Litigation developments: core M&A and corporate governance doctrines
Compliance Perspectives: Due Diligence and Ultimate Beneficial Ownership (UBO)
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
On July 2, 2024, the Delaware Chancery Court in Sciannella v. AstraZeneca dismissed stockholder claims in connection with the $3 billion merger of Viela Bio and Horizon Therapeutics in 2021. The merger was approved by Viela’s...more
In Palkon v. Maffei, the Delaware Court of Chancery permitted stockholders to pursue claims that the board of directors of TripAdvisor breached their fiduciary duties in converting TripAdvisor from a Delaware corporation to a...more
In re Sears Hometown and Outlet Stores, Inc. S’holder Litig., C.A. No. 2019-0798-JTL (Del. Ch. Jan. 24, 2024) - Here, a special committee of the board supported a plan to liquidate the company’s floundering business...more
In late February, the Chancery Court denied a motion to dismiss a stockholder lawsuit against the controlling stockholder and board of directors of TripAdvisor, Inc., seeking to enjoin a reincorporation of TripAdvisor into...more
“Was the richest person in the world overpaid?” That’s how the Delaware Court of Chancery (the Court) began the 200-page opinion in Tornetta v. Musk to rescind Elon Musk’s entire $55.8 billion 10-year equity compensation...more
The Background: After unsuccessfully trying to convince the special committee not to implement a plan to liquidate a business line, which the controlling stockholder believed would destroy value, the controlling stockholder...more
The Delaware Court of Chancery, in Palkon v. Maffei, et al., C.A. No. 2023-0449-JTL (Del. Ch. Feb. 20, 2024), determined that a reduction in the liability exposure of a fiduciary due to the conversion of a Delaware...more
The Delaware Court of Chancery issued a post-trial opinion, on January 30, 2024, in Tornetta v. Musk, holding that Tesla’s board of directors (the “Board”) breached its fiduciary duties in awarding CEO Elon Musk (with the...more
The Delaware Court of Chancery invalidated a $55.8-billion payout by Tesla, Inc., to its founder and controlling stockholder, Elon Musk. In a 200-page post-trial decision, Chancellor McCormick stated Musk was required to...more
In a landmark decision, In re Sears Hometown & Outlet Stores, Inc. Stockholder Litigation,1 the Delaware Court of Chancery held that a controlling stockholder did not breach his fiduciary duties when he amended company bylaws...more
On January 30, 2024, the Chancellor of the Delaware Court of Chancery struck down the $55.8 billion compensation plan that Tesla, Inc.’s board of directors had granted to Tesla’s well-known CEO, Elon Musk, finding that the...more
In a landmark decision, the Delaware Court of Chancery addressed, for the first time, the precise duties that a controlling stockholder owes, and the standard of review that will apply, when a controlling stockholder takes...more
On May 1, 2023, Vice Chancellor Morgan T. Zurn of the Delaware Court of Chancery denied a motion to dismiss a putative stockholder class action asserting a breach of fiduciary duty claim against the directors of a...more
On March 15, 2022, Chancellor Kathaleen McCormick of the Delaware Court of Chancery ruled that the founder and former CEO of Mindbody Inc. (the “Company”) breached his fiduciary duties to stockholders in connection with the...more
On January 4, 2023, and again on March 1, 2023, Vice Chancellor Lori Will of the Delaware Court of Chancery denied motions to dismiss claims against directors and controlling shareholders of GigCapital-affiliated special...more
On January 25, 2023, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery denied a motion to dismiss a derivative suit brought by stockholders asserting breach of fiduciary duty claims against a former officer...more
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
The Delaware Court of Chancery recently weighed key issues under state law involving claims of breach of fiduciary duty in several challenged corporate transactions. Perfection Is Not Expected: Court Finds Flawed...more
When a court reviews contested business transactions of a Delaware corporation, they typically rely on one of two standards of review: the “business judgment rule” or the “entire fairness standard.” The business judgment rule...more
On September 6, 2022, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery granted a motion to dismiss derivative claims for breach of fiduciary duty brought by stockholders of a software company (the...more
MultiPlan: Chancery court assesses fiduciary duties in the context of de-SPAC transactions - The Delaware Court of Chancery declined to dismiss, at the pleading stage, breach of fiduciary duty claims made against a SPAC's...more
In re Straight Path Communications Inc. Consol. Stockholder Litig., C.A. No. 2017-0486-SG (Del. Ch. Feb. 17, 2022) - This summary judgment decision arose out of a transaction involving the company Straight Path....more
Harcum v. Lovoi, C.A. No. 2020-0398-PAF (Del. Ch. Jan. 3, 2022) - In Harcum, the Delaware Court of Chancery dismissed all claims brought in a stockholder suit alleging fiduciary breaches in connection with the $1 billion...more
On February 14, 2022, Vice Chancellor Lori W. Will of the Delaware Court of Chancery entered judgment in favor of Lee Enterprises, Inc. (the “Company”) and its directors following an expedited trial on claims for breach of...more