Once again, there are demands to reform corporate litigation. (See, e.g., Kevin LaCroix, “Time for Another Round of Securities Class Action Litigation Reform,” The D&O Diary, Oct. 23, 2018.) But once again, the Delaware...more
Busch v. Richardson, C.A. 2017-0868-AGB (November 14, 2018) -
A derivative complaint that meets the demand requirements of Rule 23.1 may be subject to later dismissal at the request of a properly formed and functioning...more
Zalmanoff v. Hardy, C.A. 12912-VCS (November 13, 2018) -
This decision holds that it is acceptable to make the needed disclosures to stockholders by sending them both a Form 10-K and proxy statement at the same time....more
Tilden v. Cunningham, C.A. 2017-0837-JRS (October 26, 2018) -
This is an interesting decision for many reasons. It includes a comprehensive analysis of when demand on a board is not excused, when ignoring a forum selection...more
The answer to the question posed in the title to this article may seem devious to you. After all, the answer must be “no” if we want anyone to serve on a corporate board of directors. Yet this question continues to pop up as...more
Leaf Invenergy Company v. Invenergy Wind LLC, C.A. 11830-VCL (April 19, 2018) -
This is an important decision because it points out that the breach of a contract does not always mean damages will be awarded....more
Arch Insurance Company v. Murdock, C.A. N16C-01-104 EMD CCLD (March 1, 2018) -
This decision upholds coverage under a D&O policy for a claim alleging fraud by directors. This is not too surprising as the Delaware...more
Cummings v. Eden, C.A. 13007-VCS (February 20, 2018) -
This decision is particularly helpful in clarifying the effect of Section 141 of the DGCL. A transaction that is passed by the vote of even a single disinterested...more
Dieckman v. Regency GP LP, C.A. 11130-CB (ORDER) (February 20, 2018) -
This Order is helpful in setting out how to plead that a board decision subject to a “good faith” test in an LP agreement did not meet that standard....more
Southpaw Credit Opportunity Master Fund LP v. Roma Restaurant Holdings Inc., C.A. 2017-0059-TMR (February 1, 2018) -
When stock is issued in violation of a stockholder agreement, the issuance is “void.” This has great...more
Where does your company want to be sued? Of course, the obvious answer is “nowhere.” But in this litigious country that is not realistic. However, to a large extent, companies can chose the forum to decide claims made against...more
Sarissa Capital Domestic Fund LP v. Innoviva Inc., C.A. 2017-0309-JRS (December 8, 2017) -
This is a great explanation of when a director is authorized to enter into an oral agreement that is enforceable, here to add two...more
Zohar II 2005-1 Limited v. FSAR Holdings Inc., C.A. No. 12946-VCS (Nov. 30, 2017) -
This is an important decision for two reasons. First, it determines when a proxy is irrevocable under Delaware law. To be irrevocable...more
While directors have the right to issue options, when the grant is to themselves and there are specific facts suggesting unfairness, those directors will have the burden of proving the grants were entirely fair in a...more
Stockholder approval of an equity compensation plan may or may not constitute ratification over awards to the directors under the plan. When it does, the Court of Chancery will review challenges under the business judgment...more
Even after a board rejects a plaintiff-stockholder’s demand to bring a derivative litigation, the plaintiff may proceed to bring that derivative action if the plaintiff can show the demand was “wrongful.” Having conceded...more
This decision holds that Revlon duties are not implicated by a decision to liquidate a company. Hence, the Court will not scrutinize whether the board sought to get the best possible deal for company assets....more
This is an almost unprecedented decision to limit the inspection rights of a corporate director. Directors generally have “essentially unfettered” access to the corporate records to fulfill their fiduciary roles. ...more
This is an excellent review of the law governing when the Court will enjoin board action that affects the ability of stockholders to elect directors....more
This initial formal decision by the recently-appointed Vice Chancellor shows her firm commitment to the tradition of the Court of Chancery to produce well-written, scholarly opinions. ...more
As is well known, a former director may be entitled to have his fees advanced in suits against him even after he has resigned from the board. ...more
This is one of those scarce cases dealing with director access to a corporation’s books and records. After all, Delaware law provides directors with an almost unlimited right to a corporation’s records needed for them to...more
This is an important and useful decision for at least two reasons. First, the Court carefully analyzes past Delaware precedent to conclude that the entire fairness test applies not just to squeeze-out mergers, but also to...more
This is another example of when a director may seek advancement when he is acting affirmatively and not merely as a defendant....more
Deciding if a director is sufficiently tied to a controller so as to be disqualified from passing on a transaction independently is an important decision because it may determine if a derivative suit meets the demand excuse...more