Posts in Laches

Chancery Dismisses Complaint Against LLC Directors Based on Specific Terms of the Operating Agreement and Laches

Erisman v. Zaitsev, C.A. No. 2020-0903-JRS (Del. Ch. Dec. 29, 2021)
Under Delaware law, parties to limited liability company agreements have the freedom to alter or eliminate fiduciary duties, and to eliminate liability for breaches of contractual and fiduciary duties. Here, the Court of Chancery dismissed LLC members’ complaint because, among other reasons, the Operating Agreement (i) replaced default common law fiduciary duties with a contractual standard that limited director liability to claims in which directors did not rely on the terms of the Operating Agreement in good faith; and (ii) it further provided that the directors were not liable for money damages unless they failed to act in good faith, engaged in intentional misconduct or a knowing violation of the law, derived an improper personal benefit, or breached their duty of loyalty to the company. More ›

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Chancery Denies Motion to Dismiss, Awaits Development of Factual Record to Rule on Laches Defense

Kim v. Coupang, LLC, C.A. No. 2020-0772-JRS (Del. Ch. Aug. 19, 2021)
If a court can rule on the affirmative defense of laches on the face of a complaint, it may grant a motion to dismiss.  As this case illustrates, however, when a laches defense cannot be determined from the complaint, resolving that defense may have to await the development of the factual record. More ›

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Chancery Confirms Operation of Savings Statute and Tortious Interference Framework in Dispute Involving Fiduciaries with Competing Creditor Interests

Skye Mineral Invs., LLC v. DXS Capital (U.S.) Ltd., C.A. No. 2018-0059-JRS (Del. Ch. July 28, 2021)
Delaware’s savings statute—10 Del. C. § 8118(a)—protects claims from being time-barred where they were timely brought in an incorrect forum. Here, the Court of Chancery applied the savings statute in the context of claims alleging that, in a course of conduct dating back to 2013, majority LLC members managed the company to protect their affiliate’s status as a senior secured creditor and drive the company into bankruptcy, all to eliminate the minority members’ interests. More ›

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Section 225 Action Filed Eight Months After Removal Barred by Laches

Simple Global, Inc. v. Banasik, C.A. No. 2018-0809-PAF (Del. Ch. June 24, 2021)
Under Delaware law, a director or officer who disputes her removal as such may be subject to equitable defenses if she does not proceed promptly to contest it.  Here, plaintiff Simple Global was owned by three stockholders, one of which, defendant Banasik, was removed as a director and officer by the others in June 2018.  In November 2018, Simple Global sued Banasik for breach of fiduciary duty, to which Banasik responded in April 2019 by, among other things, filing a counterclaim under Section 225 of the DGCL asserting he was not properly removed as a director.  More ›

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Chancery Denies Sellers’ Request for Dismissal, Finding That Fraud Claims Were Timely Filed and Properly Pled

Agspring Holdco, LLC v. NGP X US Holdings, L.P., C.A. No. 2019-0567-AGB (Del. Ch. July 30, 2020)

This opinion concerns a buyer’s attempt to plead fraud in connection the acquisition of a business. The Court denied in the main the defendants’ motion to dismiss the fraud claims brought in connection with private equity firm American Infrastructure Partners’ (the “Buyer”) $300 million acquisition of Agspring LLC (the “Company”), which was then almost entirely owned by NGP X US Holdings, LLP (“NGP”), another private equity firm.  More ›

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Chancery Applies Borrowing Statute, Dismisses Plaintiff’s Fraud Claims as Time-Barred

CHC Investments, LLC v. FirstSun Capital Bancorp, C.A. No. 2018-0353-KSJM, (Del. Ch. Mar. 23, 2020).

On a motion to dismiss plaintiff’s claims for fraud, the Delaware Court of Chancery applied Delaware’s three-year statutory limitations period rather than Texas’s four-year period and dismissed plaintiff’s claims as time-barred. Narrowly interpreting the Delaware Supreme Court’s holding in Saudi Basic Indus. Corp. v. Mobil Yanbu Petrochemical Co., 866 A.2d 1, 16-18 (Del. 2005), the Court found that, except in circumstances where a party is forced to bring claims in Delaware, under Delaware’s “borrowing statute,” the shorter of Delaware’s statute of limitations and that of the foreign jurisdiction will apply.  More ›

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