Delaware Business Litigation Report

Delaware Business Litigation Report

Category Archives: Case Summaries

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Court Of Chancery Declines Mootness Fee

Posted in Class Actions
In re Zalicus Inc. Stockholders Litigation, C.A. 9602-CB (January 16, 2015) The Court of Chancery has again declined to dismiss a class action without notice to the class that the plaintiff’s attorney is to be paid a so-called “mootness fee.”  That is a too-clever attempt to avoid having the court actually look at how much … Continue Reading

Court Of Chancery Explains Pro Se Procedure

Posted in Jurisdiction
Alfred v Walt Disney Co., C.A. 10211-VCG (January 14, 2015) This decision has generated a lot of comment about the plaintiff’s outlandish complaint. However, it is also a good source on Delaware law dealing with how to treat pro se complaints, particularly what leniency they will receive.  Note as well the kindness of the Court … Continue Reading

Court Of Chancery Awards Fees To A “Bad Guy”

Posted in Attorney Fees
Holley v. Nipro Diagnostics Inc., C.A. 9679-VCP (December 23, 2014) It is often thought that if a former director is convicted of wrongdoing there is no need to indemnify her for defense fees. That simplistic view overlooks what may be a reimbursement right the company’s bylaws adopted when all were friendly. But as this decision … Continue Reading

Court Of Chancery Applies Revlon

Posted in M&A
In Re Family Dollar Stockholder Litigation, C.A. 9985-CB (December 19, 2014) On the same day that the Delaware Supreme Court clarified what Revlon requires, the Court of Chancery’s new Chancellor also applied the same standard to deny an injunction under the Revlon principles. This illustrates the respect the Court gives to disinterested Board decisions, even under a … Continue Reading

Supreme Court Clarifies Revlon Requirements

Posted in M&A
C & J Energy Services Inc. v. City of Miami General Employees’ And Sanitation Employees’ Retirement Trust, Nos. 655 /657, 2014 (December 19, 2014) In this important decision, the Delaware Supreme Court clarifies that: (1) Revlon does not require an auction before a company is sold, (2) a reasonable sale process is all that is … Continue Reading

Court Of Chancery Upholds Jurisdiction Over Non-resident Manager

Posted in Jurisdiction
2009 Caiola Family Trust v. PWA LLC, C.A. 8028-VCP (December 18, 2014) This decision is interesting because it upholds the Court of Chancery’s jurisdiction over a non-resident who, through a non-Delaware entity, manages a Delaware LLC.  Thus, simply putting a non-resident entity between you and the Delaware entity will not always shield you from Delaware’s … Continue Reading

Court Of Chancery Upholds Advance Notice Bylaw

Posted in Stockholders' Meetings
AB Value Partners LP v. Kreisler Manufacturing Corporation, C.A. 10434-VCP (December 16, 2014) Advance notice bylaws are valid under Delaware law. However, their application may be enjoined in rare circumstances when the Board of Directors has “radically” changed the playing field after the time to give notice of a competing slate. This decision gives examples … Continue Reading

Court Of Chancery Reiterates Privilege Log Rules

Posted in Discovery
Mechel Bluestone Inc. v. James C. Justice Companies Inc., C.A. 9218-VCL (December 12, 2014) When documents are withheld under a claim they are privileged, it is necessary to say why there is a privilege. A “privilege log” does just that, however, there are specific requirements for what must be on that log, or its cousin … Continue Reading

Court Of Chancery Sanctions

Posted in Discovery
James v. National Financial LLC, C.A. 8931-VCL (December 5, 2014) This decision deserves immediate attention by Delaware lawyers for it sets out their responsibilities to see that discovery, particularly discovery of ESI, is done correctly. It also is a good listing of the level of sanction that may be applied for not fulfilling those responsibilities… Continue Reading

Court Of Chancery Invalidates Indemnification Requirement In A Merger

Posted in M&A
Cigna Health And Life Insurance Company v. Audax Health Solutions Inc., C.A. 9405-VCP (November 26, 2014) Escrow provisions are common in merger deals, particularly those involving private equity. Here, however, the parties went a different route and tried to require the selling stockholders to agree to indemnify the buyer for various possible events. The Court … Continue Reading

Court Of Chancery Invalidates Deal Protections

Posted in M&A
In re Comverge Inc. Shareholder Litigation, C.A. 7368-VCP (November 25, 2014) Numerous Delaware decisions have upheld deal protection provisions in merger agreements. But, as this decision shows, it is still possible to go too far. When a combination of a termination fee, an expense reimbursement provision, and a convertible note amount to a 13% fee … Continue Reading