By Morris James LLP on January 22, 2015
Sinchareonkul v. Fahnemann, C.A. 10543-VCL (January 22, 2015)
This is a helpful reminder that the DGCL governs what may be in the certificate of incorporation and what may be in the bylaws. Giving one director extra tie-breaking voting rights must be in the certificate to be valid.
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By Morris James LLP on January 21, 2015
Authored By Brett M. McCartney
This article was originally published in the
Delaware Business Court Insider | January 21, 2014
Books-and-records litigation does not typically grab headlines. In fact, few cases litigated under Section 220 of the Delaware General Corporation Law result in written opinions authored by the Delaware Supreme Court. Nevertheless, books-and-records litigation is vibrant in Delaware. Books-and-records requests are the "tools at hand" Delaware courts encourage stockholders to use prior to filing derivative litigation. However, a stockholder's right to a Delaware company's books and records is not unfettered. Aside from needing to satisfy the preconditions set forth in Section 220, the Delaware Supreme Court recently apprised the Court of Chancery that it is within the Chancery Court's authority to restrict the use of certain books and records where equitable.
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By Morris James LLP on January 20, 2015
Tuesday, January 27, 2015 12:00 - 1:00 PM
David J. Soldo will moderate a CLE seminar on Ethics in Litigation sponsored by the Litigation Section and the Small Firms and Solo Practitioners Section of the Delaware State Bar Association. This seminar will cover recent trends in disciplinary matters and will offer tips on how to avoid ethical complaints. Topics include when to retain counsel, self-reporting to ODC, candor to a tribunal, advance fees and fee agreements, declining or terminating representation and safekeeping property. This seminar will feature speakers Patricia Bartley Schwartz, Esq., of the Office of Disciplinary Counsel, and Charles Slanina, Esq., of Finger & Slanina, LLC.
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By Morris James LLP on January 16, 2015
Parsons v. Digital River Inc., C.A. 10370-VCG (January 12, 2015)
What is a material disclosure in one deal is not always material in another transaction, as this decision explains. Context counts. Hence, merely arguing that a past decision held a disclosure was needed may not work in the present case.
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By Morris James LLP on January 16, 2015
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 is being paid to the lawyer who files an action attacking a transaction and then gives up the suit after some sort of additional disclosure is made that she argues makes the case "moot." Instead, the Court wants notice to be given to the stockholders.
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By Morris James LLP on January 15, 2015
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 to this litigant, which is to be commended.
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By Morris James LLP on January 15, 2015
Itron Inc. v. Consert Inc., C.A. 7720-VCL (January 15, 2015)
This decision may change litigation practice in the Court of Chancery. Most lawyers, myself included, dislike arguing over the statement of admitted facts required in a pretrial order. There are many reason for that, such as the need to go over statements carefully to be sure each does not spin the facts unfairly. That is tedious, particularly when the facts asked to be admitted seem irrelevant to the proceedings or are prejudicial. After all, who wants a client's past troubles aired before the Court when attempts to get them into evidence would never succeed during trial? However, Chancery trials are bench trails before experienced chancellors and unfair prejudice is less a problem there.
In any case, this decision requires the parties to admit anything that is true in a proposed statement of facts in a pretrial order. The facts may come from admissions in an answer, in discovery, or otherwise. This will take work. However, given that the Court is already burdened, that the lawyers are getting paid to do the work, and that arguments over what is or is not relevant are too time consuming in a judge-only trial, the need to do the work is justified.
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By Morris James LLP on January 14, 2015
A fairly new litigation development is the subject of two Delaware Court of Chancery decisions issued on the same day. Both In re Appraisal of Ancestry.com, Consol. C.A. No. 8173-VCG (Jan. 5, 2015), and Merion Capital v. BMC Software, C.A. No. 8900-VCG (Jan. 5, 2015), sustained the right of appraisal arbitrageurs to seek appraisal of the stockholdings following a cash-out merger. Had the court ruled differently, it might have severely limited such actions in Delaware. More ›
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By Morris James LLP on January 12, 2015
Bear Stearns Mortgage Funding Trust 2006-SL1 v. EMC Mortgage LLC, C.A. 7701-VCVL (January 12, 2015)
This is an important decision because it is the first to interpret the amendment to the general statute of limitations in contract actions to permit extending the limitations period by a contract.
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By Morris James LLP on January 7, 2015
Authored By Lewis Lazarus
This article was originally published in the
Delaware Business Court Insider | January 7, 2015
When a Delaware corporation engages in a sale of control transaction, its board's obligation is to obtain the highest value reasonably attainable. This obligation, often referred to as
Revlon duties, may be fulfilled as long as the board acts reasonably even if its process is not perfect. A Delaware court reviewing a challenge to a board's exercise of
Revlon duties does so with enhanced scrutiny to determine whether the board acted reasonably to maximize shareholder value. No single blueprint exists that a board must follow.
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By Morris James LLP on January 6, 2015
Merion Capital LP v. BMC Software, Inc., C.A. 8900-VCG (January 5, 2015) and
In Re Appraisal Of Ancestry.com Inc., C.A. 8173-VCG (January 5, 2015) both deal with appraisal arbitrage and resolve who is entitled to file an appraisal action. The basic issues these two decisions address is whether a buyer of stock after a merger is announced must prove the stock to be appraised did not vote for the merger. So long as the depository in whose name the stock is listed did hold more stock than voted for the merger, the Court holds the new buyer need not trace his ownership to specific stock. Of course, the stock sought to be appraised must be less in number than the stock who did not vote for the merger.
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By Morris James LLP on January 5, 2015
Authored By Albert H. Manwaring, IV
This article was originally published in the
Delaware Business Court Insider | December 30, 2014
Delaware courts have routinely upheld post-closing merger price adjustments that comply with the requirements of Section 251 of the Delaware General Corporation Law. To allow stockholders to make an informed decision as to whether to accept the merger consideration, or seek appraisal, Section 251 requires that the value of the "cash, property, rights or securities ... which the holders ... are to receive" as consideration in the merger be determinable or ascertainable by the stockholders at or about the time of the merger.
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By Morris James LLP on January 2, 2015
Prokupek v. Consumer Capital Partners LLC, C.A. 9918-VCN (December 30, 2014)
This decision applies settled law in the corporate context to hold that a former member of an LLC may not obtain inspection rights because those are limited to current members. The opinion is also interesting in that it holds that even if the member interests were redeemed at too low a price, the right to inspect ended and the former member should pursue a breach of contract claim.
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By Morris James LLP on December 30, 2014
Delaware Super Lawyers® Business Edition has recognized six Morris James partners as top business attorneys in Delaware. Those who were included in this special edition of Super Lawyers® excelled in the business-related practice areas of Business and Transactions; Construction, Real Estate and Environmental; Employment; Intellectual Property; and Litigation. The Super Lawyers® Business Edition is an annual go-to guide for general counsel and executives. Morris James’ 2014 selections include: P. Clarkson Collins, Jr. – Litigation Richard K. Herrmann – Intellectual Property Peter B. Ladig – Litigation Lewis H. Lazarus – Litigation Edward M. McNally – Litigation James W. Semple – Litigation
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By Morris James LLP on December 29, 2014
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 points out, there may be a right to fees incurred in a partially successful defense and, even worse, a right to fees for fees incurred to establish that right. Ignoring that just makes bad situation worse.
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