Eric Hacker on Breach of Contract

Chancery Decision Explains Availability of Reformation as a Targeted Remedy

AECOM, et al. v. SCCI Nat’l Hldgs., Inc., C.A. No. 2022-0727-MTZ (Del. Ch. Sept. 27, 2023) - Although the Court of Chancery frequently resolves contractual disputes, it grants contractual reformation only when...more

2/7/2024 / Breach of Contract , Contract Terms , Fraud , Shareholders

Chancery Refuses to Order Specific Performance Due to Inaccurate Representations and Warranties

Restanca, LLC v. House of Lithium, Ltd., C.A. No. 2022-0690-PAF (Del. Ch. Jun. 30, 2023) - The parties seeking specific performance of an agreement must establish a clear right to performance, including that all conditions...more

11/30/2023 / Acquisitions , Breach of Contract , Contract Termination , Contract Terms , Mergers

Entire Fairness Standard Applied to Transaction Benefitting Controllers of Controllers

Tueza v. Lindon, C.A. No. 2022-0130-SG (Del. Ch. Apr. 27, 2023) - Because controlling stockholders of Delaware corporations owe fiduciary duties to both the corporation and to its minority stockholders, the Court of...more

8/24/2023 / Board of Directors , Breach of Contract , Breach of Duty , Fiduciary Duty , Motion to Dismiss

Chancery Resolves Dispute About Competing Forum Selection and Arbitration Provisions

Fairstead Cap. Mgmt. LLC v. Blodgett, C.A. No. 2022-0673-JTL (Del. Ch. Jan. 6, 2023) - This case highlights the difficulties that can arise when relationships are governed by contracts with competing forum selection and...more

5/4/2023 / Arbitration , Arbitration Agreements , Breach of Contract , Contract Terms , Motion to Compel

Chancery Denies Bid to Dismiss Derivative Claims Amid Alleged “Gamesmanship” Regarding Composition of LLC’s Board of Managers

Schoenmann v. Irvin, C.A. 2021-0326-SG (Del. Ch. Jun. 2, 2022) - After the plaintiff filed his direct and derivative claims in April 2021, the defendants – the company and its controller – circulated in June 2021 a written...more

10/14/2022 / Breach of Contract , Breach of Duty , Demand Futility , Derivative Suit , Fiduciary Duty

Court Rejects Franchisor’s Attempt Based on Business Effects of COVID-19 to Escape Contractual Obligation to Purchase Franchisee’s...

Level 4 Yoga, LLC v. CorePower Yoga, LLC, C.A. No. 2020-0249-JRS (Del. Ch. March 1, 2022) - In this post-trial decision, the Court of Chancery awarded specific performance to Plaintiff/franchisee who sought to enforce...more

9/9/2022 / Breach of Contract , Material Adverse Effects , Merger Agreements , Mergers

Chancery Enforces Parties’ Merger Agreement That Barred Claims Upon Termination of the Agreement

Yatra Online, Inc. v. Ebix, Inc., C.A. No. 2020-0444-JRS (Del. Ch. Aug. 30, 2021) - Agreements frequently specify how the termination of the agreement affects the parties’ rights and obligations. This case illustrates that...more

11/4/2021 / Breach of Contract , Contract Termination , Merger Agreements , Mergers

Company Did Not Breach Mandatory Redemption Provision Where Special Committee Determined Company Lacked Funds To Redeem All...

Cont’l Investors Fund LLC v. TradingScreen, Inc., C.A. No. 10164-VCL (Del. Ch. July 23, 2021) - A holder of preferred stock often possesses redemption rights that permit the stockholder to require a company to repurchase...more

9/29/2021 / Breach of Contract , Preferred Shares , Right of Redemption , Special Committees

Chancery Explains Pleading Standard and Sustains Unjust Enrichment Claim Related to Plaintiff’s Forfeiture of LLC Acquisition...

Angel v. Warrior Met Coal, Inc., C.A. No. 2019-0235-SG (Del. Ch. Jun. 30, 2021) - Under Delaware’s notice pleading standard, a plaintiff’s claim will survive a motion to dismiss if it is “reasonably conceivable” that the...more

8/20/2021 / Breach of Contract , Breach of Duty , Fiduciary Duty , Limited Liability Company (LLC) , Pleading Standards , Unjust Enrichment

Delaware Court of Chancery Applies Direct/Derivative Distinction In Voting Context

Clifford Paper, Inc. v. WPP Investors, LLC, 2021 WL 2211694 (Del. Ch. Jun. 1, 2021) - The disenfranchisement of an investor with voting or consent rights often is considered to be a direct harm, thus permitting the...more

6/23/2021 / Breach of Contract , Breach of Duty , Duty of Loyalty , Fiduciary Duty , Investors

Chancery Enjoins Prosecution of Fraudulent Inducement and Declaratory Judgment Claims Based on Exclusive Delaware Forum Provision

SPay, Inc. v. Stack Media Inc. k/n/a JLC2011, Inc., et al., CA No. 2020-0540-JRS (Del. Ch. Mar. 23, 2021) - To obtain a preliminary anti-suit injunction, a movant must show (1) a reasonable likelihood of success on the...more

4/20/2021 / Asset Purchase Agreements , Breach of Contract , Fiduciary Duty , Forum Selection , Fraudulent Inducement , Restrictive Covenants

Delaware Supreme Court Concludes Out-of-Pocket Damages Are the Default Remedy for Fraudulent Misrepresentation Absent an...

LCT Capital, LLC v. NGL Energy Partners, LLP, App. Nos. 565,2019 & 568,2019 (Del. Jan. 28, 2021) - Delaware law recognizes both benefit-of-the-bargain damages and out-of-pocket damages as remedies for fraudulent...more

2/25/2021 / Breach of Contract , Damages , Fraud , Misrepresentation , Motion for Judgment

Superior Court Dismisses Successor-by-Merger’s Claims Where Underlying Contract Contained Anti-Assignment Clause

MTA Royalty Corp. v. Compania Minera Pangea, S.A. DE C.V., C.A. No. N19C-11-228 AML CCLD (Del. Super. Sept. 16, 2020) - Plaintiff’s predecessor-in-interest conveyed mineral rights to Defendant. Under the agreement,...more

11/23/2020 / Anti-Assignment Clauses , Breach of Contract , Buyers , Mergers , Sellers

Chancery Rejects Bid to Jettison USACafes and its Holding That, Absent Agreement to the Contrary, the Controllers of a Corporate...

Fannin v. UMTH Land Development, L.P. (In re: United Development Funding III, L.P.), C.A. No. 12541-VCF (Del. Ch. Jul. 31, 2020). The Court of Chancery has concluded that in certain situations, equity will, by default,...more

9/8/2020 / Board of Directors , Breach of Contract , Breach of Duty , Fiduciary Duty , Limited Partnerships

Even Though Evidence Supports Plaintiffs’ Fraudulent Inducement Claim, Chancery Denies Relief Where Plaintiff Never Gave Defendant...

HOMF II Investment Corp. v. Altenberg, C.A. No. 2017-0293-JTL (Del. Ch. May 19, 2020) - Due process requires that a plaintiff provide the defendant with fair notice of the plaintiff’s claims. As this recent post-trial...more

6/30/2020 / Breach of Contract , Breach of Duty , Fiduciary Duty , Fraudulent Inducement

Superior Court Stays First-Filed Declaratory Judgment Action in Nokia Technology Dispute

Nokia Solutions v. Collison Comm., Inc., C.A. No. N19C-10-262 AML CCLD (Del. Super. Apr. 30, 2020) - Delaware law recognizes several doctrines intended to respect principles of comity and the efficient administration of...more

6/3/2020 / Breach of Contract , Declaratory Judgments , Jurisdiction , Stays

Chancery Balances the Obligation to Defend an Arbitral Award from Collateral Attack with the Obligation to Defer to a Broad...

Gulf LNC Energy, LLC v. Eni USA Gas Marketing LLC, C.A. No. 2019-0460-AGB (Del. Ch. Dec. 30, 2019). Plaintiff (“Gulf”) invested over $1 billion to construct a facility designed to unload imported liquefied natural gas...more

1/24/2020 / Arbitration , Arbitration Awards , Breach of Contract , Negligent Misrepresentation

Delaware Superior Court Finds Purchase Agreement Language Limits the Scope of Possible Claims Concerning Earn-Out Dispute

Collab9, LLC v. En Pointe Technologies Sales, LLC, C.A. No. N16C-12-032 (MMJ) (CCLD) (Del. Super. Sept. 17, 2019). Under an asset purchase agreement (“APA”), the purchaser (“PCM”) acquired substantially all of the assets...more

10/17/2019 / Asset Purchase Agreements , Breach of Contract , Breach of Implied Contract , Earn-Outs , Fraud , Motion to Dismiss

Chancery Holds Tension Between “Bespoke” Provision Governing Post-Closing Conduct and a Boilerplate Survival Clause Requires...

Dolan v. Altice USA, Inc., C.A. No. 2018-0651-JRS (Del. Ch. Jun. 27, 2019). The founders of Cablevision Systems Corp., the Dolan family, in connection with a $17.7 billion acquisition of that entity by Altice Europe N.V....more

7/17/2019 / Breach of Contract , Declaratory Rulings , Merger Agreements , Mergers

Advancement Available for Post-Separation Misuse of Confidential Information Obtained “By Reason of the Fact” of Corporate Service

Ephrat v. medCPU, Inc., C.A. No. 2018-0852-MTZ (Del. Ch. Jun. 26, 2019). Former directors and officers may be entitled to advancement for post-separation conduct if that conduct is "by reason of the fact" of the directors'...more

7/10/2019 / Advancement , Breach of Contract , Confidential Information , Directors , Former Directors

Eric Hacker

Morris James LLP

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