Bryan Townsend at Morris James LLP

Chancery Addresses Indemnification Rights Following CEO’s Partial Success On Underlying Claims, Including Success Based on...

Evans v. Avande, Inc. , C. A. No. 2018-0454-LWW (Del. Ch. Sept. 23, 2021) - The departure of a company’s CEO was contentious. After his termination, the company filed an action in the Court of Chancery, alleging that the...more

12/17/2021 / Attorney's Fees , Breach of Duty , CEOs , Fiduciary Duty , Indemnification , Litigation Fees & Costs

Chancery Dismisses Derivative Claims Alleging Insider Trading and Misleading Disclosures for Failure to Plead Demand Futility

In re Zimmer Biomet Hldgs., Inc. Deriv. Litig., C.A. No. 2019-0455-LWW (Del. Ch. Aug. 25, 2021) - Under Court of Chancery Rule 23.1, a stockholder-plaintiff may only bring a derivative suit on behalf of a company if the...more

10/20/2021 / Breach of Duty , Demand Futility , Derivative Suit , Fiduciary Duty , Insider Trading

Chancery Denies Motion to Dismiss, Awaits Development of Factual Record to Rule on Laches Defense

Kim v. Coupang, LLC, C.A. No. 2020-0772-JRS (Del. Ch. Aug. 19, 2021) - If a court can rule on the affirmative defense of laches on the face of a complaint, it may grant a motion to dismiss. As this case illustrates,...more

10/19/2021 / Breach of Contract , Laches , Motion to Dismiss , Statute of Limitations

Applying Plain Contract Language, Chancery Awards $147 Million in Damages to Start-Up Company for Breach of Joint Venture...

Symbiont.io, Inc. v. Ipreo Hldgs., LLC, C.A. No. 2019-0407-JTL (Del. Ch. Aug. 13, 2021) - Delaware is a pro-contractarian state. When fashioning an award for a breach of contract, a Delaware court can consider: (1) the...more

10/14/2021 / Board of Directors , Breach of Contract , Joint Venture , Non-Compete Agreements

Superior Court CCLD Dismisses Complaint Seeking Insurance Coverage for Appraisal Proceeding

Jarden, LLC v. ACE Am. Ins. Co., C.A. No. N20C-03-112 AML CCLD (Del. Super. July 30, 2021) - Director and corporate liability insurance coverage is determined by the specific language of the insurance policies. Last year,...more

9/24/2021 / Appraisal , Appraisal Rights , Business Valuations , Fair Market Value , Mergers , Shareholders

Chancery Confirms Operation of Savings Statute and Tortious Interference Framework in Dispute Involving Fiduciaries with Competing...

Skye Mineral Invs., LLC v. DXS Capital (U.S.) Ltd., C.A. No. 2018-0059-JRS (Del. Ch. July 28, 2021) - Delaware’s savings statute—10 Del. C. § 8118(a)—protects claims from being time-barred where they were timely brought in...more

9/10/2021 / Board of Directors , Breach of Duty , Fiduciary Duty , Statute of Limitations

Court of Chancery Denies Lead Plaintiff’s Application for Incentive Fee from Overall Fee Award

Morrison v. Berry, C.A. No. 12808-VCG (Del. Ch. July 12, 2021) - Delaware courts generally do not award special compensation to lead plaintiffs in class action litigation. Delaware courts typically limit awards to...more

9/8/2021 / Attorney's Fees , Class Action , Class Representatives , Fee Awards

Superior Court Enforces $48 Million Liquidated Damages Provision

Smart Sand Inc. v. US Well Servs. LLC, C.A. No. N19C-01-144 PRW CCLD (Del. Super. June 11, 2021) - A liquidated damages provision is enforceable under Delaware law if: (1) damages are uncertain at the time of contracting;...more

8/9/2021 / Breach of Contract , Breach of Implied Contract , Counterclaims , Damages , Liquidated Damages

Superior Court Upholds Claims that Entities Transferred Funds in Violation of Agreements with Creditor

CIBC Bank USA v. JH Portfolio Debt Equities, LLC, C.A. No. N18C-07-130 EMD CCLD (Del. Super. June 2, 2021) - Plaintiff CIBC Bank USA (“CIBC”) entered into a credit agreement with a group of borrowers to provide them with a...more

7/23/2021 / Breach of Contract , Covenant of Good Faith and Fair Dealing , Implied Covenants , Personal Jurisdiction

Clean-Up Doctrine to Adjudicate Legal Claims in Chancery May Take Precedence Over Request for Jury Trial

Firststring Research, Inc. v. JSS Medical Research Inc., C.A. No. 2020-0332-KSJM (Del. Ch. May 28, 2021) - Delaware has not merged its courts of law and equity, which may have implications for a litigant seeking a jury...more

7/22/2021 / Breach of Contract , Jury Trial , Motion to Transfer , Subject Matter Jurisdiction

Court of Chancery Stays Action for Violation of Rule against Claim Splitting Pending Resolution of a Duplicative Federal Action

Goureau v. Lemonis, C.A. No. 2020-0486-MTZ (Del. Ch. Mar. 30, 2021) Delaware follows the modern “transactional” view of claim splitting, which bars a plaintiff from bringing bring duplicative proceedings in different courts...more

4/29/2021 / Corporate Dissolution , Derivative Suit , Dissolution , Limited Liability Company (LLC) , Operating Agreements

Court of Chancery Harmonizes Operating Agreement Governance Provisions To Resolve LLC Control Dispute

Pearl City Elevator, Inc. v. Gieseke, C.A. No. 2020-0419-JRS (Del. Ch. Mar. 23, 2021) - Under Delaware law, limited liability company agreements are interpreted like other contracts; they are read as a whole in light of...more

4/15/2021 / Business Disputes , Fiduciary Duty , Limited Liability Company (LLC) , LLC Agreements , Operating Agreements

Chancery Finds After Trial That $10 Billion Unit-for-Unit Merger Was “Fair and Reasonable” Under Partnership Agreement

Dieckman v. Regency GP LP, C.A. No. 11130-CB (Del. Ch. Feb. 15, 2021) - This matter concerned limited partners’ challenge under the governing limited partnership agreement to an acquisition of the partnership by another...more

3/18/2021 / Breach of Contract , Covenant of Good Faith and Fair Dealing , Mergers , Partnership Agreements , Partnerships

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

2/26/2021 / Board of Directors , Breach of Duty , Business Judgment Rule , Controlling Stockholders , Duty of Loyalty , Fiduciary Duty

Chancery Construes Notice Provisions Associated With Escrowed Funds Under an Asset Purchase Agreement

Schillinger Genetics, Inc. v. Benson Hill Seeds, Inc., C.A. No. 2020-0260-MTZ (Del. Ch. Feb. 1, 2021) - Delaware courts will apply the plain terms of an unambiguous asset purchase agreement (“APA”), including its...more

2/25/2021 / Asset Purchase Agreements , Breach of Contract , Indemnification

Superior Court Applies Affiliate Privilege Doctrine To Dismiss Tortious Interference Claim Against Controller, While Sustaining...

Surf’s Up Legacy Partners, LLC v. Virgin Fest, LLC, C.A. No. N19C-11-092 PRW CCLD (Del. Super. Jan. 13, 2021) - In adjudicating a dispute over a scuttled deal in the music festival industry, the Delaware Superior Court...more

2/25/2021 / Breach of Contract , Fraud , Limited Liability Company (LLC) , Motion to Dismiss

Chancery Declines to Order Specific Performance of $5.8 Billion Luxury Hotel Deal Scuttled by COVID-19 Changes to Hotel Business...

AB Stable VIII LLC v. MAPS Hotels and Resorts One LLC, C.A. No. 2020-0310-JTL (Del. Ch. Nov. 30, 2020) - Parties to a sale and purchase agreement (“SPA”) had planned to close a deal to sell fifteen luxury hotels for $5.8...more

1/22/2021 / Board of Directors , Breach of Contract , Mergers , Shareholders

Delaware Superior Court Applies Law-of-the-Case Doctrine and Collateral Estoppel to a Prior Chancery Proceeding

Preston Hollow Capital LLC v. Nuveen LLC, C.A. No. N19C-10-107-MMJ [CCLD] (Del. Super. Dec. 15, 2020) - Plaintiff and defendants competed as institutional investors in the high-yield municipal bond market. Seeking to...more

1/22/2021 / Broker-Dealer , Collateral Estoppel , Institutional Investors , Investors , Law of the Case Doctrine , Municipal Bonds

Delaware Supreme Court Finds that Court of Chancery Had Jurisdiction To Enjoin a Collateral Attack on a Prior Arbitration Award...

Gulf LNG Energy, LLC v. ENI USA Gas Mktg., LLC, No. 22, 2020 (Del. Nov. 17, 2020) - This decision confirms that the Court of Chancery has jurisdiction to enjoin a collateral attack on a prior arbitration award. The...more

1/18/2021 / Arbitration Awards , Collateral Estoppel , DE Supreme Court , Federal Arbitration Act

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

12/23/2020 / Board of Directors , Breach of Contract , Breach of Duty , CEOs , Fiduciary Duty , Shareholders

Chancery Questions Utility of Aronson Test, Dismisses Derivative Suit of Facebook Stockholder for Failure To Allege Demand...

United Food and Comm. Workers Union v. Zuckerberg, C.A. No. 2018-0671-JTL (Del. Ch. Oct. 26, 2020) - In its recent decision in United Food and Comm. Workers Union v. Zuckerberg, the Court of Chancery discussed the legal...more

12/3/2020 / Breach of Duty , Demand Futility , Derivative Suit , Fiduciary Duty , Pleadings , Shareholder Litigation , Shareholders

Chancery Finds Warrant Issuance Triggered Stockholder Preemption Rights

L-5 Healthcare Partners, LLC v. Alphatec Holdings, Inc., C.A. No. 2019-0412-KSJM (Del. Ch. Oct. 12, 2020) - Pursuant to a share purchase agreement, a plaintiff stockholder had preemption rights that entitled the...more

11/25/2020 / Common Stock , Preemption , Share Purchase Agreements , Shareholders

Chancery Addresses Contract and Fraud Claims Relating to M&A Post-Closing Price Adjustments

Roma Landmark Theaters, LLC v. Cohen Exhibition Co., LLC, C.A. No. 2019-0585-PAF (Del. Ch. Sept. 30, 2020) - In Roma Landmark Theaters, the parties’ purchase agreement contained a framework for post-closing price...more

10/29/2020 / Acquisitions , Buyers , Buying a Business , Purchase Agreement , Purchase Price Adjustment , Sellers

Chancery Holds Statutory Rights to Inspect Books and Records of a Delaware Corporation are Subject to the Internal Affairs...

JUUL Labs, Inc. v. Grove, C.A. No. 2020-0005-JTL (Del. Ch. Aug. 13, 2020) - Stockholder inspection rights are a core matter of the governance of a corporation. This decision holds that, pursuant to the internal affairs...more

9/22/2020 / Books & Records , Choice-of-Law , Internal Affairs Doctrine , Section 220 Request , Shareholders

Chancery Determines Validity of LLC Ownership Following Fraud and Deceit in Cross-Border Control Dispute

Lynch v. Gonzalez, C.A. No. 2019-0356-MTZ (Del. Ch. July 31, 2020) - Disputes over control of a Delaware limited liability company can turn on rigorous fact-finding efforts by the Court of Chancery where issues of witness...more

9/8/2020 / Beneficial Owner , Business Ownership , Fraudulent Inducement , Limited Liability Company (LLC)

Bryan Townsend

Morris James LLP

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