Delaware Business Litigation Report

Court of Chancery Finds Plaintiff Caused Transaction to be Withdrawn

Kuo v. Genius Products Inc., C.A. 3329-CC (July 30, 2009).

It is settled law that, when a corporation abandons a proposed corporate transaction after a suit is filed, to avoid payment of fees, the corporation must prove the litigation was not the cause of the transaction's termination. That burden was not carried here and, as a result, fees were awarded. The decision is also interesting because it shows that it is possible that the amount of the fees will be reduced when there is some doubt the litigation was the sole cause of the end of the transaction.

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