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Filing a Knee-Jerk Counterclaim Can Make a Bad Problem Worse

In today’s litigious world, it is all too common for a disgruntled former business partner to file a lawsuit based on legally weak, if not outright frivolous, claims of wrongdoing. One common reaction is to fight fire with...more

Three New Weapons to Combat Shareholder Litigation

Over the past several years there has been an overwhelming abundance of class action shareholder litigation. A study by Cornerstone Research found that in 2013 alone, 94% of mergers and acquisitions worth over $100 million...more

Cambridge Ret. Sys. v. Bosnjak, C.A. No. 9178-CB (Del. Ch. June 26, 2014) (Bouchard, C.)

In this memorandum opinion, the Court of Chancery granted in part and denied in part the defendants’ motion to dismiss for failure to make a pre-suit demand on the board and for failure to state a claim, holding that demand...more

In re El Paso Pipeline Partners, L.P. Derivative Litig., C.A. No. 7141-VCL (Del. Ch. Jun. 12, 2014) (Laster, V.C.)

In this memorandum opinion resolving cross-motions for summary judgment, the Court of Chancery dismissed in part claims challenging a drop-down sale governed by a limited partnership agreement that supplanted fiduciary duties...more

Oracle Partners, L.P., v. Biolase, Inc., C.A. No. 9438-VCN (Del. Ch. May 21, 2014) (Noble, V.C.)

In this post-trial memorandum opinion, the Court of Chancery ruled on the board composition of Defendant and Counter-Plaintiff Biolase, Inc. (“Biolase”). The Court declared that only one of two contested director...more

Internal Affairs Doctrine May Not Control Alter Ego Liability

The internal affairs doctrine “is a conflict of laws principle which recognizes that only one State should have the authority to regulate a corporation’s internal affairs — matters peculiar to the relationships among or...more

Corporate Shield Holds Up Against Creditor

There's no expression when speaking of football players to recognize a performance that hits three exceptional marks (like a hat trick in hockey or a triple double in basketball or the triple crown in baseball). Maybe there...more

Shareholder Proposals: Different Challenges, Different Results

This proxy season, several companies filed suit against shareholder activist, John Chevedden, challenging his shareholder proposals. Three companies, Omnicom Group, Inc., Chipotle Mexican Grill, Inc. and Express Scripts...more

Delaware Chancery Court Clarifies Delaware Boards’ Fiduciary Oversight Duties as to Corporate Operations Abroad

In 2013, the Delaware Court of Chancery issued three decisions in which it denied motions to dismiss claims for breach of the duty of oversight (i.e., Caremark claims) asserted against directors of Delaware corporations...more

In re Rural Metro Corp. S'holders Litig., C.A. No. 6350-VCL (Del. Ch. Mar. 7, 2014) (Laster, V.C.)

In this post-trial decision, the Court of Chancery held a financial advisor liable for aiding and abetting breaches of fiduciary duty by a target board in the sale of the company. The Court concluded that the financial...more

"Reliance by Directors: What’s a Conscientious Director to Do?"

An Issue Needing Attention - In its recent decision in In Re Rural Metro Corporation Stockholders Litigation, the Delaware Court of Chancery, in a footnote, touches on what it means for directors to be “fully...more

Delaware Supreme Court Upholds Chancery Court Ruling that Applied Business Judgment Rule to Going Private Transaction with...

In Kahn v. M&F Worldwide Corp., the Delaware Supreme Court unanimously upheld the Chancery Court’s decision in In re MFW Shareholders Litigation. In that decision, the Chancery Court had granted summary judgment in favor of...more

Caspian Select Credit Master Fund Ltd. v. Key Plastics Corp., C.A. No. 8625-VCN (Del. Ch. Feb. 24, 2014) (Noble, V.C.)

In this letter opinion, the Court of Chancery granted plaintiff’s request for books and records pursuant to 8 Del. C. § 220. The stockholder plaintiff sought, among other things, to value its equity holding in Key Plastics...more

Delaware Supreme Court Deals Blow to Merger Litigation Plaintiffs

On Friday, the Delaware Supreme Court adopted the business judgment rule standard of review for some controlling stockholder freeze-out mergers and potentially other interested party transactions. In Kahn, et al. v. M&F...more

In re MFW Decision Upheld by Delaware Supreme Court

Last week in Kahn v. M&F Worldwide Corp. (Del. March 14, 2014), the Delaware Supreme Court upheld the decision of the Court of Chancery in the In re MFW Shareholders Litigation (Del. Ch. May 29, 2013) case and also upheld the...more

In the Rural/Metro Decision, Delaware Court Emphasizes Conflicts of Interest in Finding Breaches of Fiduciary Duties

Citing various conflicts of interests involving management, board members and financial advisors, Vice Chancellor Laster of the Delaware Court of Chancery found that the Board of Directors of Rural/Metro Corporation (“Rural”)...more

Court Rules Houston Astros Cannot Strike Out Fiduciary Duties in Bankruptcy

Introduction - One of the incentives that Delaware law offers founders of business entities is the ability to tinker with the fiduciary duties that the managers of the business owe. While the duties owed by corporate...more

North Carolina Business Court Limits Unfair and Deceptive Trade Practice Claims Concerning Internal Corporate Matters

On January 28, 2014, the North Carolina Business Court dismissed an unfair and deceptive trade practice claim alleging that corporate directors structured the sale of a corporation in a manner that shortchanged its common...more

Delaware Supreme Court: No Duty to Buy Out Minority Shareholders in Closely Held Corporations

The Delaware Supreme Court recently considered whether the directors of a closely held corporation had a duty under common law fiduciary principles to repurchase a minority shareholder’s shares. The court also considered...more

Delaware Court Rules in Favor of Former LLC Member in LLC’s Competition Claim

Last week, the Delaware Court of Chancery ruled that because a limited liability company (LLC) agreement did not contain a provision precluding or restricting competition, i.e., a non-compete provision, a former member did...more

Practice Tips for M&A Practitioners for 2014

Based on a number of cases decided by the Delaware courts in 2013, below we summarize practice tips regarding careful drafting of contractual provisions and complying with technical and statutory requirements....more

Eleventh Circuit Certifies Questions On Georgia Business Judgment Rule In Bank Officer Case, Declines To Apply “No Duty” Rule To...

On December 23, the U.S. Court of Appeals for the 11th Circuit certified questions to the Georgia Supreme Court regarding whether bank directors and officers can be subject to claims for ordinary negligence under the state...more

North Carolina Supreme Court Addresses Duties of Corporate Directors

On November 8, 2013, the North Carolina Supreme Court issued a rare opinion addressing the duties of corporate directors and reaffirming that those duties are generally owed only to the corporation itself rather than the...more

In re Trados: Directors Dodge a Bullet

Vice Chancellor J. Travis Laster’s August 16 post-trial opinion in In re Trados Inc. Shareholder Litigation1 (hereinafter, “In re Trados”) has attracted a significant amount of attention. Much as both the Chancery and the...more

Securities Regulation: The Supreme Court of Canada Speaks Again

The Supreme Court of Canada recently issued its decision in McLean v British Columbia (Securities Commission). The case is the first by the Court to address inter-provincial cooperation in relation to securities...more

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