Main Menu

Showing 96 posts in Chancery.

Chancery Applies Forum Non Conveniens Analysis to Grant Partial Stay of Dispute Between LLCs and Former Manager

Posted In Chancery, Forum Non Conveniens

AG Resource Holdings, LLC v. Thomas Badford Terral, C.A. No. 2020-0850-JRS (Feb. 10, 2021)

In AG Resource, the Court of Chancery was tasked with determining whether it or a Louisiana state court should resolve similar claims filed at nearly the same time in each forum. Affording neither suit first-filed status, the Court applied a forum non conveniens analysis using the Cryo-Maid factors and split the claims, finding that Louisiana had a greater interest in resolving claims relating to provisions in an employment agreement, but Delaware had a greater interest in resolving a claim implicating the internal affairs of a Delaware LLC. More ›

Share

Chancery Applies Unclean Hands Doctrine to Prevent a Trustee from Rescinding the Decanting of a Trust

Posted In Chancery, Trusts & Estates

In the Matter of: The Niki and Darren Irrevocable Trust and the N and D Delaware Irrevocable Trust, C.A. No. 2019-0302-SG (Del. Ch. Feb. 4, 2021)

Delaware’s decanting statute allows a trustee to “decant” a trust by “pouring” the corpus out into a new modified trust. But, to do so, a trustee must have been able to invade the trust principal under the original trust’s terms, and the second trust’s terms must be substantially the same in its treatment of beneficiaries. More ›

Share

Chancery Sustains Claims Against Target’s CEO, Target’s Financial Advisor, and Acquirer for Allegedly Covertly Steering Merger Bidding Process

Firefighters’ Pension System of The City of Kansas City, Missouri Trust v. Presidio, Inc., C.A. No. 2019-0839-JTL (Del. Ch. Jan. 29, 2021)

Presidio illustrates potential pitfalls for parties in the M&A process, including executives managing personal interests in potential post-transaction employment while negotiating a deal, financial advisors with future business interests in mind while controlling competitive offer information, and acquirers potentially aware of a bidding process being steered in their direction. More ›

Share

Chancery Construes Notice Provisions Associated With Escrowed Funds Under an Asset Purchase Agreement

Posted In Chancery, Escrow, M&A

Schillinger Genetics, Inc. v. Benson Hill Seeds, Inc., C.A. No. 2020-0260-MTZ (Del. Ch. Feb. 1, 2021)

Delaware courts will apply the plain terms of an unambiguous asset purchase agreement (“APA”), including its provisions governing notices and the release of escrowed funds. More ›

Share

Delaware Choice of Law Provision in Stock Purchase Agreement Does Not Eliminate Claim for Fraud under California Securities Act

Posted In Business Torts, Chancery, Choice of Law

Swipe Acquisition Corp. v. Krauss, C.A. No. 2019-0509-PAF (Del. Ch. Jan. 28, 2021)

This decision concerned a motion to dismiss a claim for fraud under the California Securities Act, which the defendants argued was waived by a choice of law provision in the parties’ stock purchase agreement (“SPA”) indicating that “all claims or causes of action (whether in contract, tort or statute) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement … shall be governed by, and enforced in accordance with, the internal laws of the State of Delaware, including its statutes of limitations.” More ›

Share

Chancery Dismisses Stockholder’s Claim that Directors Provided Materially-Deficient Notice of their Intent to Use Equity Bonus Plan to Reward Past Performance

Posted In Chancery, Disclosure Claims, Fiduciary Duty

Pascal v. Czerwinski, C.A. No. 2020-0320-SG (Del. Ch. Dec. 16, 2020)

This decision concerned a motion to dismiss a stockholder’s direct claim that Director-Defendants breached their duties by providing a materially-deficient proxy statement advocating adoption of an equity incentive plan (“EIP”) that ultimately allowed Defendants to award themselves bonuses. As a result of the alleged deficiencies, Plaintiffs sought invalidation of the entire EIP. More ›

Share

Chancery Modifies Confidentiality Order to Permit Assertion of Plenary Claims in Appraisal Action

Posted In Appraisal, Chancery, Confidentiality

Harris v. Harris FRC Corp., C.A. No. 2019-0736-JTL (Del. Ch. Jan. 7, 2021)
Under Rule 5.1, the Court of Chancery may enter a confidentiality order upon a showing of good cause that such an order is necessary to protect against disclosure of sensitive, non-public information. But Rule 5.1 does not set an express standard for later modification of the order. In this case, the Court of Chancery clarified that the standard for modifying a confidentiality order is the same as for entering one: good cause shown, taking into account related factors including the parties’ reliance on the existing order and the potential prejudice from modification. More ›

Share

Plaintiff’s Failure to Plead Demand Futility Leads to Dismissal of Caremark Claims Against MoneyGram Directors

Richardson v. Clark, C.A. No. 2019-1015-SG (Del. Ch. Dec. 31, 2020)
Under Court of Chancery Rule 23.1, a derivative plaintiff’s must make a demand on the corporation’s board of directors unless the plaintiff can plead particular facts to establish that demand was excused. Although demand may be excused where a majority of the board faces a substantial likelihood of personal liability, merely alleging wrongdoing by the corporation’s directors will not suffice. More ›

Share

Chancery Orders Production of Privileged Emails Transmitted Using Third-Party Accounts

Posted In Chancery, E-Discovery, Privilege

In re WeWork Litigation, Consol. C.A. No. 2020-0258-AGB (Del. Ch. Dec. 22, 2020)

This Court of Chancery discovery ruling illustrates the risks associated with directors and officers using non-company email accounts to communicate about company business, particularly as it relates to confidentiality and the attorney-client privilege. More ›

Share

Chancery Addresses Standing Defense And Control Allegations In Abandoned Tender Offer Dispute

Posted In Chancery, Controlling Stockholder, Standing

In re WeWork Litig., C.A. No. 2020-0258-AGB (Del. Ch. Dec. 14, 2020)

This decision is the companion to another dismissal opinion in same case of the same date and arising out of the same abandoned multi-step tender offer transaction between WeCompany (“WeWork” or the “Company”) and SoftBank Group Corp. and Vision Fund (AIV M1) L.P. (together, “Softbank”). A summary of the companion opinion is available hereMore ›

Share

Chancery Addresses Authority of Executives to Remove Managers of Affiliate Entities

Roccia v. Mugica, C.A. No. 2020-0641-MTZ (Del. Ch. Dec. 29, 2020)

The inherent authority of officers of Delaware companies generally extends to powers in the usual and ordinary course of the relevant company’s business. Officers otherwise gain authority through either express grants from the company’s governing body or implied grants based on past practice. In the LLC context, sources of an officer’s actual authority may include the LLC’s operating agreement and any employment agreement. In this decision, the Court of Chancery held that the plain language of a Delaware LLC’s operating agreement and the relevant employment agreement did not grant the President and CEO of a parent-entity the authority to act on the parent’s behalf to remove a member of the board of managers of a sub-entity. More ›

Share

Chancery Declines to Apply Stockholder Approval Requirement of DGCL § 271 to Agreement to Transfer All Assets in Lieu of Foreclosure

Posted In Chancery, Control Disputes, DGCL, M&A

Stream TV Networks, Inc. v. SeeCubic, Inc., C.A. No. 2020-0310-JTL (Del. Ch. Dec. 8, 2020)

In this decision, the Delaware Court of Chancery reviews the history of requirements to approve transfers of all assets both at common law and under the Delaware General Corporation Law, and concludes that Delaware law does not require majority stockholder approval for an insolvent corporation’s transfer of assets to a secured creditor in lieu of a foreclosure. The Court thus rejected an attempt by the corporation’s founders, who owned a majority of its stock, to invalidate the corporation’s agreement in that regard.  More ›

Share

Chancery Resolves Dispute Between Competing Special Committees, Finding Second Committee Could Not Voluntarily Dismiss Suit Brought By The First Committee Under The Zapata Framework

In re WeWork Litigation, C.A. No. 2020-0258-AGB (Del. Ch. Dec. 14, 2020)

This decision addresses a matter of first impression arising out of a dispute pitting two special committees of the same company, WeCompany (“WeWork” or the “Company”), against one another over control of a lawsuit on the Company’s behalf. The lawsuit involved claims against the Company’s putative controlling shareholders, SoftBank Group Corp. and SoftBank Vision Fund (AIV MI) L.P. (together, “SoftBank”), for abandoning a multi-step agreement by which SoftBank committed to a $3 billion tender offer for WeWork’s shares in addition to providing equity and debt financing (the “Transaction”). The same two-member committee that negotiated the Transaction on the Company’s behalf (the “Transaction Committee”), initiated the lawsuit with the support of the Company’s management (including WeWork’s Chief Legal Officer) as well as the Company’s outside counsel, Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”) More ›

Share

Chancery Analogizes to Bylaw Provisions to Conclude that Noteholder was Bound to Forum Selection Clause in Amended Note

Posted In Chancery, Forum Non Conveniens

Mack v. Rev Worldwide, Inc., C.A. No. 2019-0123-MTZ (Del. Ch. Dec. 30, 2020)

Plaintiff loaned defendant $2.5 million through six secured convertible promissory notes. Each of the notes contained an exclusive forum selection clause requiring any disputes be litigated in Texas. They also contained a “Waiver and Amendment” provision which allowed the notes to be amended or modified upon the consent of the borrower and a majority in interest of the investors in the notes. In 2019, exercising the Waiver and Amendment provision, the defendant borrower, with the consent of the majority of noteholders, consolidated the outstanding notes and amended certain provisions. The new amended note contained the same exclusive forum provision requiring that disputes be litigated in Texas, but the plaintiff noteholder nonetheless asserted default and other claims arising from the notes in the Delaware Court of Chancery. Defendant borrower moved to dismiss, and the plaintiff countered that it had not executed or otherwise consented to the terms of new amended note, including its forum selection provision. More ›

Share

Chancery Excuses Demand Where General Partner and its Controller Faced Substantial Likelihood of Liability

Lipman v. GBP Capital Holdings, LLC, C.A. No. 2020-0054-SG (Del. Ch. Nov. 18, 2020)

In derivative actions, a plaintiff must either make a pre-suit demand or plead with particularity why demand should be excused. As this case shows, the facts that must be pled differ when the demand would be made upon the general partner in a limited partnership as opposed to a corporate board. More ›

Share

awards

  • US News Best Law Firms
  • JD Supra Readers Choice Award
  • Delaware Today Top Lawyers
  • Super Lawyers
Back to Page