Delaware Business Litigation Report

Delaware Business Litigation Report

Monthly Archives: October 2010

Court of Chancery Interprets Conflict of Interest Provision of LLC Agreement

Posted in LLC Agreements, M&A
In re Atlas Energy Resources, LLC Unitholder Litigation, C.A. No. 4589-VCN (October 28, 2010) This case is another example of the care practitioners must take in drafting LLC agreements. In this decision, Vice Chancellor Noble applied the Kahn v. Lynch entire fairness standard of review to a merger between a publicly traded LLC and its… Continue Reading

Court Of Chancery Clarifies Termination Fee Calculation

Posted in M&A
In re Cogent Inc. Shareholder Litigation, C.A. 5780-VCP (October 5, 2010) A termination fee must be reasonable.  That is well known.  But how to calculate the fee to test its reasonableness is sometimes misunderstood.  This decision explains how to do so. The preferred approach is to calculate the fee based on the equity value of… Continue Reading

Supreme Court Clarifies Unocal/Moran Relationship

Posted in M&A
Versata Enterprises Inc v. Selectica Inc. , C.A. 193, 2010 (October 4, 2010) This is the most important clarification of Delaware law under the Unocal and Moran decisions in several years and is worth a close study.  The Supreme Court upheld the Court of Chancery decision that a 5% poison pill was valid under the… Continue Reading

Court Of Chancery Orders LLC Dissolved

Posted in LLC Agreements
Vila v. BVWEBTIES LLC , C.A. 4308-VCS (October 1, 2010) This decision is a variation on the issue of when should a LLC be dissolved when the managers/ members are deadlocked.  Merely because 1 of the managers is able to keep the business functioning at some level is not sufficient to avoid dissolution when its… Continue Reading