Delaware Business Litigation Report

Delaware Business Litigation Report

Category Archives: Case Summaries

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Supreme Court Applies McWane To Arbitration

Posted in Arbitration
LG Electronics Inc. v. Interdigital Communications Inc., No. 465, 2014 (April 14, 2015) 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… Continue Reading

Court Of Chancery Explains Effect Of Spin-Off

Posted in M&A
Miramar Police Officers’ Retirement Plan v. Murdoch, C.A. No. 9860-CB (April 7, 2015) 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… Continue Reading

Superior Court Upholds Multimillion Dollar Verdict

Posted in Business Torts
Professional Investigating & Consulting Agency, Inc. v. Hewlett-Packard Company Del Super. No. 12C-06-196 MMJ CCLD (March 23, 2015) This decision upholds a rare multimillion dollar jury verdict for interference with the plaintiff’s business, including a $5,500,000 damage award for “humiliation” damages.  The Court also awards attorney fees to the successful plaintiff. The opinion is an… Continue Reading

Court Of Chancery Interprets Forum Selection Clause

Posted in Jurisdiction
Wilmington Savings Fund Society, FSB v. Caesars Entertainment Corporation, C.A. 10004-VCG (March 18, 2015) This is an interesting decision because it holds that a forum selection clause must be “clear and unambiguous” before it will be held to provide an exclusive forum for all disputes. Clauses that just refer to specific types of disputes, such… Continue Reading

Delaware Supreme Court Leaves Open The Question Of Whether Breach Of Contract Is A Business Judgment

Posted in Breach of Contract
Friedman v. Khosrowshahi, No. 442,2014 (March 6, 2015) In this interesting order affirming a Chancery decision, the Supreme Court went out of its way to make a point.  A stockholder suit alleging that the board breached a stock option plan may state a claim for breach of contract that does not necessarily involve a business… Continue Reading

Court of Chancery Addresses Application of Fee-Shifting Bylaw

Posted in Bylaws, Case Summaries, Class Actions, Controlling Stockholder, Corporate Charters
The Rites of Spring are upon us: budding flowers, warmer temperatures, and a Delaware court issuing an important decision just before the annual Tulane Corporate Law Institute begins. This year the honor of issuing that decision fell to Chancellor Bouchard who issued his opinion in Strougo v. Hollander, C.A. No. 9770-CB (Del. Ch.) on March… Continue Reading

New Arbitration Act Prepared

Posted in Arbitration
The Delaware State Bar Association has prepared a new “Delaware Rapid Arbitration Act.”  A copy with commentary is available here. The DRAA is designed to address the current problems with costs and delays that infect many arbitrations. It sets strict  limits on how long the arbitration should take and penalizes arbitrators who fail to act… Continue Reading

Delaware Prepares To Eliminate Fee-Shifting Bylaws And Charters

Posted in Attorney Fees
The Delaware State Bar Association is submitting new legislation that will prohibit the use of fee-shifting bylaws or corporate charters for litigation involving “intracorporate” disputes.  A copy of the proposed bill with commentary is available here.  The result would be to limit the Delaware Supreme Court’s decision in ATP Tour Inc. v. Deutscher Tennis Bund,… Continue Reading

Master Denies Limits On Trading Following Inspection

Posted in Books and Records
Southpaw Credit Opportunity Master Fund LP v. Advanced Battery Technologies Inc,. C.A. 9542-ML (February 26, 2015) A Master holds that the Court should not impose trading restrictions after a books and records inspection but should impose a confidentiality provision. Also interesting, the Master rejected the claim that China law prohibited inspection of a Delaware corporation’s… Continue Reading

Court Of Chancery Limits Drag-Along Rights

Posted in Appraisal
Halpin v. Riverstone National Inc., C.A. 9796-VCG (February 26, 2015) Whether drag-along rights can preclude an appraisal action for common stock has not been decided in Delaware.  Here, because the merger was completed before the drag-along rights were asserted, the Court did not have to decide that issue and instead just held the right was… Continue Reading

Court Of Chancery Upholds Privilege For Funding Agreement

Posted in Discovery
Carlyle Investment Management Company L.L.C. v. Moonmouth Company S.A., C.A. No. 7841-VCP (February 24, 2015) Applying the Delaware “because of” test to determine what is covered by the work product privilege, this decision prohibits discovery of the funding agreement between a litigation funding firm and one of the parties to the litigation. This is the… Continue Reading

Court Of Chancery Explains Conspiracy Theory Of Jurisdiction

Posted in Jurisdiction
Virtus Capital L.P. v. Eastman Chemical Company, C.A. 9808-VCL (February 11, 2015) This is a very useful decision because of its detailed explanation of the conspiracy theory of jurisdiction, which was first adopted in the famous Istituto Bancario case. As the decision makes clear, breaches of fiduciary duty claims are particularly suited for that theory and… Continue Reading

Court Of Chancery Upholds Arbitration Clause In Breach Of Fiduciary Duty Case

Posted in Arbitration
Lewis v. AimCo Properties L.P., C.A. 9934-VCP (February 10, 2015) This decision enforces an arbitration clause in an LLC agreement even when the claim asserted a breach of fiduciary duty. While not surprising in itself, the decision may also have broader implications about whether a bylaw with an arbitration provision may be enforced in a… Continue Reading