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Delaware Chancery Court Applies Entire Fairness Standard to Consulting Agreement Among Affiliates of a Controlling Shareholder

In the recent decision of In re EZCORP Inc. Consulting Agreement Derivative Litigation, C.A. No. 9962-VCL (Jan. 25, 2016), the Delaware Court of Chancery clarified the standard of review when faced with shareholder challenges...more

The Demise of Disclosure-Only Settlements?

On January 22, 2016, the Delaware Court of Chancery, in an opinion of Chancellor Bouchard, rejected a proposed disclosure-only settlement in the context of M&A litigation that offered no new helpful information to the...more

Court Of Chancery Applies Entire Fairness To Controller Contract

This is an important and useful decision for at least two reasons. First, the Court carefully analyzes past Delaware precedent to conclude that the entire fairness test applies not just to squeeze-out mergers, but also to...more

Client Agreement and Failure to Terminate Representation Under the Terms of Client Agreement Results in Firm's Disqualification...

Brief Summary - In 2013, three shareholders sued: (1) each other for breach of fiduciary duties; and (2) their company for involuntary dissolution. The law firm that represented one of the shareholders had been retained...more

Court Of Chancery Explores The Effect Of Federal Settlements On A Delaware Action And Applies Unocal To Bylaw Amendments

First, the Court explores the effect settlement agreements in two federal court actions might have on claims in a Delaware action. The decision holds that the settlements did not release the Delaware plaintiffs’ derivative...more

ESG Capital Partners v. Passport Special Opportunities Master Fund, C.A. No. 11053-VCL (Del. Ch. Dec. 16, 2015) (Laster, V.C.)

In this memorandum opinion, the Court of Chancery granted in part and denied in part defendants’ motion to dismiss a complaint seeking declaratory relief in which plaintiffs alleged that certain investors in ESG Capital...more

PECO Logistics, LLC v. Walnut Investment Partners, L.P., et al., C.A. No. 9978-CB (Del. Ch. Dec. 30, 2015) (Bouchard, C.)

In this opinion, the Court of Chancery resolved a dispute regarding a put right in an LLC agreement between PECO Logistics, LLC (“PECO”), a Delaware limited liability company, and two of its preferred equity holders, Walnut...more

Relief from sanction: no relief from the Supreme Court

Since 2013 when the relevant court rules were amended, it has become significantly more difficult to obtain relief from sanction imposed for breach of a court rule, practice direction or court order. It is rare for what...more

Locke Lord Article: Enforcing US Stock and Bonus Plan Provisions Against UK Executives

Summary - Key UK Court of Appeal decision highlights the difficulty in enforcing US choice of law provisions within stock or bonus plans against UK based executives. The Issue - It is not unusual for US...more

California Supreme Court Holds Multistate Tax Compact is Not Binding

On December 31, 2015, the California Supreme Court closed the book on California’s Multistate Tax Compact election saga, unanimously holding that the Compact is not a binding contract among its members and the State was not...more

Court Of Chancery Explains Partnership Distribution Rights And Power of GP

ESG Capital Partners II L.P. v. Passport Special Opportunities Master Fund L.P, C.A. 11053-VCL (December 16, 2015) This is an interesting decision for 2 reasons. First, the Court explains what might have seemed obvious...more

[Webinar] What Happens if You Get Sued? Litigation Basics - Dec. 17th, 12:00pm PST

When your company gets sued, what steps should you take immediately and what do you need to be concerned about in the first 30 days of the case? Although cases take a long time to get to trial (and most never make it that...more

Host of Rule Changes Go Into Effect Today in the New York Commercial Division

The rules governing practice in the Commercial Division of New York Supreme Court have undergone a number of important amendments, additions, clarifications and other modifications effective today....more

Delaware Court Denies Most of Defendants’ Motion to Dismiss Unclaimed Property Gift Card False Claims Action

Two years ago, a former employee of Card Fact, LLC (subsequently purchased by Card Compliant), a company providing gift card issuance and management services to retailers, filed a false claims action in Delaware alleging that...more

A Steep Slope — Vermont Supreme Court Finds AIG Not Unitary With a Ski Resort Based On a Clear and Cogent Evidence Burden of Proof

In the first Vermont Supreme Court decision addressing combined unitary reporting since Vermont’s combined reporting regime became effective in 2006, the court affirmed a lower court’s decision that AIG, the multinational...more

California Court Confirms No Absolute Public Policy Against Non-Competes Entered into by Partners

California’s prohibition on non-competition agreements is less than absolute. For example, non-compete agreements may be enforced against partners or sellers of businesses. Additionally, in SingerLewak LLP v. Andrew Gantman...more

Do Not Pass Go. Do Not Collect $200?: D&O Insurance—Advance Warning on Fee Advancement

In a recent string of decisions, the Delaware Chancery Court has addressed the scope of the right of Directors and Officers to have their legal expenses paid while governmental investigations or legal proceedings against them...more

Applying The "Common Legal Interest" Privilege In The Context Of A Financial Transaction

Sophisticated and complex commercial litigation and criminal investigations often involve many participants and their lawyers. In these cases, it is often beneficial for the lawyers to share confidential information pursuant...more

Quadrant Structured Prods. Co. v. Vertin, C.A. No. 6990-VCL (Del. Ch. Oct. 20, 2015) (Laster, V.C.)

In this post-trial decision, the Court of Chancery held that a company’s repurchase of senior notes from an insider approximately six months after returning to solvency did not violate the express or implied terms of the...more

Court Affirmed Finding Of No Fiduciary Duty Because No Joint Venture Existed

In Stutz Rd. Ltd. P’ship v. Weekley Homes, L.P., plaintiffs sued a defendant for breach of fiduciary duty based on duties owed pursuant to an alleged joint venture. No. 05-12-01752-CV, 2015 Tex. App. LEXIS 11440 (Tex....more

Chancery Rejects Facebook Stockholder Ratification Argument

In Espinoza v. Zuckerberg, a stockholder challenged the Facebook board of directors' unanimous approval of a compensation plan for the company's six non-employee directors. The board consisted of eight directors, with only...more

2009 Caiola Family Trust v. PWA, LLC, C.A. No. 8028-VCP (Del. Ch. Oct. 14, 2015) (Parsons, V.C.)

In this 91-page post-trial opinion addressing a dispute between members of a Delaware limited liability company formed to own and operate a residential apartment complex in Kansas, the Court of Chancery held that the...more

Court Of Chancery Explains Jurisdiction For Veil-Piercing

This is an interesting decision for its discussion on what must be pled to obtain Chancery jurisdiction in a claim seeking to pierce the corporate veil. It is not enough to just allege the entity was used to defraud. Rather,...more

Compliance with the Formal Approval Requirements of Delaware Law Required for Stockholder Ratification of Director Compensation

On October 28th, the Delaware Chancery Court, in Espinoza v. Zuckerberg, et al., held that stockholder ratification of a transaction that was approved by an interested board of directors must be accomplished formally through...more

Companies Can Claim Discrimination

In EAD Solicitors LLP v Abrams UKEAT/0054/15/DM, the Employment Appeal Tribunal (EAT) considered whether an age discrimination claim could be brought by a company rather than an individual....more

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