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Showing 5 posts in Control Disputes.

Chancery Addresses Authority of Executives to Remove Managers of Affiliate Entities

Posted In Chancery, Control Disputes, Directors and Officers

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 ›

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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 ›

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

Posted In Chancery, Control Disputes

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 Declines to Apply Status Quo Order to Prevent Sale of Litigant’s Personal Interest in Indirect Foreign Subsidiary of Delaware LLC

Posted In Chancery, Control Disputes, Personal Jurisdiction

Carlos Eduardo Lorefice Lynch v. R. Angel Gonzalez Gonzalez, C.A. No. 2019-0356-MTZ (Del. Ch. June 22, 2020)

In this control dispute, the Delaware Court of Chancery denied a motion to amend a status quo order, finding that the proposed amendment would require the Court to enforce orders beyond its jurisdictional purview.  More ›

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Delaware Court of Chancery Declares Board Action Void For Equitable Reasons, Finding Corporate Directors Deceived Other Board Members into Attending Board Meeting

Posted In Control Disputes

Palisades Growth Capital II, L.P. v. Bäcker, C.A. No. 2019-0931-JRS (Del. Ch. Mar. 26, 2020).

In keeping with longstanding Delaware precedent, the Delaware Court of Chancery recently held that it may void an action by a board of directors – even where the action is not otherwise in violation of the corporate charter or the Delaware General Corporation Law (“DGCL”) – when equity so requires. More ›

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