Showing 7 posts from November 2017.

Planning Is Key to Treatment of Charities’ Endowment Funds in Bankruptcy

The charitable nonprofit form creates unique issues of corporate governance. Officers and directors owe fiduciary duties to their charitable institutions, and insolvency or reorganization complicates issues, particularly with regard to the handling of endowment funds.

Donors can specify how gifts are to be spent, making those funds restricted and inviolable from general use. Having restricted endowment funds on hand but lacking availability to them may further complicate the equation. The board’s perception of its predicament may be clouded because its balance sheet may appear to be flush with cash, yet some funds remain out of reach, unavailable for general use. More ›

Court of Chancery Dismisses Derivative Action for Failure to Plead Demand Futility

A cardinal principle of Delaware law is that directors manage the business and affairs of a Delaware corporation. This includes decisions regarding whether to pursue claims against officers and directors whose breach of duty may have injured the company. A stockholder who believes that the board is not pursuing claims of wrongdoing that harmed the company must first demand that the board investigate or pursue those claims so that the board has an opportunity to exhaust intra-corporate remedies. 

It is only if the stockholder believes that demand would be futile that the stockholder can skip that step and file a derivative claim on behalf of the corporation. In that circumstance the stockholder must plead adequately why demand would have been futile or have the action dismissed for failure to do so.  Lenois v. Lukman, C. A. No. 11963-VCMR (Del. Ch. Nov. 7) is the most recent guidance from the court on the topic of demand futility and the case illustrates, among other things, that the mere fact that one officer or director may have acted in bad faith does not suffice to excuse demand if the plaintiff is unable to plead particularized facts demonstrating that a majority of the board could not act impartially upon a stockholder demand. Where a company has an exculpatory provision in its charter under Section 102(b)(7) that means a plaintiff must plead facts showing that a majority of the board faces a risk of liability for claims not otherwise exculpated, i.e., claims for violation of the duty of loyalty or for not acting in good faith. More ›

Be Careful What You Ask For in a Section 225 Case

McnallyDelaware recognizes the need to promptly resolve disputes over the composition of the board of directors of a Delaware corporation.

November 17, 2017Delaware Business Court Insider

Delaware recognizes the need to promptly resolve disputes over the composition of the board of directors of a Delaware corporation. Section 225 of the Delaware General Corporation Law provides that the Delaware Court of Chancery may “hear and determine” who is on the board. Those proceedings are “summary” in nature meaning that the entire case can go to trial in 90 days or less from the date the complaint is filed or even less when the circumstances warrant extra expedition. This fast adjudication, however, warrants special caution as a recent Court of Chancery decision points out. More ›

Morris James Leads in Delaware Today “Top Lawyers” Issue with 29 Attorney Recognitions

Posted In News

Morris James LLP is pleased to announce it received 29 recognitions in Delaware Today magazine’s 2017 Delaware Top Lawyers issue.  The recognized lawyers were chosen by their peers in a survey to members of the Delaware State Bar Association. 

Gretchen S. Knight, Lewis C. Ledyard III, Rich Galperin, Ian D. McCauley and James H. McMackin III, distinguished in bold, received the most votes of any lawyer in their respective categories. Morris James attorneys were rated as “Top Lawyers” in 12 separate practice areas, and Keith Donovan was recognized in multiple categories.  More ›

Partner Patricia A. Winston Appointed to Jurisdiction Improvement Committee Tasked with Improving the Efficient Resolution of Citizens’ Disputes

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As a member of the Jurisdictional Improvement Committee, Morris James Partner Patricia A. Winston will serve on a team tasked with taking a comprehensive look at reforming and updating the jurisdictional authority of each of Delaware's courts.  Recently formed by the Delaware Judiciary, the Jurisdictional Improvement Committee was created in response to the Joint Study of the Delaware Courts by the Delaware Chapter of the American College of Trial Lawyers (ACTL) and the Delaware State Bar Association (DSBA). The Committee’s mission is to help the Delaware Courts operate more productively and efficiently by eliminating unnecessary overlap in the trial courts’ jurisdiction and by assigning certain types of cases to the trial court best positioned to address those cases cost-effectively and expertly.  More ›

Ian D. McCauley to Participate in a CLE Panel Discussion on Recent Developments in E-Discovery

Morris James attorney Ian D. McCauley will serve on a panel discussing the latest eDiscovery issues at a CLE program titled “Recent Developments in Data Security and E-Discovery.”  The program is sponsored by the E-Discovery and Technology Law Section of the Delaware State Bar Association and is scheduled for Tuesday, November 14th, 2017 from 8:30 a.m. – 11:45 a.m. at the New Castle County Delaware State Bar Association with webcasts being offered in Dover and Georgetown.  With cyber-attacks constantly in the news and counsel continuing to struggle with discovery issues, this CLE promises to be both important and timely for lawyers. Click here for registration.  More ›

Ryan T. Keating to Speak on Cybersecurity at the Medical Society of Delaware

Posted In News

keatingMorris James attorney Ryan T. Keating will speak on Cybersecurity at the Medical Society of Delaware (MSD).  The program is part of the Society’s Practice Management and Leadership Education Series and will include business information on a wide variety of cybersecurity topics including HIPAA’s Security and Breach Notification Rules, Delaware’s Cyber Security statute, Security and Privacy Liability, Business Interruption and Cyber Crime, to name a few.

Mr. Keating is a member of Morris James’ Professional Liability Litigation and Data Privacy and Information Governance Practice Groups. He regularly represents hospitals, medical practices, and physicians in professional liability litigation.  Mr. Keating has experience leading data security breach investigation and response, and has advised clients on their potential obligations to report such incidents under federal and State laws.  He also counsels medical institutions and professionals on their compliance obligations under HIPAA’s Privacy and Security rules.  Mr. Keating is a contributor to Morris James’ Delaware Healthcare Industry Blog which provides summaries and analysis of legal topics relating to the healthcare industry.