Albert Carroll on Board of Directors

Chancery Examines Director’s Personal Ties and Dismisses Duty of Loyalty Claim

In re Orbit/FR, Inc. S’holders Litig., C.A. No. 2018-0340-SG (Jan. 24, 2023) - This decision involved a stockholder challenge to a merger between Orbit and its controller, Microwave Vision....more

5/4/2023 / Board of Directors , Breach of Duty , Derivative Suit , Fiduciary Duty , Shareholder Litigation , Shareholders

Delaware Corporate and Commercial Case Law Year in Review - February 2023

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

2/13/2023 / Board of Directors , Breach of Contract , Breach of Duty , Corporate Counsel , Derivative Suit , Fiduciary Duty , Motion to Dismiss , Shareholders

Chancery Determines Divorcee Was One Share Short of Equal Ownership Needed To Avoid Removal from Leadership of Business Empire

Haart v. Scaglia, C.A. No. 2022-0145-MTZ (Del. Ch. Aug. 4, 2022) - In public, a high-powered couple presented themselves as equal owners of an operating company, of which the wife was also the CEO and a director....more

11/16/2022 / Board of Directors , Breach of Duty , Fiduciary Duty , Shareholders

Delaware Supreme Court Affirms Dismissal Under Zapata

Diep v. Trimaran Pollo Partners, No. 313, 2021 (Del. June 28, 2022) - After the Court of Chancery denied an initial motion to dismiss, the company formed a special litigation committee (“SLC”) to investigate the claims and...more

10/11/2022 / Board of Directors , Breach of Duty , Derivative Suit , Fiduciary Duty , Shareholders

Chancery Dismisses Contract, Dissolution, and Direct Claims, But Upholds Derivative Claim for Alleged Transfer of Funds Between...

BET FRX LLC v. Myers, C.A. No. 2019-0894-KSJM (Del. Ch. Apr. 27, 2022) - A minority member of a limited liability company had invested $8 million in the LLC. The LLC owned a majority interest in an entity that held a...more

10/4/2022 / Board of Directors , Breach of Duty , Derivative Suit , Dissolution , Fiduciary Duty

Chancery Orders Additional Information to Consider Dissolution Petition

In re Matter of Global Safety Labs, Inc., C.A. No. 2022-0309-JTL (Del. Ch. May 12, 2022) - This case concerned the dissolution procedures of the DGCL, specifically Section 280, which with Section 281 establishes an...more

10/4/2022 / Board of Directors , Delaware General Corporation Law , Dissolution , Shareholders

Chancery Applies Schnell and Blasius Review and Upholds Deadlock-Breaking Stock Issuance

Diamond Fortress Techs., Inc. v. Everid, Inc., C.A. No. N21C-05-048 PRW CCLD (Del. Super. Ct. Apr. 14, 2022) - Plaintiff Diamond Fortress contracted with the defendant company to provide its software to develop a trading...more

10/4/2022 / Board of Directors , Breach of Duty , Entire Fairness Standard , Fiduciary Duty , Shareholders

Chancery Addresses Fiduciary Duty Claims Involving Activist Investor

Goldstein v. Denner, C.A. No. 2020-1061-JTL (Del. Ch. May 26, 2022) - In this case, an activist investor and director was alleged to have concealed an eventual acquiror’s expression of interest while he leveraged that...more

10/4/2022 / Activist Investors , Board of Directors , Breach of Duty , Fiduciary Duty , Mergers , Shareholders

Chancery Resolves Section 225 Dispute and Declines to Invalidate Written Consents

Zhou v. Deng, C.A. No. 2021-0026-JRS (Del. Ch. Apr. 6, 2022) - When deciding a summary proceeding regarding a disputed corporate office under Section 225 of the DGCL, the Court of Chancery may consider whether an election,...more

8/8/2022 / Board of Directors , Breach of Contract , Breach of Duty , Fiduciary Duty , Motion to Dismiss , Shareholders

Chancery Denies Indemnification to Director After Examining Settlement Agreement

Huret v. Mondobrain, Inc., C.A. No. 2021-0208-SG (Del. Ch. Apr. 27, 2022) - Under Section 145(c) of the DGCL, a director that has been successful on the merits or otherwise in defending a covered proceeding is entitled to...more

8/8/2022 / Board of Directors , Breach of Duty , Fiduciary Duty , Indemnification , Motion to Dismiss

Chancery Upholds Claims Against Controller’s Family Member

In re Straight Path Communications Inc. Consol. Stockholder Litig., C.A. No. 2017-0486-SG (Del. Ch. Feb. 17, 2022) - This summary judgment decision arose out of a transaction involving the company Straight Path....more

8/5/2022 / Board of Directors , Breach of Duty , Controlling Stockholders , Fiduciary Duty

Chancery Dismisses All Claims in Stockholder Challenge to Cash-Out Merger Transaction

Harcum v. Lovoi, C.A. No. 2020-0398-PAF (Del. Ch. Jan. 3, 2022) - In Harcum, the Delaware Court of Chancery dismissed all claims brought in a stockholder suit alleging fiduciary breaches in connection with the $1 billion...more

4/29/2022 / Board of Directors , Breach of Duty , Controlling Stockholders , Duty of Loyalty , Fiduciary Duty , Mergers

Chancery Dismisses Breach of Fiduciary Duty Claims Involving Bio-Tech Company Developing a COVID-19 Vaccine

In re Vaxart, Inc. Stockholder Litigation, Consol. C.A. No. 2020-0767-PAF (Del. Ch. Nov. 30, 2021) - Plaintiffs challenged amendments to warrant agreements between Vaxart and its former controlling stockholder, Armistice,...more

2/14/2022 / Board of Directors , Breach of Duty , Fiduciary Duty , Insider Trading , Investors , Shareholders

Delaware Corporate and Commercial Case Law Year in Review

Our 2021 Top 10 list summarizes decisions from the Delaware courts likely to affect business transactions and business litigation going forward. Our criteria for selection are that the decision either meaningfully changed...more

2/1/2022 / Board of Directors , Breach of Duty , Business Litigation , Commercial Litigation , Corporate Counsel , DE Supreme Court , Demand Futility , Derivative Suit , Fiduciary Duty

Chancery Dismisses Time-Barred Complaint Against Zillow

Chertok v. Zillow, Inc., C.A. No. 2019-0849-LWW (Del. Ch. Oct. 18, 2021) - Plaintiffs, a former co-founder and director of NMD Interactive (“Chertok”) and an LLC that he managed, brought a breach of contract action against...more

1/25/2022 / Board of Directors , Breach of Contract , Breach of Duty , Fiduciary Duty , Mergers , Statute of Limitations

Chancery Denies Motion to Compel Director’s Privileged Communications Stored on Third-Party’s Email Server

In Re Dell Technologies Inc Class V Stockholders Litigation, Consol. C.A. No. 2018-0816-JTL (Del. Ch. Sept. 17, 2021) (TRANSCRIPT) - A director utilizing an email account associated with a different company for board...more

12/22/2021 / Attorney-Client Privilege , Board of Directors , Email , Privileged Communication

Delaware Supreme Court Overrules Gentile, Resolving Tension in Legal Test To Determine Whether a Claim Is Direct or Derivative

Brookfield Asset Mgmt., Inc. v. Rosson, No. 406, 2020 (Del. Sept. 20, 2021) - Seeking to bring clarity to the issue of whether a claim is direct or derivative—a potentially outcome-determinative issue—the Delaware Supreme...more

12/17/2021 / Board of Directors , Breach of Duty , Derivative Suit , Fiduciary Duty , Shareholders

Chancery Rejects MFW Defense Based on Failure to Disclose That a Conflicted Controller Participated in Arbitration Proceedings...

Ligos v. Isramco, Inc., C.A. No. 2020-0435-SG (Del. Ch. Aug. 31, 2021) - Under MFW, a conflicted controller transaction may get the benefit of business judgment review when conditioned on two procedural protections...more

11/10/2021 / Board of Directors , Breach of Duty , Fiduciary Duty , Mergers , Shareholders

Chancery Rejects Inadequate Disclosure Contentions and Grants Corwin Dismissal

Kihm v. Mott, C.A. No. 2020-0938-MTZ (Del. Ch. Aug. 31, 2021) - Under the Corwin doctrine, a fully informed and uncoerced approval of a board decision by the corporation’s disinterested stockholders can downgrade an...more

11/1/2021 / Board of Directors , Breach of Duty , Conflicts of Interest , Controlling Stockholders , Corwin Doctrine , Fiduciary Duty , Mergers

Chancery Upholds Well-Pled Claims Relating to Former Fiduciaries’ Retention of Derivative Arbitration Award

Optimiscorp v. Atkins, C.A. No. 2020-0183-MTZ (Del. Ch. July 15, 2021) - In Optimiscorp, the Court upheld claims against former directors and officers of plaintiff Optimiscorp arising out of the defendants’ failure to turn...more

9/8/2021 / Arbitration , Board of Directors , Breach of Duty , Derivative Suit , Fiduciary Duty , Shareholders

Chancery Upholds Fiduciary Duty Claims Arising Out Of Deal Involving an Alleged Control Group That Included Non-Stockholders and a...

In re Pattern Energy Grp. Inc. Stockholders Litig., C.A. No. 2020-0357-MTZ (Del. Ch. May 6, 2021) - This decision mostly denying a motion to dismiss examines several important issues in post-closing M&A fiduciary duty...more

7/6/2021 / Aiding and Abetting , Board of Directors , Breach of Duty , Controlling Stockholders , Duty of Loyalty , Entire Fairness Standard , Fiduciary Duty , Mergers

Chancery Appoints Amicus Curaie to Provide Independent Guidance Regarding Unopposed Petition to Revive Defunct Corporation for Use...

In re Forum Mobile, Inc., C.A. 2020-0346-JTL (Del. Ch. Mar. 18, 2021) - The Court of Chancery has the inherent authority to appoint an amicus curaie if the Court believes it would benefit from a more fulsome presentation...more

4/15/2021 / Board of Directors , Custodians , Delaware General Corporation Law , Securities and Exchange Commission (SEC)

Chancery Dismisses Derivative Breach of Contract Claim Against Directors for Alleged Violations of Certificate of Incorporation

Lacey v. Mota-Velasco, C.A. No. 2019-0312-SG (Del. Ch. Feb. 11, 2021) - A corporate charter represents a contractual agreement between the corporation and its stockholders. In Lacey, the Court of Chancery addressed...more

3/31/2021 / Board of Directors , Breach of Contract , Breach of Duty , Fiduciary Duty , Motion to Dismiss

Chancery Sustains Claims Against Target’s CEO, Target’s Financial Advisor, and Acquirer for Allegedly Covertly Steering Merger...

Firefighters’ Pension System of The City of Kansas City, Missouri Trust v. Presidio, Inc., C.A. No. 2019-0839-JTL (Del. Ch. Jan. 29, 2021) Presidio illustrates potential pitfalls for parties in the M&A process, including...more

2/26/2021 / Board of Directors , Breach of Duty , Business Judgment Rule , Controlling Stockholders , Duty of Loyalty , Fiduciary Duty

Delaware Corporate and Commercial Case Law Year in Review: 2020