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

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Photo of Delaware Business Litigation Report Matthew F. Lintner
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mlintner@morrisjames.com
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Matthew F. Lintner is a partner in the firm's Corporate and Commercial Litigation Group. He has extensive experience litigating complex corporate, commercial, and fiduciary …

Showing 2 posts by Matthew F. Lintner.

Chancery Address Valuation Issues Arising From LLC Member’s Withdrawal

Posted In Valuation

Smith v. Promontory Financial Group, LLC, C.A. No. 11255-VCG (Del. Ch. April 30, 2019).

In the limited liability company context, LLC agreements sometimes provide for a buyout of a member deciding to withdraw its investment.  Coming in many forms, such provisions give rise to potential valuation issues.  This decision arises in that setting.

In a decision driven by unique facts, the Court of Chancery relied upon the plaintiff's proposed valuation from an unconsummated deal to value a professional services company with “erratic and sparse” cash flows. The Court concluded that the company’s business model rendered both an asset accumulation method and a discounted cash flow method inappropriate. More ›

Decade-long Failure to Pursue Claim for Founder’s Shares Results in Laches Dismissal

Forman v. CentrifyHealth, Inc., C.A. No. 2018-0287-JRS (Del. Ch. Apr. 25, 2019)

As the Court of Chancery observes in this opinion, “equity favors the vigilant, not those who slumber on their rights.”  Here, the Court applies the equitable doctrine of “laches” to dismiss claims brought beyond the statute of limitations at law, at which point prejudice to the defendant is presumed.

The plaintiff, a former director, brought suit in 2017 claiming that in 2005, he was promised but never received certain founder’s shares, and later, under a 2006 stock option plan, he was promised additional shares.  Although the Court of Chancery recognized that a laches defense is fact intensive, the Court determined that it was clear from the face of the complaint that the plaintiff was aware by 2007 that the company denied his claim to any founder’s shares, including because he was provided capitalization tables not reflecting any such shares.  More ›