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Court of Chancery Holds Supermajority Vote Not Required for Nevada Reincorporation

Gunderson v. The Trade Desk Inc., C.A. No. 2024-1029-PAF (Del. Ch. Nov. 6, 2024) - The board of a Delaware corporation recommended that the corporation reincorporate as a Nevada corporation subject to a majority vote...more

Chancery Dismisses Executive Compensation Action For Failure To Plead Demand Futility

Eckert v. Hightower, C.A. No. 2024-0569-MTZ (Del. Ch. Mar. 24, 2025) - A board of directors approved compensation packages for the company’s CEO, who also was its controlling stockholder. The CEO was a member of the...more

Chancery Finds Merger Validly Amended LLC Agreement and Effectively Removed the LLC’s Manager

Campus Eye Management Holdings LLC v. DiDonato, C.A. No. 2024-0121-LWW (Del. Ch. Aug. 30, 2024) - This case arose out of a dispute between an optometrist who sold a majority stake in his company to a private equity buyer,...more

Delaware Supreme Court Affirms Chancery Decision in Section 225 Control Dispute

Ravindran v. Glas Trust Co. LLC, No. 463, 2023 (Del. Sept. 23, 2024) - In affirming the Court of Chancery’s determination in a Section 225 action that Timothy Pohl (“Pohl”) was the sole director and officer of a Delaware...more

Chancery Dismisses Fiduciary Duty Claim Against Directors Based on Disclosures Regarding the Company’s Purposes

Stansell v. Rosensweig, C.A. No. 2023-0180-PAF (Del. Ch. June 12, 2024) - The plaintiff was a stockholder of a company that provided online education resources. Some of the company's customers used its products to cheat on...more

Court of Chancery Grants Special Litigation Committee’s Dismissal of 'Carvana' Derivative Action

Boards of Delaware corporations control the company’s assets, which includes by default derivative claims for breach of fiduciary duty against the company’s directors and officers. When derivative claims survive dismissal...more

Superior Court Dismisses Aiding and Abetting Claim Against Officers

RGIS International Transition Holdco LLC v. Retail Services WIS Corp., C.A. No. N21C-12-077 (Del. Super. February 13, 2024) - Under Delaware law, a corporation generally cannot conspire with its own officers, directors, or...more

Chancery Dismisses Caremark Action Based on Insufficient Allegations of Bad Faith

Clem v. Skinner, et al., C.A. 2021-0240-LWW (Del. Ch. Feb. 19, 2024) - This Caremark decision involved the retail pharmacy company, Walgreens, and concerned billing practices for a particular insulin pen product that gave...more

Chancery Invalidates Elon Musk’s $55.8 Billion Pay Package

Tornetta v. Musk, et al., C.A. 2018-0408-KSJM (Del. Ch. Jan. 30, 2024) - Stockholders of Tesla, Inc. brought a derivative action against Elon Musk and six individual Tesla directors, alleging that the directors breached...more

Chancery Upholds Challenge to TripAdvisor’s Conversion from a Delaware Corporation into a Nevada Entity

Palkon v. Maffei, C.A. 2023-0449-JTL (Del. Ch. Feb. 20, 2024) - This decision arose out of TripAdivor’s conversion from a Delaware corporation into a Nevada corporation. The company’s CEO and Chair had voting control and...more

Chancery Clarifies Controlling Stockholder Fiduciary Duties in Sears Litigation

In re Sears Hometown and Outlet Stores, Inc. S’holder Litig., C.A. No. 2019-0798-JTL (Del. Ch. Jan. 24, 2024) - Here, a special committee of the board supported a plan to liquidate the company’s floundering business...more

Chancery Confirms Bad Faith Pleading Standard for Officer Caremark Claims

Segway Inc. v. Hong Cai, C.A. No. 2022-1110-LWW (Del. Ch. Ct. Dec. 14, 2023) - The Caremark doctrine recognizes the duty of oversight for directors of Delaware corporations. Under In re McDonald's Corp. Stockholder...more

Chancery Dismisses Double-Derivative Claims for Failure To Plead Demand Futility

City of Hialeah Emps. Ret. Sys. v. Insight Venture Partners, C.A. No. 2022-0846-MTZ (Del. Ch. Dec. 28, 2023) - A venture capital fund invested in two different entities. One of the entities then acquired the other. In the...more

Chancery Declines to Shift Costs to Derivative Plaintiffs

In re Oracle Corp. Deriv. Litig., C.A. No. 2017-0337-SG (Del. Ch. Dec. 28, 2023) - By rule, the prevailing party in Court of Chancery litigation is entitled to shift costs to the losing party, subject to the Court’s...more

Chancery Largely Denies Books-and-Records Inspection Exploring Dividend Potential

Greenlight Capital Offshore Partners, LTD., v. Brighthouse Financial Inc., C.A. No. 2022-1067-LWW (Del. Ch. Nov. 20, 2023) - Valuation is a well-established proper purpose to inspect corporate books and records. While each...more

Chancery Holds that LLC Agreement Did Not Confer Jurisdiction Over Contract and Tort Claims

Ramco Asset Mgmt. LLC v. USA Rare Earth, LLC, C.A. No. 2022-0665-SG (Del. Ch. Oct. 20, 2023) - Plaintiffs brought claims alleging improper dilution of their equity interests when transferring their holdings in an...more

Chancery Awards Mootness Fee Applying Recently Adopted Standard

Assad v. Botha, et al., C.A. No. 2022-0691-LWW (Del. Ch. Oct. 30, 2023) - Here, Vice Chancellor Will awarded a $100,000 mootness fee for “material—and unremarkable—disclosures” following the recently heightened mootness...more

2023 Delaware Corporate and Commercial Case Law Year in Review

This top ten list summarizes significant decisions of the Delaware Supreme Court and the Delaware Court of Chancery over the past calendar year. Our criteria for selection are that the decision either meaningfully changed...more

Supreme Court Upholds Contractual Voidness Provision in LLC Agreement

Holifield v. XRI Investment Holdings, LLC, No. 407, 2022 (Del. Sept. 7, 2023) - This decision concerned the disputed transfer of a member's LLC units. Below, the Court of Chancery held that the disputed transfer was...more

Chancery Upholds Claims Against LLC Officers and Others Arising from Squeeze-Out of Minority Unitholders

Cygnus Opportunity Fund, LLC v. Washington Prime Group, LLC, C.A. No. 2022-0718-JTL (Del. Ch. Aug. 9, 2023) - An Indiana corporation reorganized via bankruptcy into a Delaware LLC, and a senior note holder negotiated for...more

Chancery Finds Derivative Plaintiffs Breached Duties in Withholding Arbitration Award of the Company

Optimiscorp v. Atkins, C.A. No. 2020-0183-MTZ (Del. Ch. June 1, 2023) - As this decision explains, when stockholder plaintiffs control the derivative claims of the company, they serve as agents of the company and owe the...more

Entire Fairness Standard Applied to Transaction Benefitting Controllers of Controllers

Tueza v. Lindon, C.A. No. 2022-0130-SG (Del. Ch. Apr. 27, 2023) - Because controlling stockholders of Delaware corporations owe fiduciary duties to both the corporation and to its minority stockholders, the Court of...more

Chancery Rules That Separate Accrual Periods Apply to an Information Systems Caremark Claim in Walmart Opioid Litigation

Ontario Provincial Council of Carpenters' Pension Trust Fund v. Walton, C.A. No. 2021-0827-JTL (Del. Ch. Apr. 12, 2023) - To determine the limitations period under laches, a court must determine when a claim accrued....more

Chancery Dismisses Oversight Claim Based on Board’s Response to Red Flags

In re McDonald's Corp. Stockholder Derivative Litig., CA No. 2021-0324-JTL (Del. Ch. March 1, 2023) - A plaintiff can plead an oversight claim against a board by alleging particularized facts to support an inference that...more

Chancery Rules That Moving Situs of Trust to Delaware Supports Personal Jurisdiction Under the State’s Long-Arm Statute

Harris v. Harris, C.A. No. 2019-0736-JTL (Del. Ch. Jan. 12, 2023) - Three children filed suit against their mother and her associates, alleging they had seized control of a family-owned corporation and engaged in...more

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