News & Analysis as of

Controlling Stockholders Dilution

Fenwick & West LLP

Delaware Supreme Court Holds That Dilution Claims Against a Controller Are Solely Derivative, Overruling Prior Precedent

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On September 20, 2021, the Delaware Supreme Court took the highly unusual step of overruling its prior decision in Gentile v. Rossette. An oft-criticized precedent from 2006, Gentile created an exception allowing minority...more

Gray Reed

Compelling Justification Required when Interfering with Stockholder Voting Rights

Gray Reed on

The Coster v. UIP Companies, Inc. decision provides a framework for evaluating stockholder disenfranchisement claims.  Directors should carefully consider how, and under what conditions, they will take actions that dilute...more

A&O Shearman

Delaware Court Of Chancery Validates Ratification Of Defective Corporate Acts Impacting Merger And Declines To Expand Universe Of...

A&O Shearman on

On August 17, 2018, Chancellor Andre G. Bouchard of the Delaware Court of Chancery denied all of plaintiffs’ claims challenging a series of transactions culminating in the acquisition of defendant Design Within Reach, Inc....more

Morris James LLP

Court Of Chancery Explains When A Minority Stockholder May Have Actual Control Over A Deal

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This is another in a series of decisions dealing with the allegation that a minority stockholder controlled a deal through its control of a majority of the board of directors....more

Morris James LLP

Court Of Chancery Explains When A Dilution Claim Is Direct

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It is often said that when a majority stockholder issues more stock to himself at an unfair price that is a direct claim and not derivative. But as this decision points out, that is a little too simplistic....more

Morris James LLP

Chancery Enjoins Board in Potential Stockholder Dilution Scheme

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Directors and officers of struggling corporations seeking capital or startups willing to trade equity for cash should read the Delaware Court of Chancery's recent transcript ruling in Elite Horse Investments Ltd. v. T3...more

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