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Chancery Dismisses Oversight Claim Based on Board’s Response to Red Flags

In re McDonald's Corp. Stockholder Derivative Litig., CA No. 2021-0324-JTL (Del. Ch. March 1, 2023) - A plaintiff can plead an oversight claim against a board by alleging particularized facts to support an inference that...more

Chancery Denies Motion to Dismiss Finding Primedia Argument Inapplicable

In Re Orbit/FR, Inc. Stockholders Litig., C.A. No. 2018-0340-SG (Del. Ch. January 9, 2023) - In In re Primedia, Inc. S’holders Litig., 67 A.3d 455 (Del. Ch. 2013), the Court examined whether a litigation asset being...more

Supreme Court Interprets an Alleged Irrevocable Proxy and Finds It Does Not Run with Shares and Bind Subsequent Owner

KTS Strategies brings years of experience providing clients in a diverse range of industries with comprehensive policy and advocacy advice before federal, state, and local agencies. In North Carolina, we advise local...more

Chancery Upholds Claims Post-Merger

Harris v. Harris, C.A. No. 2019-0736-JTL (Del. Ch. Jan. 6, 2023) - Delaware law allows for two exceptions to the continuous stock ownership rule for stockholders to bring and maintain standing to assert derivative claims...more

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

Court of Chancery Rules That Corporate Officers Have a Duty of Oversight Within Their Corporate Area of Responsibility

Delaware courts have firmly established that directors have oversight duties under the good-faith component of the fiduciary duty of loyalty. In the seminal Caremark decision, the Delaware Court of Chancery held that...more

Chancery Orders Stay of “Dr. J” Litigation Pending Arbitrator’s Decision on Arbitrability

Erving v. ABG Intermediate Holdings 2, LLC, C.A. No. 2021-0816-NAC (Del. Ch. Nov. 28, 2022) - Basketball legend Julius W. Erving II, also known as “Dr. J”, sold a majority interest in his trademark and other intellectual...more

Chancery Rules That Delisted and Long-Dark Corporation Failed To Show Harm Warranting a Confidentiality Order for Basic Financial...

Rivest v. Hauppauge Digital, Inc., C.A. No. 2019-0848-PWG (Del. Ch. Sept. 1, 2022) - Plaintiff stockholder sought to inspect the books and records of a defendant company, requesting a narrow universe of annual and...more

Chancery Finds Asset Purchase Agreement Required Buyer to Indemnify Seller for Liability Under State Tobacco Settlement

ITG Brands LLC v. Reynolds Am., Inc., C.A. No. 2017-0129-LWW (Del. Ch. Sept. 30, 2022) - Plaintiff acquired four cigarette brands from the defendant under an asset purchase agreement. Prior to entering into the APA, the...more

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

Chancery Sustains Claims for Improper Termination of Agreements For Cause in Connection with a Joint Venture to Develop Data...

W.D.C. Holdings, LLC v. IPI Partners, LLC, C.A. No. 2020-1026-JTL (Del. Ch. June 22, 2022) - Two entities entered into a joint venture to develop data centers for Amazon. One entity managed the joint venture day to day,...more

Chancery Dismisses Claims Alleging Directors Approved Spring-Loaded Stock Options Before Press Releases on COVID-19 Vaccine...

In re Vaxart, Inc. S’holder Litig., Consol. C.A. No. 2020-0767-PAF (Del. Ch. June 3, 2022) - A small biotechnology company issued a press release that connected the company to the federal government’s Operation Warp Speed...more

Chancery Dismisses Claims in Favor of Arbitration in Dispute over Sale of Pittsburgh Penguins

Wildfire Productions, L.P. v. Team Lemieux LLC, C.A. No. 2021-1072-PAF (Del. Ch. June 29, 2022) - The Federal Arbitration Act and the public policy of Delaware favor the resolution of disputes through arbitration....more

Chancery Declines to Order Acquirer to Make Contingent Payments after Discontinuing Development of a Medical Product

Pavel Menn v. ConMed Corp., C.A. No. 2017-0137-KSJM (Del. Ch. June 30, 2022) - Plaintiff was a representative of stockholders who had entered into a stock purchase agreement (“SPA”), in which the defendant acquired a...more

A Proposal to Permit Equitable Defenses to Noncompliant Acts That Are Described as 'Void' in an LLC Agreement

In CompoSecure v. CardUX, 206 A.3d 808 (Del. 2018), the Delaware Supreme Court held that when parties use the word “void” to describe the consequences of a noncompliant act under an LLC agreement, the act is deemed void ab...more

Chancery Dismisses Claims Seeking to Unwind Secondary Transactions that Allegedly Jeopardized Recovery for Primary Fraudulent...

Burkhart v. Genworth Fin., Inc., C.A. No. 2018-0691-JRS (Del. Ch. May 10, 2022) - The plaintiffs were a putative class of policyholders and insurance agents with an interest in long-term care insurance policies written by...more

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

Superior Court Classifies Cryptocurrency as a Security and Calculates Contract Damages Based on Cryptocurrency Valuation

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

Delaware Supreme Court Interprets Deadline for Bringing Indemnification Claims

North American Leasing, Inc. v. NASDI Holdings, LLC, No. 192, 2020 (Del. Apr. 11, 2022) - Defendants acquired construction entities from plaintiffs and agreed to indemnify plaintiffs for any losses arising from performance...more

Superior Court CCLD Determines D&O Insurance Policy Does not Cover Defense Costs in Statutory Appraisal Proceeding

MPM Holdings, Inc. v. Federal Ins. Co., C.A. No. N20C-07-014 MMJ CCLD (Del. Super. Ct. Mar. 17, 2022) - In recent years, the Delaware Supreme Court has pointed out that directors and officers liability insurance might not...more

Chancery Finds AT&T Failed to Satisfy Entire Fairness Review in a Freeze-Out of Minority Partners in Local Spectrum Partnership

In re Cellular Telephone P’ship Litig., Coordinated C.A. No. 6885-VCL (Del. Ch. Mar. 9, 2022) - A controller that stands on both sides of a freeze-out transaction has the burden to prove that its acquisition was entirely...more

Application of a Voting Limitation in the Company’s Charter to Invalidate Stockholder Votes in a Proxy Contest Was Improper

Under Delaware law, director actions are twice-tested: first for legal authorization under a company’s organizational documents or positive law, and second under equitable fiduciary principles. A company’s organizational...more

Delaware Uniform Arbitration Act Did Not Permit the Court of Chancery to Confirm or Vacate an Interim Partial Arbitration Award...

Astrum Fund I GP, LP v. Maracci, C.A. No. 2020-0919-PAF (Del. Ch. Jan. 27, 2022) - Maracci v. Astrum Fund I GP, LP, C.A. No. 2021-0073-PAF (Del. Ch. Jan. 27, 2022) A limited partnership agreement’s dispute resolution...more

Chancery Dismisses Action for Declaratory and Injunctive Relief for Lack of Subject Matter Jurisdiction on Grounds that the...

Qlarant, Inc. v. IP Commercialization Labs, LLC, C.A. No. 2021-0574-MTZ (Del. Ch. Jan. 25, 2022) - Pursuant to an asset purchase agreement, the plaintiff buyer purchased assets from a seller and several of its affiliates....more

After Entry of Default Judgment, Chancery Grants Leave to Amend Complaint to Add a New Claim for Reverse Veil-Piercing Against Two...

P.C. Connection, Inc. v. Synygy Ltd., C.A. No. 2020-0869-JTL (Del. Ch. Jan. 10, 2022) - After entry of a default judgment for liability, but before entry of a judgment awarding relief, the Court of Chancery granted the...more

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