Delaware Business Litigation Report

Court Of Chancery Stays Section 273 Case

McElroy v Schornstein, C.A. 7233-CS (June 6, 2012)

It is often said that the Court of Chancery will not stay or dismiss an action filed under one of the statutory provisions for summary adjudication of a claim, such as to decide a proxy contest,  because there is prior litigation filed elsewhere.  That is generally true, but not always and this decision involves 1 of the rare exceptions.  Here the plaintiff sought a decree of dissolution by his complaint filed several months after a similar claim was filed by the other side in New Jersey. Noting that any decision by it would impact a preliminary ruling by the New Jersey court, the Court of Chancery dismissed its case to avoid such a conflict.

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