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Implied Covenant of Good Faith and Fair Dealing Saves Employee’s Claim for Improper Termination Under Company’s LLC Agreement

Smith v. Scott, C.A. No. 2020-0263-JRS (Del. Ch. Apr. 23, 2021) - The Delaware LLC Act provides that fiduciary duties may be expanded or limited by the provisions of an LLC agreement. If the agreement is silent, then...more

Chancery Denies Claim Arising Out of Controller’s Announced Intention to Oppose a Transaction Unfavorable to His Interests

RCS Creditor Trust v. Schorsch et al., C.A. No: 2017-0178-SG (Del. Ch. Mar. 18, 2021) - Controlling shareholders of a Delaware corporation owe fiduciaries duties, but those duties do not require controllers to sacrifice...more

Chancery Enjoins Prosecution of Fraudulent Inducement and Declaratory Judgment Claims Based on Exclusive Delaware Forum Provision

SPay, Inc. v. Stack Media Inc. k/n/a JLC2011, Inc., et al., CA No. 2020-0540-JRS (Del. Ch. Mar. 23, 2021) - To obtain a preliminary anti-suit injunction, a movant must show (1) a reasonable likelihood of success on the...more

Superior Court Applies “Law Most Favorable” Choice of Law Provision and Finds Investment Fund’s Settlement of a Fraudulent...

Sycamore Partners Management, L.P. v. Endurance American Insurance Company, C.A. No. N18C-09-211 AML CCLD (Del. Super. Feb. 26, 2021) - The bankruptcy estate of Nine West accused investment firm Sycamore Partners of...more

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

Chancery Allows McDonald’s to Pursue Claims Against Ex-CEO, Finding Separation Agreement’s Integration Clause Does Not Bar Them

McDonald’s Corp. v. Easterbrook, C.A. 2020-0658-JRS (Del. Ch. Feb. 2, 2021) - Delaware has a strong public policy against fraud. Consequently, parties who seek to bar extra-contractual fraud claims must expressly provide...more

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

Delaware Corporate and Commercial Case Law Year in Review: 2020

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

Plaintiff’s Failure to Plead Demand Futility Leads to Dismissal of Caremark Claims Against MoneyGram Directors

Richardson v. Clark, C.A. No. 2019-1015-SG (Del. Ch. Dec. 31, 2020) - Under Court of Chancery Rule 23.1, a derivative plaintiff’s must make a demand on the corporation’s board of directors unless the plaintiff can plead...more

Chancery Modifies Confidentiality Order to Permit Assertion of Plenary Claims in Appraisal Action

Harris v. Harris FRC Corp., C.A. No. 2019-0736-JTL (Del. Ch. Jan. 7, 2021) - Under Rule 5.1, the Court of Chancery may enter a confidentiality order upon a showing of good cause that such an order is necessary to protect...more

Chancery Addresses Standing Defense And Control Allegations In Abandoned Tender Offer Dispute

In re WeWork Litig., C.A. No. 2020-0258-AGB (Del. Ch. Dec. 14, 2020) - This decision is the companion to another dismissal opinion in same case of the same date and arising out of the same abandoned multi-step tender...more

Chancery Resolves Dispute Between Competing Special Committees, Finding Second Committee Could Not Voluntarily Dismiss Suit...

In re WeWork Litigation, C.A. No. 2020-0258-AGB (Del. Ch. Dec. 14, 2020) - This decision addresses a matter of first impression arising out of a dispute pitting two special committees of the same company, WeCompany...more

Chancery Sustains CEO’s Contract Claims in WeWork Litigation

In re WeWork Litig., Consol. C.A. No. 2020-0258-AGB (Del. Ch. Oct. 30, 2020). A company facing a liquidity crisis (the shared working space company, WeWork), its outgoing CEO (Adam Nuemann), and two related SoftBank...more

Chancery Addresses Fiduciary Duty Claims Related To Financial Statements Created For Merger

In re Baker Hughes Inc. Merger Litigation, C.A. No. 2019-0638 AGB (Del. Ch. Oct. 27, 2020). This decision arose out of a merger involving Baker Hughes and the oil and gas segment of General Electric (GE). Stockholders of...more

Chancery Reaffirms Narrowed Application of Gentile

In re Terraform Power, Inc. Stockholders Litigation, C.A. No. 2019-0757-SG (Del. Ch. Oct. 30, 2020) - In Terraform Power, the Court of Chancery declined the defendants’ invitation to disregard the rationale of Gentile v....more

Mindbody Deal Case Provides Conflict Takeaways For Boards

The Delaware Court of Chancery's recent decision in In re: Mindbody Inc. Stockholders Litigation is important reading for lawyers whose practices include evaluating, addressing and — when necessary — litigating potential...more

Chancery Rejects Conspiracy Jurisdiction Over Foreign Defendant

Lacey v. Mota-Velasco, C.A. No. 2019-312-SG (Del. Ch. Oct. 6, 2020) - Under Istituto Bancario, a foreign defendant alleged to be part of a conspiracy may be subject to personal jurisdiction in Delaware, but only if the...more

Chancery Dismisses Caremark Claims Against Metlife Board

In re Metlife Inc. Derivative Litigation, Consol. C.A. No. 2019-0452-SG (Del. Ch. Aug. 17, 2020) - Shareholders seeking relief for alleged harm to a Delaware corporation must comply with Delaware’s pre-suit demand...more

Chancery Addresses Burdens for Valuation-Related Books-and-Records Inspections, While Finding Defendant’s Asserted Lack of Records...

Woods v. Sahara Enterprises, Inc., C.A. No. 2020-0153-JTL (Del. Ch. July 22, 2020) - This decision concerning statutory inspection rights under Section 220 of the Delaware General Corporation Law clarifies the requirements...more

Chancery Provides Guidance on Rule 23.1 “With Particularity” Pleading Standard in Continuing Investors Bancorp Stock Awards and...

Elburn v. Albanese, C.A. No. 2019-0774-JRS (Del. Ch. Apr. 21, 2020) - Finding that the stockholder plaintiff (the “Plaintiff”) had satisfied the Rule 23.1 “with particularity” pleading standard, the Court of Chancery...more

Chancery Dismisses Claims Seeking to Compel a Dividend Declaration and for Breach of the Duty of Care

Buckley Family Trust v. McCleary, C.A. No. 2018-0903-AGB (Del. Ch. Mar. 31, 2020). This case involved a minority stockholder in a Subchapter S corporation seeking relief as a result of its dissatisfaction with management’s...more

Chancery Shifts Attorneys’ Fees Under Bad-Faith Exception Based on False Statements in Plaintiff’s Complaint and Obstruction of...

Bay Capital Finance, L.L.C. v. Barnes and Noble Education, Inc., C.A. No. 2019-0539-KSJM (Del. Ch. Mar. 30, 2020). With some limited exceptions, the American Rule requires parties to pay their own attorneys’ fees in...more

Chancery Addresses Civil Conspiracy Elements

O’Gara v. Coleman, C.A. No. 2018-0708-KSJM (Del. Ch. Feb. 14, 2020). This action arose out of corporate infighting among certain directors and investors at a nutrient-infused water company....more

Chancery Finds Pleadings Sufficient to Support Claim that a Corporate Self-Tender Offer was Coercive

Davidow v. LRN Corp., C.A. No. 2019-0150-MTZ (Del. Ch. Feb. 25, 2020). Delaware law does not invoke the entire fairness test for a voluntary, noncoercive offer by a corporation to buy its own shares....more

Chancery Addresses Pleading Standards for Caremark Claims

In re LendingClub Corp., Consol. C.A. No. 12984-VCM (Del. Ch. Oct. 31, 2019). Delaware law sets a high bar to sufficiently plead a Caremark claim for failure of board oversight, especially when the plaintiff must satisfy...more

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