News & Analysis as of

Breach of Duty Board of Directors Mergers

Hogan Lovells

Solak v. Mountain Crest Capital: fiduciary duties claims abound for SPAC sponsors and directors

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In Solak v. Mountain Crest Capital, the Delaware Court of Chancery found that a stockholder plaintiff pleaded a viable breach of fiduciary duty claim based on an alleged failure of the board of directors of a SPAC to disclose...more

Morris James LLP

Chancery Finds Merger Validly Amended LLC Agreement and Effectively Removed the LLC’s Manager

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Campus Eye Management Holdings LLC v. DiDonato, C.A. No. 2024-0121-LWW (Del. Ch. Aug. 30, 2024) - This case arose out of a dispute between an optometrist who sold a majority stake in his company to a private equity buyer,...more

Skadden, Arps, Slate, Meagher & Flom LLP

Insights: The Delaware Edition - December 2024

In this issue, we explore ongoing corporate law issues involving controlling stockholders, with significant decisions anticipated from the Delaware Supreme Court in 2025; the rise in litigation over earnout provisions in...more

Kramer Levin Naftalis & Frankel LLP

Delaware Supreme Court Affirms Breach of Fiduciary Duty Judgment Against CEO but Reverses Bidder’s Aiding and Abetting Liability

In a recent decision by the Delaware Supreme Court sitting en banc in In re Mindbody, Inc., Stockholder Litigation, the court affirmed the Court of Chancery’s determination that Mindbody’s CEO had breached his duties of...more

Hogan Lovells

Q2 2024 Quarterly Corporate / M&A decisions updates

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Below is our Corporate / M&A decisions update covering decisions in the second quarter of 2024. Decisions from the Delaware Court of Chancery this quarter included further development of the jurisprudence around the validity...more

Morris James LLP

Delaware Supreme Court Reverses MFW Dismissal Due to Inadequate Disclosures Regarding Special Committee’s Advisors’ Material...

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City of Sarasota Firefighters’ Pension Fund v. Inovalon Holdings Inc., No. 305, 2023 (Del. May 1, 2024). The Delaware Supreme Court’s decision in Khan v. M & F Worldwide Corp. (“MFW”) established a cleansing process for a...more

Morris James LLP

Chancery Addresses Acquirer’s Request For Joint Tortfeasor Settlement Credit

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In re Columbia Pipeline Grp. Inc. Merger Litig., Consol. C.A. No. 2018-0484-JTL (Del. Ch. May 15, 2024) - In this post-trial decision, the Court addressed an acquirer’s responsibility for damages suffered by a stockholder...more

Morris James LLP

Chancery Grants Motion to Dismiss Breach of Fiduciary Duty Claims Against Officers in Controlling Stockholder Transaction Subject...

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Kormos v. Playtika Hldg. UK II Ltd., C.A. 2023-0396-SG (Del. Ch. May 3, 2024) - In this decision involving breach of fiduciary duty claims against two officers, the Court granted the individual defendants’ motions to...more

Morris James LLP

Court of Chancery Dismisses Aiding And Abetting Fraud Claim Against Corporate Officers And Directors On Grounds That A Corporation...

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Urvan v. AMMO, Inc., Consol. C.A. No. 2023-0470 PRW (Del. Ch. Feb. 27, 2024, corrected Mar. 14, 2024) - It is an axiom of Delaware law that a corporation acts through its human agents. This principle informs the causes of...more

Hogan Lovells

2024 Securities, Shareholder, and M&A Litigation Outlook

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2023 was a busy year, with both the Delaware courts and others, including the U.S. Supreme Court, weighing in on shareholder and M&A litigation issues. The Delaware Court of Chancery issued several notable decisions on issues...more

Morris James LLP

Chancery Evaluates Supplemental Disclosures to Determine the Corporate Benefit and Awards Plaintiffs a Proportional Fee

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Allen v. Harvey, C.A. No. 2022-0248-MTZ (Del. Ch. Oct. 30, 2023) - Delaware cases provide guidance on the standard for evaluating the “corporate benefit” from supplemental disclosures in advance of a stockholder vote – and...more

Morris James LLP

Chancery Awards Mootness Fee Applying Recently Adopted Standard

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Assad v. Botha, et al., C.A. No. 2022-0691-LWW (Del. Ch. Oct. 30, 2023) - Here, Vice Chancellor Will awarded a $100,000 mootness fee for “material—and unremarkable—disclosures” following the recently heightened mootness...more

Morris James LLP

2023 Delaware Corporate and Commercial Case Law Year in Review

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This top ten list summarizes significant decisions of the Delaware Supreme Court and the Delaware Court of Chancery over the past calendar year. Our criteria for selection are that the decision either meaningfully changed...more

Morris James LLP

Chancery Declines to Defer to the Deal Price in Appraisal Proceeding Involving a Controller Squeeze-Out Subject to MFW Protections

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HBK Master Fund L.P. v. Pivotal Software Inc., C.A. No. 2020-0165-KSJM (Del. Ch. Aug. 14, 2023) - The Delaware Court of Chancery engages in an independent valuation process when determining the fair value of petitioners'...more

Morris James LLP

Chancery Upholds Claims Against LLC Officers and Others Arising from Squeeze-Out of Minority Unitholders

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Cygnus Opportunity Fund, LLC v. Washington Prime Group, LLC, C.A. No. 2022-0718-JTL (Del. Ch. Aug. 9, 2023) - An Indiana corporation reorganized via bankruptcy into a Delaware LLC, and a senior note holder negotiated for...more

Sheppard Mullin Richter & Hampton LLP

The Delaware Court of Chancery Confirms that Duty of Oversight Claims Against Corporate Officers Are Subject to the Same High...

In Segway Inc. v. Hong Cai, 2023 Del. Ch. LEXIS 643 (Del. Ch. Dec. 14, 2023), the Delaware Court of Chancery (Will, V.C.) dismissed a claim for breach of fiduciary duty brought by Segway Inc. (the “Company”) against its...more

Morris James LLP

Covenant Not to Sue for Loyalty Breaches in an Agreement Among Stockholders May Operate Within the Space for Fiduciary Tailoring

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The fiduciary duty of loyalty may be modified or eliminated in the LLC context, where freedom of contract is paramount. For corporations governed by the Delaware General Corporation Law (DGCL), however, many Delaware...more

Cooley LLP

Keeping Up With M&A Case Law – Spotlight on Recent Delaware Decisions

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The mergers & acquisitions market may wax and wane, but one thing in M&A is consistent from year to year: The Delaware courts issue opinions that impact M&A dealmaking. And this year is certainly no exception – Delaware...more

Sheppard Mullin Richter & Hampton LLP

Delaware Court of Chancery Clarifies Heightened Standard for Recovery of Attorneys’ Fees in Disclosure-Based Deal Litigation

In Anderson v. Magellan Health, Inc., No. 2021-0202, — A.3d —-, 2023 WL 4364524 (Del. Ch. July 6, 2023) (McCormick, C.), the Delaware Court of Chancery addressed the circumstances under which the Court will award a...more

Skadden, Arps, Slate, Meagher & Flom LLP

Insights: The Delaware Edition - June 2023

In a case of first impression, the Court of Chancery held recently that officers, like directors, owe their companies a duty of oversight, although the scope of that will vary with their responsibilities. Two other Chancery...more

Hogan Lovells

Q1 2023 Quarterly Corporate / M&A decisions updates

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M&A and shareholder litigation is off to a busy start in 2023, with Delaware courts issuing several interesting opinions. The Delaware Supreme Court reversed a Delaware Court of Chancery decision, finding that the “maximum...more

Hogan Lovells

In re Mindbody Inc., Stockholder Litigation: Court finds unfair sale process

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In re Mindbody Inc., Stockholder Litigation, C.A. No. 2019-0442-KSJM (Del. Ch. Mar. 15, 2023), the Delaware Court of Chancery held that a CEO breached his fiduciary duties by taking steps the court found tilted a merger sale...more

McGuireWoods LLP

Revlon Liability Resurrected: Undisclosed Conflicts Lead to Sizable Damages

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In a rare finding of Revlon liability, the Delaware Court of Chancery recently sided with the plaintiffs and awarded damages post-trial in In re Mindbody, Inc., Stockholder Litigation, C.A. No. 2019-0442-KSJM....more

Faegre Drinker Biddle & Reath LLP

Delaware Chancery MFW Framework Does Not Require Best Deal

As Kahn v. M&F Worldwide Corp. (MFW) establishes, the Business Judgment Rule must be applied to a transaction involving a controlling shareholder, if the deal is conditioned upon the approval of: (1) an independent special...more

A&O Shearman

Delaware Court Of Chancery Dismisses Breach Of Fiduciary Duty Claims Against Special Committee Defendants For Failure To Plead...

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On November 30, 2022, Vice Chancellor Glasscock of the Delaware Court of Chancery granted a motion to dismiss claims asserted against directors who served as members of the special committee (the “Special Committee”) of...more

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