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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 Sufficiently Pled Fiduciary Duty Claims Relating to De-SPAC Transaction

Solak v. Mountain Crest Capital LLC, et al., C.A. No. 2023-0469-SG (Del. Ch. Oct. 18, 2024) - The Court of Chancery found that the plaintiff stated legally-sufficient claims in connection with a merger transaction against...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

Supreme Court Affirms Chancery Decision of Near-Record $267 Million Fee Award

In re Dell Techs. Inc. Class V S’holders Litig., No. 349, 2023 (Del. Aug. 14, 2024) - After an appeal of the second-largest fee award in Delaware history, the Delaware Supreme Court ruled that the Court of Chancery had...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

Chancery Finds Language in LLC Agreement Insufficient To Waive Fiduciary Duties and Permit Competing Business Ventures

Green v. McClive, C.A. No. 2023-0139-MTZ (Del. Ch. June 3, 2024) - The plaintiff filed claims against defendant McClive, alleging breach of contract, breach of fiduciary duty, and usurpation of corporate opportunities...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

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 Invokes the Implied Covenant to Invalidate Shareholder Rights Plan

Whitestone REIT Operating Partnership L.P. v. Pillarstone Capital REIT, C.A. No. 2022-0607-LWW (Del. Ch. Jan. 25, 2024) - In Delaware, the implied covenant of good faith and fair dealing is inherent in all contracts and...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 Addresses Pleading-Stage Arguments for Dismissal in LLC Dispute

Principal Growth Strategies LLC v. AGH Parent LLC, C.A. 2019-0431-JTL (Del. Ch. January 25, 2023) - This decision provides helpful guidance to practitioners to address pleading-stage arguments for dismissal. The plaintiff...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 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

Chancery Concludes Accountant Provision in Stock Purchase Agreement Calls for Expert Determination Rather than Arbitration

ArchKey Intermediate Holdings Inc. v. Mona, C.A. No. 2021-0383-JTL (Del. Ch. Oct. 3, 2023) - Parties to a stock purchase agreement disputed post-closing price adjustments. The agreement called for an independent accountant...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 Limits Section 220 Books-and-Records Production to Formal Board Materials

In re Zendesk, Inc. Section 220 Litigation, C.A. No. 2023-0454-BWD (Del. Ch. Aug. 25, 2023) - The background of this books-and-records decision involved a failed acquisition, a strategic review, a proxy contest, and a...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

Controlling Stockholder Avoids Liability Despite Overreach Into Special Committee Brokered-Settlement

Triggering Delaware’s entire fairness review in stockholder litigation was once considered outcome determinate, but that view has waned. Numerous decisions have shown that defendants can overcome the unified fair process and...more

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