Delaware Business Litigation Report

Delaware Business Litigation Report

Category Archives: Case Summaries

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Court Of Chancery Explains Inspection Rights For Subsidiary Wrongdoing

Posted in Books and Records
Oklahoma Firefighters Pension & Retirement System v. Citigroup Inc., C.A. 9587-ML (September 30, 2014) This decision explains when wrongful conduct at a subsidiary is sufficient to warrant inspection of the parent’s records to determine if the parent has violated any Caremark duties.  At least when there is some basis to infer that the parent had oversight … Continue Reading

Court Of Chancery Explains Pleading Standard For Claims Against Disinterested Directors

Posted in Case Summaries, Directors
In Re Cornerstone Therapeutics Inc. Stockholder Litigation, C.A. 8922-VCG (September 10, 2014)  This is a great decision to read to understand the pleading standard that applies to a complaint that alleges a controlling stockholder transaction. Even in such a transaction, the disinterested directors are not liable absent proof of a breach of a non-exculpated breach … Continue Reading

Court Of Chancery Explains How To Form An Oral Partnership

Posted in Business Torts
Grunstein v. Silva, C.A. 3932-VCN (September 5, 2014) When parties enter into a business realtionship but fail to document their agreement, a mess is sure to follow. This detailed opinion explains what evidence is needed to prove an oral partnership agreement or to prevail on the related liability theories of unjust enrichment, equitable estoppel and … Continue Reading

Court Of Chancery Explains How To Be An Unintended Fiduciary

Posted in Fiduciary Duty
Bennett v. Lally, C.A. 9545-VCN (September 5, 2014) Your duties to another person may change significantly if you become a fiduciary to him. That fiduciary relationship may be formed inadvertently as this decision explains.  Thus, giving advice to another,  intending to act [as in this case] as a third-party contractor may get you involved in a … Continue Reading

Court Of Chancery Explains When Control Makes Dilution Claim Direct

Posted in Fiduciary Duty
In Re Nine Systems Corporation Shareholders Litigation, C.A. 3940-VCN (September 4, 2014) Whether a plaintiff’s claim is direct or derivative is often a critical issue. It has now been established that when a controlling stockholder issues equity to himself at an unfair price, the resultant dilution claim is a direct one. This decision explains how … Continue Reading

Chancery Court Rejects Trading Restriction as Condition of Receipt

Posted in Case Summaries
Authored By Thomas Hanson This article was originally published in the Delaware Business Court Insider | July 2, 2014 Under 8 Del. C. Section 220, stockholders of Delaware companies are entitled to inspect certain books and records of the company upon stating a proper purpose. A long-recognized proper purpose for a books-and-records demand is an interest in valuing … Continue Reading

Court Of Chancery Interprets Preferred Stock Rights

Posted in Corporate Charters
Brevan Howard Credit Catalyst Master Fund Limited v. Spanish Broadcasting System Inc., C.A. No. 9209-VCG (June 27, 2014) This is another in line of cases dealing with the statutory limit of using only “legally available funds” to redeem preferred stock.  Recognizing this limit, preferred stock provisions are evolving by adding additional requirement that make the … Continue Reading