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Court of Chancery Enforces Redemption Rights and Addresses the Potential Effect of a Merger on Previously-Exercised Put Rights

QC Holdings Inc. v. Allconnect Inc., C.A. No. 2017-0715-JTL (Del. Ch. Aug. 28, 2018) - This decision is necessary reading for drafters of redemption rights. It involves the interpretation of a redemption rights agreement...more

Court of Chancery Validates Cure of Defective Corporate Acts Affecting Herman Miller’s Acquisition of DWR

Charles Almond Trustee v. Glenhill Advisors LLC, C.A. No. 10477-CB (Del. Ch. Aug. 17, 2018)- Sections 204 and 205 of the DGCL permit corporations to cure and validate defective corporate acts under the right circumstances....more

Court of Chancery Reviews Post-Closing Payments

Fortis Advisors LLC v. Stora Enso AB, C.A. No. 12291-VCS (Del. Ch. Aug. 10, 2018) - Many merger agreements provide for additional payments after closing depending on the target’s performance....more

Court of Chancery Explains When Market and Deal Price Are Not Fair Value In Appraisals

Blueblade Capital Opportunities LLC v. Norcraft Cos. Inc., C.A. No. 11184-VCS (Del. Ch. July 27, 2018) - This is an important appraisal decision because it examines, post-Dell and DFC, when the market price and deal price...more

Court of Chancery Explains Difference Between Experts and Arbitrators Under Delaware Law

Penton Business Media Holdings LLC v. Informa PLC, C.A. No. 2017-0847-JTL (Del. Ch. July 9, 2018) - This decision explains the difference between agreeing to have a dispute decided by an expert rather than an arbitrator. ...more

Court of Chancery Requires Bad Faith Disclosure Violations for Demand Futility

Ellis v. Gonzalez, C.A. No. 2017-0342-SG (Del. Ch. July 10, 2018) - The pre-suit demand on the board requirement for derivative litigation usually is not excused solely by a sufficiently pled disclosure violation....more

Court Of Chancery Explains When Claim Is Direct And Survives A Merger

In re Straight Path Communications Inc. Consolidated Stockholder Litigation, C.A. No. 2017-0486-SG (Del. Ch. June 25, 2018) - When a merger closes, stockholders of the acquired company generally lose standing to pursue...more

Court Of Chancery Holds That Dr. Pepper And Keurig Reverse Triangular Merger Does Not Trigger Appraisal Rights

City Of North Miami Beach General Employees’ Retirement Plan v. Dr. Pepper Snapple Group Inc., C.A. No. 2018-0227-AGB (Del. Ch. June 1, 2018) - In a reverse triangular merger, a parent company uses a subsidiary to acquire...more

Court Of Chancery Stresses Proper Procedure When Relying On A Contractual Safe Harbor In The MLP Context

In Re Energy Transfer Equity, L.P. Unitholder Litigation, C.A. No. 12197-VCG (Del. Ch. May 17, 2018) - Conflicted transactions are commonplace in the master limited partnership (MLP) context. The entity’s operating...more

Court of Chancery Defends Aruba Networks Appraisal Decision

This opinion arises out of the appraisal proceeding relating to Hewlett-Packard’s purchase of Aruba Networks. The case led to two notable opinions, so far. The first notable opinion was the Court’s original post-trial...more

Court Of Chancery Applies Corwin And Test For Control

Peter Van Der Fluit v. Yates, C.A. No. 12553-VCMR (Nov. 30, 2017) - Briefly, under Corwin, the informed vote of a majority of the disinterested stockholders subjects a transaction to the business judgment rule when the...more

Court Of Chancery Favors Plain Language In Earn-Out Dispute And Declines To Imply Contractual Terms

Greenstar IH Rep. LLC v. Tutor Perini Corporation, C.A. No. 12885-VCS (Oct. 31, 2017) - With every contract under Delaware law comes the obligation to not act so as to deprive the counter party of the benefit of its...more

Court Of Chancery Addresses The Need For Legally-Distinct Co-Conspirators Under A Conspiracy Theory Of Jurisdiction

The general rule is that personal jurisdiction based on a conspiracy theory cannot rely on allegations of an individual officer conspiring with his corporate employer. There is a possible exception, however, when the officer...more

Court Of Chancery Gives Guidance On What Constitutes Bad Faith

In Re Meadwestvaco Stockholders Litigation, C.A. No. 10617-CB (August 17, 2017) - As this decision explains, to state a claim attacking a merger on the basis that the Board acted in bad faith you need more than ...more

Court Of Chancery Upholds Claim Based On Low-Ball Self Tender

Buttonwood Tree Value Partners L.P. v. R.L. Polk & Co. Inc., C.A. No. 9250-VCG (July 24, 2017) - This an interesting decision because it upholds a claim that the controllers of a Delaware corporation breached their...more

Court Of Chancery Protects Privilege In Books and Records Action And Addresses Corwin’s Effect On Mismanagement Investigation...

Salberg v. Genworth Financial Inc., C.A. No. 2017-0018-JRS (July 27, 2017) - This is an important decision for its analyses implicating the Garner and Corwin rules. The Garner rule is that, under certain narrow...more

Court Of Chancery Explains Fraud Pleading Standards

Sparton Corporation v. O’Neil, C.A. 12403-VCMR (August 9, 2017) - This decision explains what needs to be alleged to state a fraud claim. ...more

Delaware Supreme Court Reverses DFC Global And Clarifies The Deal Price’s Role In Appraisal Litigation

DFC Global Corporation v. Muirfield Value Partners L.P., No. 518, 2016 (Del. Aug. 1, 2017) - Delaware law has long made clear that the deal price for a company, while relevant, does not necessarily equate to the “fair...more

Court Of Chancery Upholds Deal Price As Fair Value In Appraisal Case

The Court of Chancery continues to wrestle with the issue of when the negotiated deal price represents "fair value" in an appraisal case. Here, serious problems with the management projections led the Court to reject a...more

Court Of Chancery Appraises Company Below Deal Price

Recent criticism of appraisal arbitrage argues that it comes without real risk to the petitioners. This appraisal decision, which values the company below the deal price based on a discounted cash flow analysis, should be...more

Court Of Chancery Rejects Novel Breach Of Appraisal Rights Claim

This decision begins with a conventional analysis of a claim that disclosure violations and director self-interest have tainted a merger vote. That claim was rejected for want of factual support. More unusual, the decision...more

Court Of Chancery Explains The “Known Looter” Theory For Controllers

This is an interesting decision because it examines an intriguing legal theory for holding a controlling stockholder liable in a sale: the “known looter” theory. Generally speaking, controllers can sell their stock to whoever...more

Where Is Delaware Corporate Litigation Going?

Litigation involving Delaware corporate law is undergoing major changes. Some commentators predict that Delaware will cease to be the favored forum for M&A litigation. While we disagree with that forecast, it is important to...more

Court Of Chancery Denies Corwin Defense

This is a significant decision because it is the first to find that a stockholder vote did not invoke business judgment review under Corwin because the vote was coerced and not fully informed. Under Corwin, a transaction...more

Court Of Chancery Rejects Vague Demand Excusal Allegations

This is an interesting decision because it applies the rules for determining when a derivative plaintiff, in the LLC context, has sufficiently alleged that pre-suit demand on the board would have been futile. ...more

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