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Update To Bear Stearns/Morgan Chase Litigation In Delaware

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Vice Chancellor Parsons of the Delaware Court of Chancery heard arguments this afternoon in connection with Defendants motion to dismiss or alternatively to stay the Delaware TRO action in favor of the first-filed New York action. The core of Defendants argument was centered on the McWane and forum non conveniens doctrines.

The arguments raise several interesting questions: (1) to what extent would Delaware courts defer to New York courts when matters involve Delaware corporate law; and (2) how would the Delaware court handle, among several other issues, the issue of comity urged by the defendants. 

Several collateral arguments were also raised with respect to obtainment of compulsory process with respect to witnesses located in New York, particularly federal witnesses and the intersection of New York Stock Exchange Rules with Delaware law. 

Plaintiffs argued that unique and novel issues of Delaware law are involved and that the McWane and forum non conveniens doctrines do not require deference to New York courts under relevant Delaware precedent. 

Plaintiffs requested an expedited preliminary injunction hearing before May 8, 2008. The New York court has scheduled arguments related to the first-filed New York preliminary injunction application on that date.

Vice Chancellor Parsons noted the urgency in the matter and took it under advisement. He concluded that a ruling will issue in a few days.

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