Tyler O'Connell on Breach of Contract

Chancery Orders Specific Performance of Deal, Despite Lack of Debt Financing, Finding that COVID-Related Business Decline Was Not...

Snow Phipps Grp., LLC v. KCake Acquisition, Inc., 2020-0282-KSJM (Del. Ch. Apr. 30, 2021) - In Snow Phipps, the Court of Chancery refused to allow a private equity buyer with pandemic-related cold feet to back out of its...more

6/15/2021 / Breach of Contract , Contract Terms , Merger Agreements , Mergers

Chancery Shifts Attorneys’ Fees, Reasoning Perjury Is Bad Faith Per Se

Lyons Ins. Agency Inc. v. Wilson, C.A. No. 2017-0092-SG (Del. Ch. Apr. 29, 2021). In this action, the Court of Chancery noted that it heard “perhaps the most cogent, and certainly the briefest, argument for fee shifting...more

6/2/2021 / Breach of Contract , Employment Contract , Fee-Shifting , Non-Compete Agreements , Restrictive Covenants

Chancery Refuses to Enforce Alleged Contractual Rights Not Obtained at the “Negotiating Table”

Obsidian Fin. Grp., LLC v. Identity Theft Guard Solutions, Inc., C.A. No: 2020-0485-JRS (Del. Ch. Apr. 22, 2021) - Delaware is “more contractarian” than many other jurisdictions. Accordingly, as this case illustrates, a...more

5/26/2021 / Breach of Contract , Earn-Outs , Merger Agreements , Mergers , Motion to Dismiss

Chancery Dismisses Unripe Contribution Claim but Finds That Corporate Director and Officer Adequately Pled Right to...

Wunderlich v. B. Riley Fin., Inc. et al., C.A. No: 2020-0453-PAF (Del. Ch. Mar. 24, 2021) - Delaware corporations may provide indemnification rights to their directors and officers either through the corporation’s...more

4/20/2021 / Breach of Contract , Indemnification , Mergers , Motion to Dismiss

Chancery Confirms that the Implied Covenant Imposes a “Good Faith” Component to an Agreement to Negotiate

DG BF, LLC v. Ray, C.A. No. 2020-0459-MTZ (Del. Ch. Mar. 1, 2021) - The Operating Agreement for an LLC involved in the cannabis industry provided for a five-member board of managers, with one Independent Manager appointed...more

4/15/2021 / Breach of Contract , Breach of Implied Contract , Limited Liability Company (LLC) , Motion to Dismiss , 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

Delaware Choice of Law Provision in Stock Purchase Agreement Does Not Eliminate Claim for Fraud under California Securities Act

Swipe Acquisition Corp. v. Krauss, C.A. No. 2019-0509-PAF (Del. Ch. Jan. 28, 2021) - This decision concerned a motion to dismiss a claim for fraud under the California Securities Act, which the defendants argued was...more

2/15/2021 / Breach of Contract , Choice-of-Law , Fraud , Stock Purchase Agreement

Superior Court Dismisses Tortious Interference with Contract Claim against Corporate Officer

American Bottling Co. v. Repole, C.A. No. N19C-03-048 AML CCLD (Del. Super. Dec. 30, 2020) - This case illustrates that a Delaware court will dismiss a claim against an officer for tortious interference with a contract to...more

1/27/2021 / Breach of Contract , Promissory Estoppel , Sales & Distribution Agreements , Tortious Interference

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

Chancery Finds Company Responsible for Advancing Costs of Defense to Its CEO in a Claim Brought by the Company

International Rail Partners LLC v. American Rail Partners, LLC, C.A. No. 2020-0177-PAF (Del. Ch. Nov. 24, 2020) - The Delaware Limited Liability Company Act (the “LLC Act”) allows a limited liability company (“LLC”) to...more

1/20/2021 / Advancement , Breach of Contract , Delaware Limited Liability Company Act , Limited Liability Company (LLC) , LLC Agreements

Chancery Dismisses Action For Plaintiffs’ Failure to Join Indispensable Parties

Germaninvestments AG and Richard Herrling, individually and on behalf of AHMR GmbH v. Allomet Corporation and Yanchep LLC, C.A. No. 2018-0666-JRS (Del. Ch. Nov. 20, 2020) - Under Court of Chancery Rule 12(b)(7), a...more

1/19/2021 / Breach of Contract , Dismissals , Motion to Dismiss , Shareholders

CCLD Holds Indemnification Provision Does Not Cover First-Party Claims

Ashland LLC v. Samuel J. Heyman 1981 Continuing Trust for Lazarus S. Heyman, C.A. No. N15C-10-176 EMD CCLD (Del. Super. Ct. Nov. 10, 2020) - This case illustrates that Delaware courts will follow the “American Rule” that...more

12/31/2020 / Breach of Contract , Motion for Summary Judgment , Prevailing Party , Stock Purchase Agreement

Enforcing a “Draconian” Bargain, Chancery Grants Motion to Dismiss Claims Arising from Right to Repurchase Interest Upon...

Moscowitz v. Theory Entertainment LLC, C.A. No. 2019-0780-MTZ (Del. Ch. Oct. 28, 2020) - This case illustrates that the Court will enforce parties’ agreements even if they reflect a bad bargain for one party. Plaintiff...more

12/15/2020 / Breach of Contract , Contract Terms , Covenant of Good Faith and Fair Dealing , Implied Covenants , Motion to Dismiss , Repurchases , Termination for Cause

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 Upholds Class Claims Alleging Breaches of Fiduciary Duty in Alleged Controlling Stockholder’s Tender Offer

In re Coty Inc. Stockholder Litigation, C.A. No. 2019-0336-AGB (Del. Ch. Aug. 17, 2020) - JAB Holding Company S.à.r.l. and its affiliates (together “JAB”) completed a partial tender offer (the “Tender Offer”) for shares...more

10/12/2020 / Breach of Contract , Breach of Duty , Controlling Stockholders , Fiduciary Duty

Chancery Holds That Management Does Not Have Unilateral Authority to Preclude a Director From Obtaining the Company’s Privileged...

In Re WeWork Litig., Consol. C.A. No. 2020-0258-AGB (Del. Ch. Aug. 21, 2020) - In October 2019, The We Company’s (the “Company”) board of directors established a special committee (the “Special Committee”) to evaluate a...more

9/28/2020 / Board of Directors , Breach of Contract , Breach of Duty , Controlling Stockholders , Discovery , Fiduciary Duty , Privileged Communication

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

Chancery Rejects Implied Covenant Claim for Failure to Prove that, Had the Issue Been Negotiated, Both Parties Would Have Agreed

Roundpoint Mortgage Servicing Corp. v. Freedom Mortgage Corp., C.A. No. 2020-0161-SG (Del. Ch. July 22, 2020) - To establish an implied contractual obligation pursuant to the implied covenant of good faith and fair...more

8/26/2020 / Acquisitions , Breach of Contract , Covenant of Good Faith and Fair Dealing , Mergers

Chancery Orders Trial to Determine Meaning of Ambiguous Post-Closing Covenants in a Stock Purchase Agreement

Schneider Nat’l Carriers, Inc. v. Kuntz, C.A. No. 2017-0711-PAF (Del. Ch. July 16, 2020) - If parties to a contract offer reasonable but conflicting interpretations of ambiguous contractual language, the Court of Chancery...more

8/21/2020 / Acquisitions , Breach of Contract , Covenant of Good Faith and Fair Dealing , Stock Purchase Agreement

In Post-Trial Opinion, Chancery Finds for Defendant, Rejecting Claims Alleging Breach of Purchase Agreement and Right to “Board...

Braga Investment & Advisory, LLC v. Yenni Income Opportunities Fund I, L.P., C.A. No. 2017-0393-AGB (Del. Ch. June 8, 2020) - In this post-trial opinion, the Court of Chancery held in favor of defendant Yenni Income...more

7/31/2020 / Acquisitions , Breach of Contract , Contract Terms , Purchase Agreement

Chancery Dismisses Action Involving Unusual Issue of Personal Jurisdiction

Sustainability Partners LLC, v. Jacobs, C.A. No. 2019-0742-SG (Del. Ch. June 11, 2020) - In this action involving “an unusual issue of personal jurisdiction,” plaintiff Sustainability Partners LLC (“SP” or the “Company”)...more

7/31/2020 / Breach of Contract , Forum Selection , FRCP 12(b)(2) , Motion to Dismiss , Personal Jurisdiction

CCLD Bars Tort Claims Overlapping with Contract Claims under Economic Loss Doctrine

GEA Sys. N. Am. LLC v. Golden State Foods Corp., C.A. No. N18C-11-242 EMD CCLD (Del. Super. Ct. June 8, 2020) - This case illustrates the extent to which the economic loss doctrine bars tort claims arising out of the same...more

7/29/2020 / Breach of Contract , Breach of Duty , Economic Loss Doctrine , Fraud , Fraudulent Inducement

CCLD Offers Guidance on the Application of Tolling Doctrines to M&A Agreement Clauses Modifying the Statute of Limitations for...

AssuredPartners of Virginia, LLC v. Sheehan, C.A. No. N19C-02-175 AML CCLD (Del. Super. Ct. May 29, 2020) - A disgruntled buyer brought suit against its seller for breaches of representations and warranties four years...more

7/10/2020 / Asset Purchase Agreements , Breach of Contract , Representations and Warranties , Statute of Limitations , Tolling

Chancery Grants Preliminary Injunction, Admonishes Defendant for Engaging in “Self-Help”

Buckeye Partners, L.P. v. GT USA Wilmington, LLC, C.A. No. 2020-0255-JTL (Del. Ch. May 20, 2020) - To obtain a preliminary injunction, a plaintiff must demonstrate (i) a reasonable probability of success on the merits,...more

7/6/2020 / Breach of Contract , Irreparable Harm , Landlords , Preliminary Injunctions

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

Tyler O'Connell

Morris James LLP

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