual right for an indemnifying party to participate in the defense of a claim. In this case, the Purchase Agreement provided the Sellers with such Participation Rights in connection with third-party claims that may give rise to Sellers’ indemnification obligations. The Court determined that the Buyer breached the Purchase Agreement by not allowing the Sellers to participate in the defense of investigations. More ›

Share

Chancery Denies Sellers’ Claim Against Buyers for Failure to Close, Finds That Sellers’ Award of “Phantom Equity” to Former Employee Breached Merger Agreement Representations


HControl Holdings LLC vs. Antin Infrastructure Partners S.A.S., C.A. 2023-0283-KSJM (Del. Ch. May 29, 2023)
In Delaware, buyers bear the burden of proving by a preponderance of the evidence their claims for breach of a merger agreement, and sellers bear the burden of proving that buyers could not exercise their termination rights because buyers were in breach of their own obligations. In this case, the Court finds for the Buyers and determines that they were entitled to terminate the deal because the Sellers breached representations in the Merger Agreement. More ›

Share

Chancery Denies Plaintiff’s Request for Advancement and Indemnification Based on the Broad Release and Finds No Success on the Merits under DGCL Section 145(c)


Kokorich v. Momentus, Inc. C.A. 2022-0722-MTZ (Del. Ch. May 15, 2023)
Delaware law establishes mandatory indemnification rights under 8 Del. C. § 145(c) where a director or officer was "successful on the merits or otherwise" in the underlying proceedings. Sections 8 Del. C. § 145 (a) and (b) are enabling provisions that explain what additional rights a corporation can offer. In this case, the Court denies the Plaintiff's advancement and indemnification claims because he released such claims against the Company and did not achieve success on the merits. More ›

Share

Chancery Orders Defendant to Pay Simple Prejudgment Interest and Reduces the Amount Because of Plaintiffs’ Delays


Ainslie v. Cantor Fitzgerald LP, C.A. No. 9436-VCZ (Del. Ch. Apr. 5, 2023)
Delaware law provides for the interest to be awarded under 6 Del. C. § 2301 in actions seeking compensatory damages, and the rate is fixed by the statute. The Court of Chancery has discretion, however, to adjust the rate and form of interest “as equity requires.” In this case, the Court awards Plaintiffs simple interest and reduces the amount because of the Plaintiffs’ inordinate delays in prosecuting the case. More ›

Share

Chancery Holds Stockholders Can Assert Disclosure Claims on Behalf of Other Stockholders but Must Do So Through a Derivative Action


New Enterprise Associates 14, L.P. vs. Rich, C.A. No. 2022-0406-JTL (Del. Ch. March 9, 2023)
Delaware law establishes that directors owe a duty of disclosure which arises as "the application in a specific context of the board's fiduciary duties…." In this case, stockholders asserted various claims against the board, including an allegation that the company's directors breached a duty of disclosure to other stockholders, which injured the plaintiffs when those stockholders were misled into approving a dilutive stock offering. This decision finds that the stockholder-plaintiffs can assert such a cause of action but that the resulting claim is derivative. More ›

Share
asmith@morrisjames.com
T 302.888.6812
Alena Smith is an attorney in the Corporate and Commercial Litigation Practice Group. She practices in the areas of business litigation, chancery litigation, and commercial …
View Bio
Back to Page