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Court of Chancery Addresses the Scope of Summary Control Disputes and Effectiveness of Written Consents

Brown v. Kellar, C.A. No. 2018-0687-MTZ (Del. Ch. Dec. 21, 2018) - Control disputes, like those under Section 225 of the DGCL, are summary, narrow proceedings limited to the issues regarding title to office. The Court of...more

Court of Chancery Invalidates Federal Court Forum-Selection Provision for Securities Cases

Sciabacucchi v. Salzberg, C.A. No. 2017-0031-JTL (Del. Ch. Dec. 19, 2018) - Delaware law permits a Delaware corporation to include a forum-selection provision in its certificate of incorporation governing all “internal...more

Court of Chancery Declines to Expand Dual-Natured Direct and Derivative Claims Under Gentile

Klein v. H.I.G. Capital LLC, C.A. No. 2017-0862-AGB (Del. Ch. Dec. 19, 2018) - Under the Delaware Supreme Court’s Gentile decision, a claim may be dual-natured, meaning partially derivative on behalf of the corporation and...more

Court of Chancery Addresses Overlapping Appraisal and Fiduciary Duty Action

In re Xura Stockholder Litigation, C.A. No. 12608-VCS (Del. Ch. Dec. 10, 2018) - Lately, the Delaware Supreme Court has given great weight to the deal price in appraisal cases. As a result, plaintiffs have put a greater...more

Court of Chancery Addresses Fiduciary Insider Trading Claims Under Brophy in Fitbit Litigation

In re Fitbit Inc. Stockholder Derivative Litigation, C.A. No. 2017-0402-JRS (Del. Ch. Dec. 14, 2018) - Delaware law recognizes a claim for breach of fiduciary duty based on insider trading under the Brophy decision....more

Court Of Chancery Limits Zapata Test To Properly Filed Complaint

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

Court Of Chancery Dismisses Complaint Alleging Aiding and Abetting Claim

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

Delaware Supreme Court Explains the Ab Initio Requirement of MFW

Flood v. Synutra Int’l, Inc., C.A. No. 101, 2018 (Del. Oct. 9, 2018) - Under Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014), commonly referred to as MFW, a controller may gain the benefit of business judgment review...more

Court Of Chancery Explains Limits On Duty To Know

Marchland v. Barnhill, C.A. 2017-0586-JRS (September 27, 2018) - When something bad occurs in a business, it now seems inevitable that the directors may be sued. The most popular form of suit now seems to be a securities...more

Court Of Chancery Interprets Preferred Stock Rights

Cedarview Opportunities Master Fund L.P. v. Spanish Broadcasting System Inc. C.A. 2017-0785-AGB (August 27, 2018) - How to interpret the provisions of preferred stock is often a difficult task. Any preference must be...more

Court Of Chancery Interprets Contract Rights Under Commercially Rational Test

QC Holdings Inc. v. Allconnect Inc., C.A. 2017-0715-JTL (August 27, 2018) - This decision on a undisputed factual record interpreted a contractual right to put stock by rejecting one side’s argument as “commercially...more

Are Post-Merger Facts Ever Relevant?

Appraisal litigation is unique under Delaware law. In almost every instance you can think of, once an event provides a right to recover damages (such as a fire caused by negligence), what happens later is relevant to...more

Delaware District Court Explains Tolling Based on Books and Records Inspection

Norman v. Elkin, C.A. No. 06-005-LPS (D. Del. Sept. 4, 2018) - Litigation seeking to inspect a corporation’s records under Section 220 of the DGCL might toll the statute of limitations for certain claims under the right...more

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

So You Think You Know Delaware Law?

We all sometimes believe we know more than what we really do understand. Despite scholarly warnings about that tendency, it continues to mislead us. Now that same error is threatening the legal profession. Originally...more

Court of Chancery Clarifies Nature of Dilution Claims in Charter-Liberty Broadband Equity Issuance and Allows Derivative Challenge...

Sciabacucchi v. Liberty Broadband Corporation, C.A. No. 11418-VCG (Del. Ch. July 26, 2018) - This is the second notable decision arising out of litigation involving Charter Communication’s equity issuance to its largest...more

Delaware District Court Stays Twitter Derivative Case Pending Securities Action

In re Twitter Inc. Shareholder Derivative Litigation, C.A. No. 18-62-VAC-MPT (D. Del. July 23, 2018) - Several Court of Chancery decisions discuss the appropriateness of staying a derivative action pending a related...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 MFW Requirements

Olenik v. Lodzinski, C.A. No. 2017-0414-JRS (Del. Ch. July 20, 2018) - Transactions between a Delaware company and its controlling stockholder usually are subject to rigorous entire fairness review. But, under the MFW...more

Court of Chancery Explains Burden Needed to Support Inspection for Suspected Wrongdoing

Barnes v. Sprouts Farmers Market Inc., C.A. No. 2017-0735-MTZ (Del. Ch. July 18, 2018) - An investor seeking books and records for the purpose of investigating wrongdoing or mismanagement must establish a “credible basis”...more

Court Of Chancery Permits Validation Of Defective Merger

The Cirillo Family Trust v. Moezinia, C.A. 10116-CB (Del. Ch. July 11, 2018) - This is an interesting decision for three reasons. First, it gives a good discussion of when defective corporate acts can be cured under...more

Court of Chancery Denies Director Access to Records in the Redstone-CBS Corp. Dispute

In re CBS Corporation, C.A. No. 2018-0342-AGB (Del. Ch. July 13, 2018) - It is well settled that members of the board of directors are entitled to essentially unfettered access to the corporation’s records to carry out...more

Court of Chancery Imposes Over $20 Million in Damages on Investment Fund and Its Manager

Basho Technologies Holdco B LLC v. Georgetown Basho Investors LLC, C.A. No. 11802-VCL (Del. Ch. July 6, 2018) - This notable decision issued by the Court of Chancery holds an investment fund and its manager liable for over...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

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