Posts tagged Discovery

Court of Chancery Permits Discovery for a Settlement Hearing

In re Countrywide Corp. S'holders Litig., C.A. 3464-VCN (Del. Ch. Sept. 3, 2008)

In this admittedly unusual case, the Court of Chancery has expanded the limited discovery available to an objector of a proposed settlement of a derivative case. The discovery includes the valuation of the derivative claims' value to the company. The Court also notes the potential privilege problems that may be involved.

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Court of Chancery Permits Special Committee Discovery

Young v. Klaassan, C.A. 2770-VCL (Del. Ch. April 25, 2008)

The use of a special committee of the board to avoid derivative suits over allegations of breach of duty is well recognized. What is less well known is how to use the work of such a committee. Here the defendants improperly argued that a derivative suit should be dismissed because of the conclusions of a special committee formed after the complaint was filed. That use of information not alleged in the complaint converted the motion to dismiss into a motion for summary judgment and thereby permitted discovery into the work of the special committee.

The opinion also notes the "unusual" nature of the special committee in this case. The committee did not issue a report, barely had its existence disclosed, and otherwise proceeded irregularly. One has to wonder why it was even formed if it was to act so poorly.

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Federal Court Excludes Expert Testimony Dealing With The Law Of The Case

Cantor v. Perelman, Civil Action No. 97-586-KAJ, 2006 WL 3462596 (D. Del. Nov. 30, 2006).

Plaintiff and defendants filed motions to exclude the testimony and reports of several experts. The Court granted the motions to exclude the entire proposed testimony of one expert from both parties. The motions were denied with respect to all other experts in all other respects.

This action originates from a plan of reorganization in bankruptcy litigation involving Marvel Entertainment Group, Inc. (“Marvel”) and the Trustees of the MAFCO Litigation Trust (“Trust”) created as part of the Reorganization Plan. The Trust was created to pursue breach of fiduciary duty and unjust enrichment claims against defendants comprising Perelman, a controlling stockholder and chairman of Marvel, and other directors of the Marvel companies. The instant opinion is connected to the issue of three tranches of notes (“Notes”) issued in 1993 and 1994 by Marvel, raising $553.5 million by using Marvel stock as collateral. Plaintiffs alleged that the defendants breached their fiduciary duties by using Marvel resources to sell the Notes and including restrictions on the issue of debt or dilution of Perelman’s shareholding in those Notes.

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Court of Chancery Denies Request for Two-Tier Confidentiality Order

In re Transkaryotic Therapies, Inc., C.A. No. 1554-N, 2006 WL 1388749 (Del. Ch. May 10, 2006). Respondent in appraisal action sought two-tier, rather than one-tier, confidentiality order. More › Share

District Court Issues Show Cause Order to Determine Whether Tort Action Should Be Dismissed for Failure to Prosecute

Cherry Line, S.A. v. Muma Services f/k/a Murphy Marine Services, Inc., C.A. No. 03-199-JJF, 2006 U.S. Dist. Lexis 29818 (D. Del. May 8, 2006). Defendant filed a motion for sanctions and for dismissal for failure to prosecute. More › Share

Court of Chancery Permits Third Complaint Amendment In Nigerian Judgment-Enforcement Action

Harry A. Akande v. Transamerica Airlines, Inc., et al., C.A. No. 1039-N, 2006 WL 587846 (Del. Ch. Feb. 28, 2006). This is a motion to amend the Complaint under Court of Chancery Rules 15(a) and 15(aaa) for the third time before the Court of Chancery, involving a foreign judgment enforcement action. Plaintiff sought to withdraw his petition for receivership and add factual predicates to various claims he made. In an earlier hearing, the Court of Chancery permitted plaintiff's motion for discovery and converted the defendants' motion for dismissal upon plaintiff's motion to one of summary judgment. More › Share

Court of Chancery Denies Motion For Expedited Preliminary Injunction Hearing For Lack of "Colorable Claim" Demonstrating Imminent Irreparable Harm

Madison Real Estate Immobbilien-Anlagegesellschaft Beschrankt Haftende KG v. GENO One Financial Place L.P. and GENO Auslandsimmobilien GmbH, No. Civ.A. No. 1928-N, 2006 WL 456779 (Del. Ch. Feb. 22, 2006). The plaintiff is a German entity organized under that country's laws, as is the second named German limited liability defendant. The latter party is also a general partner in the first defendant entity. The plaintiff was one of two bidders that made an unregulated tender offer for a part of the first-named defendant's Delaware limited partnership interest. Plaintiff filed a motion in the Court of Chancery for expedited injunction proceedings, seeking to enjoin the defendant's general partner from approving any transfer agreements related to the tender offers. More › Share

Court of Chancery Denies Defendants' Demand For Intercontinental Depositions Approving Videoconferencing Under R.30(b) And Limits Number Of Deponents

Unisuper Ltd., et al. v. News Corporation, et al., C.A. No. 1699-N, 2006 WL 375433 (Del. Ch. Feb. 09, 2006). Defendants filed cross-motions requiring depositions of thirteen named plaintiffs' under Ch. Ct. R. 30(b)(6) in either Delaware or New York. Plaintiffs filed motions for protective orders, to limit the numbers of deponents and contended depositions could occur outside the United States via videoconferencing. The plaintiffs' Australian company had reincorporated in Delaware. Plaintiff sought equitable relief requesting its shareholders to be permitted to vote on a poison pill's extension. The court treated this matter as a representative one, rather than an individual shareholder suit. More › Share

Court of Chancery Partially Denies Defendants' Motion To Stay Discovery Pending Resolution Of Their Motion To Dismiss

Bonham v. HBW Holdings, Inc., C.A. No. 820-N, 2005 WL 2335464 (Del. Ch. Sept. 20, 2005). Defendants moved to stay discovery pending resolution of their motion to dismiss. More › Share

Federal Court Permits Defendant's Third-Party Claim But Denies Insurer's Similar Motion As Time Barred

Federal Ins. Co. v. Lighthouse Constr., Inc., 230 F.R.D. 387 (D.Del. 2005). A subrogation action was brought by a property insurer to recover for loss incurred by a roof collapse against a building contractor. The contractor sought leave of the Court to file a third-party complaint against the erection contractor. The insurer also sought leave to file a claim against the erection contractor. The Court held that the contractor could file a third-party claim for indemnity against the erection contractor. However, the Court also ruled that the plaintiff-insurer was barred by a two-year statute of limitations from filing a third-party claim against the erection contractor. More › Share

Federal Court Excludes Expert Testimony As Irrelevant Under The Daubert Standard.

iGames Entertainment, Inc. v. Chex Services, Inc., C.A. No. 04-180-KAJ, 2005 WL 3657156 (D.Del. June 9, 2005). This matter springs from a commercial dispute. The present opinion pertains to plaintiff's Daubert Motion seeking to exclude a part of the proposed expert testimony of defendants' expert. The expert intended to testify on accounting matters. The Court granted plaintiff's motion holding that the challenged parts of the proposed testimony failed the test of relevancy. More › Share

Federal Court Examines Admissibility of Various Evidences In Trans-Atlantic Chrysler Merger

Tracinda Corp. v. DaimlerChrysler AG, 362 F.Supp.2d 487 (D.Del. 2005). Tracinda Corporation ("Tracinda"), a Nevada entity with its principal place of business in California, was engaged in investing in companies and at the time was Chrysler's largest shareholder. Tracinda brought this action against defendants comprising of DaimlerChrysler AG, Daimler-Benz AG ("Daimler"), Jurgen Schrempp and Manfred Gentz, (collectively "Defendants") who were citizens of Germany alleging: (1) violations of securities laws; (2) common law fraud; and (3) conspiracy in connection with the 1998 merger between Chrysler Corporation ("Chrysler") and Daimler-Benz AG ("Daimler-Benz"). In this Memorandum Opinion, the Court examined a number of evidentiary objections brought by both parties. The objections included: expert opinion testimony, statements made by the CEO of the German manufacturer that were published in a newspaper, investment banker documents discussing business combination scenarios between the merger parties, third-party research reports, meeting notes on the merger, failure to include charts and privileged attorney-client matters. More › Share

Superior Court Grants Motion for Reargument and Limits Discovery

TIG Ins. Co. v. Premier Parks, Inc., C.A. No. 02C-04-126 PLA, 2005 WL 468300 (Del. Super. Ct. Mar. 1, 2005). This case involved whether TIG Ins. Co. ("TIG") met its contractual obligations to provide adequate counsel to defend Premier Parks, Inc. ("Six Flags") in an employment discrimination case. After initially granting plaintiff's motion to compel discovery, the court limited its ruling on reargument after it became clear that complying with the court's order would require manual searches of files rather than simple electronic searches. More › Share

Federal Court Permits Motion To Compel Deposition Of Rule 30(b)(6) Witness

Jurimex Kommerz Transit G.M.B.H. v. Case Corp., No. Civ.A. 00-083 JJF, 2005 WL 440621 (D.Del. Feb. 18, 2005). Plaintiffs filed a motion to compel deposition testimony of defendant's subsidiaries in a matter involving an international transaction. The motion was granted in part and denied in part. More › Share

Court of Chancery Refuses Depositions and "Reasonableness" Argument Under 8 Del. C. - 275

Belanger v. Fab Indus., Inc., et al., C.A. No. 054-N, 2005 WL 493593 (Del. Ch. Feb. 17, 2005). The court granted defendant's motion for protective order in a case arising out of a dissolution petition under 8 Del. C. §275. More › Share