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Applying Rare Intermediate Review of Forum Non Conveniens, the Delaware Superior Court Stays a Delaware Action to Permit Filing of...

GXP Capital, LLC v. Argonaut Mfg. Servs., Inc., C.A. No. N18C-07-267 PRW CCLD (Del. Super. May 4, 2020) - When evaluating a forum non conveniens challenge, Delaware has a seldom used, intermediate framework of review....more

Chancery Dismisses Fraud, Misrepresentation and Mistake Claims Based on Anti-Reliance Provisions

Midcap Funding X Trust v. Graebel Companies, Inc., C.A. No. 2018-0312-MTZ (Del. Ch. Apr. 30, 2020) - The Court of Chancery found on a motion to dismiss that the plaintiffs’ allegations regarding misrepresentations in...more

Chancery Finds Corporation Fraudulently Induced Investor into Contract, Acting “Through Concealment and Silence”

Maverick Therapeutics Inc. v. Harpoon Therapeutics, Inc., C.A. No. 2019-0002-SG (Del. Ch. Apr. 3, 2020). In this post-trial opinion, the Court of Chancery found that Harpoon Therapeutics, Inc., (“Harpoon”), a Delaware...more

5/26/2020  /  Breach of Contract , Fraud , Investors

LLC May Not Reverse Decision to Enter into Contractual Call Option Buyout Process with Members

Walsh v. White House Post Productions, LLC, C.A. No. 2019-0419-KSJM (Del. Ch. Mar. 25, 2020). Parties to LLC agreements often provide for buyout provisions upon specified events, such as when a member ceases to be an...more

Superior Court Dismisses Fraud Claim Improperly Boot-Strapped To Breach Of Contract Claim

Cont’l Fin. Co., LLC, v. ICS Corp., C.A. No. N19C-07-184 AML (Del. Super. Feb. 20, 2020). This case represents another example of the application of the “bootstrap doctrine” to define the limits of a contract party’s...more

Claims Alleging that Icahn-Entities Schemed to Buy Out Minority Unitholders on the Cheap Survive Motion to Dismiss

In re CVR Refining, LP Unitholder Litig., Consol. C.A. No. 2019-0062-KSJM (Del. Ch. Jan. 31, 2020). The Court of Chancery declined at the pleadings stage to dismiss claims for breach of a governing limited partnership...more

Chancery Finds Liquidated Damages Clause for Breach of Non-Compete Unenforceable

Lyons Ins. Agency, Inc. v. Wark, C.A. No. 2017-0348-SG (Del. Ch. Jan. 28, 2020). In this decision on cross-motions for summary judgment, the Delaware Court of Chancery held that a liquidated damages clause for a breach of...more

Chancery Construes Sellers’ APA Contractual Representations Concerning Customer Relationships and Changes in the Business, Finds...

Julius v. Accurus Aerospace Corp., C.A. No. 2017-0632-MTZ (Del. Ch. Oct. 31, 2019). This case serves as a cautionary tale when sellers’ representations in a purchase agreement fail to fully protect against the business...more

Superior Court CCLD Addresses Pleading Standards for Trade Secret, Fraud and Implied Covenant Claims

Brightstar Corp. v. PCS Wireless, LLC, C.A. No. N18C-10-250 PRW CCLD (Del. Super. Ct. Aug. 7, 2019). Brightstar and PCS, two competitors that distribute new and pre-owned mobile devices, entered into a buy/sell agreement...more

Formulaic Recitations of Equitable Jurisdiction Are Not Enough for Court of Chancery Jurisdiction

Athene Life and Annuity Co. v. Am. Gen. Life Ins. Co., C.A. No. 2018-0244-SG (Del. Ch. July 31, 2019). The Court of Chancery is a court of limited jurisdiction. It maintains subject matter jurisdiction only for (i)...more

Chancery Denies Motion to Dismiss Claim for Breach of Earn-Out When Unable to “Divine any Meaning” From Provision

Western Standard, LLC v. SourceHOV Holdings, Inc., C.A. No. 2018-0280-JRS (Del. Ch. July 24, 2019). Defendant Pangea acquired BancTec through a merger agreement that provided for an earn-out to former BancTec stockholders...more

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

Court of Chancery Addresses Stockholder Standing to Enforce Corporate Contracts, Declines to Dismiss Claim for Breach of...

Ark. Teacher Ret. Sys. v. Alon USA Energy, Inc., C.A. No. 2017-0453-KSJM (Del. Ch. Jun. 28, 2019). Section 203 of the Delaware General Corporation Law, an anti-takeover statute, prohibits a target from entering into a...more

Delaware Supreme Court Reminds Counsel of Obligation to Prevent Clients’ Abusive Deposition Misconduct

In re: Shorenstein Hays-Nederlander Theatres LLC Appeals, Consol. C.A. Nos. 596, 2018 and 620, 2018 (Del. Jun. 20, 2019). “Depositions are court proceedings, and counsel defending the deposition have an obligation to...more

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

High Court Holds that Conflicting Contract Provisions Governing Agreement’s “Term” Create Ambiguity and Require Denial of Summary...

Sunline Commercial Carriers, Inc. v. CITGO Petroleum Corp., No. 185,2018 (Del. Mar. 7, 2019). The parties disputed the termination date of two related agreements through which CITGO agreed to ship oil using the plaintiff...more

Chancery Addresses Earn-Out Dispute Involving Alleged Breaches of Fiduciary Duty and the Implied Covenant

Glidepath Ltd. v. Beumer Corp., C.A. No. 12220-VCL (Del. Ch. Feb. 21, 2019). Contingent payments based on an acquired business’s future performance are a frequent feature in M&A transactions. In this case, after selling...more

Chancery Declines to Dismiss Claim that Acquirer Failed to Use “Commercially Reasonable Efforts” to Reach Earn-out Milestones

Himawan v. Cephalon, Inc., C.A. No. 2018-075-SG (Del. Ch. Dec. 28, 2018). Parties in M&A transactions commonly include efforts clauses, like the obligation to use best efforts, commercially reasonable efforts, etc., to...more

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