Delaware has enacted the Delaware Rapid Arbitration Act, which is intended to address the increasing costs and delays associated with traditional arbitration of business disputes. It does so by: (1) requiring arbitration generally to be completed within 120 days of the arbitrator’s acceptance of appointment (with only one extension of no more than 60 days); (2) penalizing arbitrators who fail to meet that deadline by reducing their fees substantially; (3) limiting pre-arbitration objections to the scope of the arbitration; and (4) limiting appeals of an award. While the parties to an agreement to arbitrate retain the freedom to choose much of how the arbitration is conducted, if they fail to do so, the DRAA provides the rules that apply by default. The following are the key aspects of the DRAA. Continue Reading
On this episode of CorpCast, we’re honored to welcome Vice Chancellor J. Travis Laster of Delaware’s Court of Chancery. In addition to discussing the reasons he came to Delaware to practice law, the Vice Chancellor shares his views from the bench, including some very helpful practice points and advice for younger attorneys. Many thanks to the Vice Chancellor for joining us as our inaugural guest! Continue Reading
For the first time, the Delaware Supreme Court held that an arbitration proceeding qualifies as a having been first filed, warranting dismissal of a later filed suit under the McWane doctrine on forum selection. The facts here are somewhat unusual, but the decision has broad implications, particularly when the actual dispute was over the interpretation of a contract that did not have an arbitration clause.
It is too often thought that just by alleging some wrongdoing a demand for inspection of records is sufficient. Well, this decision explains why that is wrong. The demand must state a credible basis to believe that as a result of the inspection nonexculpated conduct will be uncovered and suit filed. That is hard to do when there is a 102(b)(7) provision in the certificate of incorporation and no real breach of loyalty claim.
A non-exclusive forum selection clause in the parties’ agreement means that a McWane motion asserting an improper forum is doomed to fail.
Whether you can’t attend the 2015 ABA Business Law Section Spring Meeting in San Francisco or you are attending and still trying to figure out your schedule, we’re giving you a preview of the topics being covered by host Pete Ladig and others on Saturday, April 18, at 10:30 AM in their CLE panel titled 50 Ways to Leave Your Lover, err .. Business Partner: The Essentials of Business Divorce in Privately Held Entities. We’ll review the various aspects of Business Divorce, and hopefully entice you to attend to hear Kurt Heyman, Melissa Donimirski, Eric Milby, Michaela Battista Sozio and Vice Chancellor Donald F. Parsons, Jr. of the Delaware Court of Chancery discuss the issues in more detail. Follow @DECorpCast for conference updates, or contact us at CorpCast@morrisjames.com with questions or comments. We would love to hear from you! Continue Reading
Delaware law implies a covenant of good faith and fair dealing into every contract. The Delaware Supreme Court’s recent opinion in Nationwide Emerging Managers LLC v. NorthPointe Holdings LLC, No. 441, 2014 (Del. Supr., Mar. 18, 2015), makes clear, however, that the contours of the clause are quite narrow, particularly with respect to a negotiated written agreement between sophisticated parties. It may not be used by a party to obtain in court what it could not obtain at the bargaining table. Continue Reading
This is an interesting decision because it deals with what is the effect of a spin-off of corporate assets on existing contracts that apply to the parties’ “transferees, successors and assigns.” When a different line of business is spun-off, absent clear contrary language, the spun-off entity does not assume the obligations of its former parent under such contracts.
On Feb. 11, The Wall Street Journal reported that General Motors (GM) was evaluating a potential nominee to its board from four hedge funds, collectively holding more than 34 million of GM’s shares. According to the report, the potential nominee’s agreement with the funds included compensation in the form of a percentage of the funds’ profits from their investment in GM. The potential nominee was seeking to join GM’s board to urge GM to return more cash to its shareholders and boost its stock price. One of the funds backing the potential nominee stated that GM had too much cash on its balance sheet, and needed to return more of its capital to shareholders through dividends and share buybacks. Continue Reading
Morris James LLP has formed a Data Privacy and Information Governance Group.
The Data Privacy and Information Governance Group is an interdisciplinary team of corporate and fiduciary duty attorneys, attorneys well-versed in electronic data storage and discovery, attorneys with bankruptcy and insurance-related backgrounds, and non-attorney IT staff knowledgeable about trends in data security and technology. Together, the group advises boards of directors and officers in assessing and managing risk and defending claims for alleged breach of fiduciary duty arising from data breaches. Continue Reading