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

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Showing 6 posts in Fraud.

Superior Court CCLD Addresses Pleading Standards for Trade Secret, Fraud and Implied Covenant Claims

Brightstar Corp. v. PCS Wireless, LLC, C.A. No. N18C-10-250 PRW CCLD (Del. Super. Ct. Aug. 7, 2019).

Brightstar and PCS, two competitors that distribute new and pre-owned mobile devices, entered into a buy/sell agreement as part of negotiations for a proposed merger and strategic alliance.  Under the buy/sell agreement, PCS purchased mobile devices from Brightstar for re-sale to third parties and was subject to a non-circumvention provision that restricted PCS from purchasing these devices from certain other suppliers.  After their merger discussions faltered, PCS terminated the agreement, and Brightstar brought suit for unpaid amounts and alleged misappropriation of pricing information.  PCS counterclaimed for, inter alia, fraud and breach of the implied covenant of good faith and fair dealing. More ›

Chancery Examines Framework of Fiduciary Disclosure Obligations in Soliciting Private Investments

Posted In Disclosures, Fiduciary Duty, Fraud

Clark v. Davenport, C.A. No. 2017-0839-JTL (Del. Ch. July 18, 2019). 

This opinion decides a motion to dismiss fraud and related tort claims arising out of various investments against a former director and CEO and an employee of a controlling stockholder.

When the investments turned out to be worthless, the plaintiff investor brought suit for breach of fiduciary duties and common law fraud arising from information that the investor received before investing in a company controlled by a business colleague and friend.  More ›

Delaware Superior Court Explains When Fraud Claims May Survive An Integration Clause

Posted In Fraud

Flowshare, LLC v. Georesults Inc., C.A. N17C-07-227 EMD CCLD (July 25, 2018)

This decision explains when a fraud claim survives a motion to dismiss that is based on the argument that an integration clause in a contract precludes reliance on extra contractual representations. The short answer is that the contract must specifically deny reliance on those statements before the fraud claim is precluded.

Court of Chancery Addresses Scope and Effect of Anti-Reliance Clauses

Posted In Fraud

Chyronhego Corporation v. Wight, C.A. No. 2017-0548-SG (Del. Ch. July 31, 2018)

One of the more often litigated questions in Delaware is whether an integration or anti-reliance clause in an agreement bars claims for fraud based on alleged misrepresentations outside of those in the contract itself. This decision harmonizes the extensive case law on that subject. It also is useful in deciding when the actual representations in the agreement are sufficient to support a claim of fraud.

Superior Court Explains When Fraud Claims May be Brought

Posted In Fraud

Novipax Holdings LLC v. Sealed Air Corporation, No. N17C-03-1682 (November 28, 2017)

This is an interesting decision because it explains: (1) when a fraud claim may be brought despite anti-reliance provisions in a contract and (2) when a fraud claim does not overlap and is thereby precluded by a contract claim based on similar facts. In each case, the inquiry is very fact specific.

Court Of Chancery Explains Fraud Pleading Standards

Posted In Fraud

Sparton Corporation v. O’Neil, C.A. 12403-VCMR (August 9, 2017)

This decision explains what needs to be alleged to state a fraud claim. More particularly, it is not enough to just generally allege that a defendant must have had knowledge of someone else’s false statement.