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Chancery Denies Director Access to Privileged Materials Involving Counsel to Preferred-Appointed Directors

Gilmore v. Turvo, Inc., C.A. No. 2019-0472-JRS (Del. Ch. Aug. 19, 2019). As several Delaware decisions teach, each director, as a member of the larger deliberative body that is the board, has a fundamental right to access...more

Chancery Addresses Ripeness for Indemnification Claims Concerning Tax Liabilities

Hill v. LW Buyer LLC, C. A. No. 2017-0591-MTZ (Del. Ch. July 31, 2019). As this summary judgment decision illustrates, even where parties to a securities purchase agreement agree on a buyer’s entitlement to indemnification...more

Chancery Offers Guidance on When the Limitations Periods Begin to Run For Claims Concerning Breaches of Representations and...

Kilcullen v. Spectro Scientific, Inc., C.A. No. 2018-0429-KSJM (Del. Ch. July 15, 2019). Delaware law provides for a default three-year statute of limitations period for breaches of contract, generally applicable to claims...more

Delaware Superior Court Addresses Choice of Law Issues in the D&O Insurance Context and Requires Carriers to Cover Pfizer’s...

Pfizer Inc. v. Arch Insurance Co., C.A. No. N18C-01-310 PRW CCLD (Del. Super. July 23, 2019). This case from the Delaware Superior Court discusses important D&O coverage exclusion issues that frequently arise during...more

Chancery Dismisses Oversight Claims Against J.C. Penney Board

Rojas v. Ellison, C.A. No. 2018-0755-AGB (Del. Ch. July 29, 2019). As this Court of Chancery decision explains, the Delaware standard for imposing oversight liability on a board of directors under a Caremark theory is...more

Chancery Decides Questions of First Impression Regarding Statutory Claims for Unlawful Dividends and Fraudulent Transfers

Enforcement mechanisms available to creditors of Delaware corporations may include, inter alia, claims against directors to recover unlawful dividends under Section 174 of the Delaware General Corporation Law (8 Del. C....more

Chancery Dismisses Merger Challenge Concerning Board’s Delegation of Merger Negotiations and Management’s Undisclosed Compensation...

In re Towers Watson & Co. Stockholder Litigation, C.A. No. 2018-0132-KSJM (Del. Ch. July 25, 2019). The ultimate responsibility for considering a merger falls on the board to carry out consistent with each directors’...more

Chancery Sustains Claims Against Special Committee Members Concerning Stock Incentive Plan

Reith v. Lichtenstein, C.A. No. 2018-0277-MTZ (Del. Ch. June 28, 2019). As Reith explains, directors may lose the protections of the business judgment rule and expose themselves to liability if they knowingly or...more

Chancery Finds Unauthorized Transfer of LLC Interest Void and Denies Transferee Inspection Rights

Absalom Absalom Trust v. Saint Gervais LLC, C.A. No. 2018-0452-TMR (Del. Ch. June 27, 2019). Plaintiff was assigned a membership interest in the defendant, a Delaware limited liability company, and sought to exercise books...more

Citing Trulia and Walgreens Decisions, Federal District Court Orders Plaintiffs’ Counsel to Return Agreed-Upon Mootness Fee

House v. Akorn, Inc., Consol. Nos. 17-C-5018, 17-C-5022, 17-C-5026 (N.D. Ill. Jun. 24, 2019). Disclosure-only settlements of stockholder class actions have received increased scrutiny following the Delaware Court of...more

Delaware Supreme Court Highlights Risks Involved in Court Rules Governing Confidential Filings

DowDuPont Inc. v. The Chemours Co., C.A. No. 2019-0351 (Del. June 26, 2019). A recent Delaware Supreme Court Order emphasizes the risks associated with the presumptions of public access to court filings and the...more

Chancery Denies Corwin Defense Based on Proxy Omissions and Sustains Claims Against Financial Advisor

Chester Cty. Emps.’ Ret. Fund v. KCG Holdings, Inc., C.A. No. 2017-0421-KSJM (Del. Ch. June 21, 2019). Under Corwin v. KKR Financial Holdings LLC, 125 A.3d 304 (Del. 2015), Delaware courts generally will dismiss...more

Chancery Declines to Dismiss Derivative Claim Challenging Compensation of Goldman Sachs Directors

Stein v. Blankfein, C.A. No. 2017-0354-SG (Del. Ch. May 31, 2019). Recently, the Delaware Supreme Court held in In re Investors Bancorp, Inc. Stockholder Litigation, 177 A.3d 1208 (Del. 2017) that stockholder approval of...more

Delaware Supreme Court Revives Fiduciary Duty Claims in Derivative Lawsuit Concerning Blue Bell’s Listeria Outbreak

Marchand v. Barnhill, No. 533, 2018 (Del. June 19, 2019). As this decision illustrates, while Delaware law imposes a high bar for pleading demand futility and fiduciary oversight claims under what is known as a Caremark...more

Delaware Superior Court Finds Civil Investigation Demand Triggers Insurer’s Duty to Defend Insured

Conduent State Healthcare v. AIG Specialty, C. A. No. N18C-12-074 MMJ (Del. Super. June 24, 2019). Addressing an issue for which there is a split in authority, the Delaware Superior Court held that a Civil Investigative...more

Chancery Finds Company Exceeds Authority Under Advance Notice Bylaw

Saba Capital Master Fund, Ltd. v. Blackrock Credit Allocation Income Trust, C.A. No. 2019-0416-MTZ (Del. Ch. June 27, 2019). Delaware courts construe advance notice by-laws against the drafter in favor of stockholder...more

Chancery Finds Advancement Decision Not Immediately Appealable When Reasonableness Disputes Remain

Sider v. Hertz Global Holdings Inc., C.A. No. 2019-0237-KJSM (Del. Ch. Jun 17, 2019). Prior to this ruling, no Delaware opinion had addressed the question of whether decisions granting entitlement to advancement rights are...more

Chancery Finds Former Limited Partner Lacks Standing to Seek Books and Records

Greenhouse v. Polychain Fund I LP, C.A. No. 2018-0214-JRS (Del. Ch. May 29, 2019). Seeking to inspect an entity’s books and records to value an investment typically is a proper purpose. But a plaintiff must have standing...more

Chancery Addresses the Direct and Derivative Claim Distinction and Demand Futility in the LLC Context

Stone & Paper Investors LLC v. Blanch, C.A. No. 2018-0394-TMR (Del. Ch. May 31, 2019). Plaintiff sued Defendants, who were supposed to manage the parties’ limited liability company, directly and derivatively for breaching...more

Chancery Unseals Confidential Complaint for Failure to Comply With Court Rules

The Chemours Co. v. DowDupont Inc., C.A. No. 2019-0351-SG (Del. Ch. June 7, 2019). The Delaware courts have long tried to balance the public’s right of access to information about judicial proceedings with the legitimate...more

Chancery Finds Adequately Pled Breach of Fiduciary Duty Based on Course of Disruptive Conduct

Klein v. Wasserman, C. A. No. 2017-0643-KSJM (Del. Ch. May 29, 2019). The typical claim for breach of fiduciary duty arises out of a single transaction or event, or several closely-related transactions or events. ...more

Court of Chancery Enforces the Absolute Litigation Privilege

Ritchie CT Opps, LLC v. Huizenga Managers Fund, LLC, C.A. No. 2018-0196-SG (Del. Ch. May 30, 2019). The absolute litigation privilege is an affirmative defense that bars claims arising from statements made in the course...more

Chancery Upholds Austrian Forum Selection Clause

Germaninvestments Ag. and Herrling v. Allomet Corporation and Yanchep LLC, C.A. No. 2018-0666-JRS (Del. Ch. May 23, 2019). As this case illustrates, Delaware courts generally respect and enforce forum selection clauses,...more

Chancery Orders Dissolution of Pharmaceutical LLC

Acela Investments LLC v. DiFalco, C.A. No. 2018-0558-AGB (Del. Ch. May 17, 2019). Because LLCs are “creatures of contract” and the policy of the Delaware Limited Liability Company Act is to give maximum effect to the...more

Superior Court Complex Commercial Litigation Division Holds Settlements Arising out of Dole Stockholder Litigations Constitute...

Arch Insurance Co. v. Murdock, C.A. No. N16C-01-104 (EMD)(CCLD) (Del. Super. May 7, 2019). After trial and an adverse judgment in the amount for $148 million for breach of the duty of loyalty in a going private merger In...more

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