Samuel Bashman on Fiduciary Duty

Chancery Rejects MFW Defense Based on Failure to Disclose That a Conflicted Controller Participated in Arbitration Proceedings...

Ligos v. Isramco, Inc., C.A. No. 2020-0435-SG (Del. Ch. Aug. 31, 2021) - Under MFW, a conflicted controller transaction may get the benefit of business judgment review when conditioned on two procedural protections...more

11/10/2021 / Board of Directors , Breach of Duty , Fiduciary Duty , Mergers , Shareholders

Chancery Denies Motion to Dismiss in Part Because Certain Discussions Between CEO and Acquirer Were not Disclosed in Proxy When...

Teamsters Local 237 Additional Security Benefit Fund v. Caruso, C.A. No. 2020-0620-PAF (Del. Ch. Aug. 31, 2021) - Under Revlon, a director must focus on obtaining a transaction that provides the maximum value for...more

11/4/2021 / Board of Directors , Breach of Duty , Fiduciary Duty , Mergers , Shareholders

Chancery Grants Anti-Suit Injunction, Holds Non-Signatory Subsidiary is Bound by Stock Purchase Agreement’s Forum Selection Clause

Fla. Chem. Co., LLC v. Flotek Indus., Inc., C.A. No. 2021-0288-JTL (Del. Ch. Aug. 17, 2021). Under Delaware law, a forum selection clause may be enforceable against a non-signatory if the non-signatory has a significantly...more

10/8/2021 / Anti-Suit Injunctions , Breach of Duty , Fiduciary Duty , Forum Selection , Purchase Agreement

Chancery Grants Special Litigation Committee’s Zapata Motion, Finds Committee Was Sufficiently Independent and Reasonable

Diep v. Sather, C.A. No. 12760-CM (Del. Ch. July 30, 2021) - Under Zapata, when analyzing a motion to dismiss by a special litigation committee, the court evaluates whether the committee was independent, acted in good...more

9/21/2021 / Board of Directors , Breach of Duty , Derivatives , Fiduciary Duty , Motion to Dismiss

Implied Covenant of Good Faith and Fair Dealing Saves Employee’s Claim for Improper Termination Under Company’s LLC Agreement

Smith v. Scott, C.A. No. 2020-0263-JRS (Del. Ch. Apr. 23, 2021) - The Delaware LLC Act provides that fiduciary duties may be expanded or limited by the provisions of an LLC agreement. If the agreement is silent, then...more

6/7/2021 / Breach of Contract , Breach of Duty , Covenant of Good Faith and Fair Dealing , Fiduciary Duty , Implied Covenants , Limited Liability Company (LLC) , LLC Agreements

Chancery Dismisses Derivative Breach of Contract Claim Against Directors for Alleged Violations of Certificate of Incorporation

Lacey v. Mota-Velasco, C.A. No. 2019-0312-SG (Del. Ch. Feb. 11, 2021) - A corporate charter represents a contractual agreement between the corporation and its stockholders. In Lacey, the Court of Chancery addressed...more

3/31/2021 / Board of Directors , Breach of Contract , Breach of Duty , Fiduciary Duty , Motion to Dismiss

Chancery Holds That a Deadlock Warranting Dissolution Can Be Genuine Even If the Circumstances Giving Rise to the Deadlock Were...

Mehra v. Teller, C.A. No. 2019-0812-KSJM (Del. Ch. Jan. 29, 2021) - In a dispute over the validity of the dissolution of a limited liability company, the Court of Chancery held in a post-trial opinion that a deadlock...more

3/9/2021 / Breach of Duty , Dissolution , Fiduciary Duty , Limited Liability Company (LLC)

Samuel Bashman

Morris James LLP

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