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Court Of Chancery Ropes In Florida Corporation On Conspiracy Theory For Jurisdictional Nexus

Benihana of Tokyo, Inc. v. Benihana, Inc., et al., C.A. No. 550-N (Del. Ch. Feb. 28, 2005). This case deals with several motions to dismiss on several grounds, the upholding of personal jurisdiction under a conspiracy or aiding/abetting theory and plaintiff's request for a declaratory judgment. Plaintiff ("BOT"), a New York corporation, sought a declaratory judgment that to issue convertible preferred stock violated Benihana's charter and sought rescission of the transaction predicated on claims of breach of fiduciary duties. All defendants, including their directors, filed motions to dismiss. The court denied the motions. In particular, the court denied dismissal of the claims on "lack of personal jurisdiction," "insufficiency of process" and "failure to join an indispensable party" grounds. The court approved jurisdiction under Delaware's long arm statute, 10 Del. C. §3104 (c) and the International Shoe "due process" tests under a "conspiracy" or "aiding and abetting" theory. The court observed that the nexus was supplied by BOT's allegations that "BFC caused Benihana to take action in Delaware on BFC's behalf . . . [thus] BFC may be deemed to have transacted business 'through an agent' in Delaware." Share
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