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Court of Chancery Extends Jurisdiction to Parent Entity

Posted In Jurisdiction

Vichi v. Koninklijke Philips Electronics N.V., C.A. 2578-VCP (December 1, 2009)

This decision provides a full review of the basis for jurisdiction over foreign entities by the Court of Chancery. This includes a discussion of the limits of the conspiracy theory of jurisdiction.

Most interestingly, the Court holds that a parent company may be subject to Delaware jurisdiction because of the acts of agents of its subsidiaries, at least when those agents had the apparent authority to act for the parent. That may occur when, as here, the parent entity touts the business interrelationship of it and all its subsidiaries. This is another example of getting not wanting what you wished for and a caution against ignoring the separateness of corporate entities in how they do business.

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