Posts tagged Case Summaries

Court of Chancery Accepts Fiduciary Status Through Partnership Interest-Assignment And Appraises Interest's Value

Ramunno v. Capano, et al., C.A. No. 18798-NC, 2006 WL 375541 (Del. Ch. Feb. 10, 2006). This is a fiduciary claim based action to appraise the fair value of real property brought by the trustee of four trusts that held a 12.1% interest in that property held by the defendant entity and its two majority interest holders, after that entity's merger into a new Delaware limited partnership. More › Share

Court of Chancery Denies Defendants' Demand For Intercontinental Depositions Approving Videoconferencing Under R.30(b) And Limits Number Of Deponents

Unisuper Ltd., et al. v. News Corporation, et al., C.A. No. 1699-N, 2006 WL 375433 (Del. Ch. Feb. 09, 2006). Defendants filed cross-motions requiring depositions of thirteen named plaintiffs' under Ch. Ct. R. 30(b)(6) in either Delaware or New York. Plaintiffs filed motions for protective orders, to limit the numbers of deponents and contended depositions could occur outside the United States via videoconferencing. The plaintiffs' Australian company had reincorporated in Delaware. Plaintiff sought equitable relief requesting its shareholders to be permitted to vote on a poison pill's extension. The court treated this matter as a representative one, rather than an individual shareholder suit. More › Share

Court of Chancery Grants Expedited Injunction Proceedings In Interested Merger's Disclosure Claim

In re Serena Software, Inc. S'holders Litig., C.A. No. 1777-N, 2006 WL 375599 (Del. Ch. Feb. 09, 2006). This is a motion for expedited proceedings for a preliminary injunction pertaining to certain disclosure claims not made public in SEC-filed proxy statements soliciting shareholder vote for an agreement for sale of the corporation at $24 per share. Class actions were earlier filed in the Delaware Court of Chancery and California's Superior Court challenging the sale transaction as a director-interested one. More › Share

District Court Grants Individual Director's Motion to Dismiss Securities Class Action

In re AstroPower Inc. Securities Litig., C.A. No. 03-260-JJF, 2006 WL 288120 (D. Del. Feb. 7, 2006). Plaintiffs alleged that defendants violated Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 by fraudulently overstating AstroPower's revenue in press releases and in SEC filings, and that, as a result, they had purchased their AstroPower stock at artifically inflated prices. Plaintiffs also alleged that the defendants qualified as "controlling persons", as that term is defined in Section 20 of the Exchange Act, of AstroPower and therefore liable to plaintiffs. Defendant Thomas J. Stiner, a Chief Financial Officer, Senior Vice President and director of AstroPower, moved to dismiss the complaint as to him. More › Share

District Court Allows Plaintiff in Illinois Securities Class Action to Intervene in Delaware Action and Stays Delaware Action in Favor of First-Filed Illinois Action

Hyland v. Harrison, C.A. No. 05-162-JJF, 2006 WL 288247 (D. Del. Feb. 7, 2006). Dr. Stephen Blau, the lead plaintiff in a securities class action pending in the U.S. District Court for the Northern District of Illinois (the "Illinois Action"), moved to intervene in the later-filed present action in Delaware that alleged similar claims against the defendants by the Delaware plaintiffs, after he learned that the Delaware plaintiffs had filed several amici curai briefs seeking to have the Illinois court vacate its order appointing Dr. Blau as lead plaintiff and to transfer the Illinois Action sua sponte to Delaware. Dr. Blau also sought to have the Delaware district court stay the Delaware action in order to allow the first-filed Illinois Action to proceed. More › Share

Court of Chancery Partially Grants Plaintiffs' Motion For A Preliminary Injunction Enforcing A Non-Competition Agreement

Deloitte & Touche USA LLP v. Lamela, C.A. No. 1542-N, 2005 WL 2810719 (Del. Ch. Oct. 21, 2005). Plaintiffs sought a preliminary injunction against Defendant to prevent him from soliciting any current, former or prospective clients that he had contact with while employed by Plaintiffs. More › Share

District Court Dismisses Proposed Insurance Class Action But Grants Leave to Amend Complaint

Eames v. Nationwide Mutual Insurance Co., C.A. No. 04-1324-KAJ, 412 F. Supp. 431 (D. Del. 2006). Plaintiffs filed a proposed class action alleging that defendant Nationwide Mutual Insurance Company ("Nationwide") misrepresented to class members the limits of liability of the Personal Injury Protection ("PIP") coverage that was included in Nationwide's automobile policies. Nationwide moved to dismiss for failure to state a claim. More › Share

Court of Chancery Holds For Defendant-Corporation On Untimely Stock-Options Claim

Richard W. Vague v. Bank One Corporation, et al., C.A. No. 18741, 2006 WL 290299 (Del. Ch. Feb. 01, 2006). In this post-trial opinion, the court examines an untimely claim on stock-options against employer-corporation after expiration of contractually agreed limitations period and the corporation's claim against another employee for violation of duties related to the claim of options. More › Share

Superior Court Grants Defendant's Motion to Dismiss for Lack of Personal Jurisdiction

Hutchison v. Bruehl, C.A. No. 05C-07-047 (JTV), 2006 WL 1149151 (Del. Super. Jan. 31, 2006) Plaintiff's father had an interest in gas and oil property in West Virginia from which he received royalties through an agent in Maryland. When her father died, the right to the royalties passed to Plaintiff. Agent failed to make payments until Plaintiff took steps to stop payment through the agent and have checks sent directly to her. She then sued to recover the funds kept by the agent in the interim. Defendant agent moved to dismiss, claiming Delaware lacked personal jurisdiction over him as a Maryland resident. More › Share

Delaware Supreme Court Reverses the Superior Court's Certification of Class in Suit Against Securities Dealers

Wit Capital Group, Inc. v. Benning, No. 568, 2004, 2006 WL 249983 (Del. Jan. 31, 2006). The plaintiffs sued the defendants, Wit Capital Group Inc. and Wit Capital Corporation ("Wit"), securities broker/dealers, alleging that the defendants breached their account agreement by failing to allow the plaintiffs to purchase certain IPO shares. The plaintiffs argued, pursuant to Superior Court Civil Rule 23(b)(3), that common questions of law or fact predominated over questions affecting individual class members. Reversing the Superior Court's decision to certify a class, the Delaware Supreme Court found that the plaintiffs failed to show fact of common injury affecting all plaintiffs. More › Share

Superior Court Finds that Insurers Are Not Yet Obligated to Reimburse AT&T for Funds Used for Shareholder Settlement and Grants Insurers' Motions to Dismiss Claims For Reimbursement of Settlement

AT&T Wireless Services, Inc. v. Federal Ins. Co., 03C-12-232 WCC, 2006 WL 267135 (Del. Super. Ct. Jan. 31, 2006). In 2002 AT & T Wireless Services, Inc. ("AWS") merged with TeleCorp PSC, Inc. Following the merger the TeleCorp shareholders filed a derivative action alleging that the TeleCorp directors had breached their fiduciary duties. The Court of Chancery approved a settlement of $47.5 million. AWS filed an action in Superior Court seeking reimbursement from TeleCorp's insurance carries and its own primary insurer, Faraday Capital Limited ("Faraday"), and its excess insurer, National Union Fire Insurance Company ("National Union"). AWS voluntarily dismissed Faraday. Subsequently, pursuant to Rule 12(b)(6), the insurers moved to dismiss, and the court granted their motions to dismiss the claims relating to reimbursement for the settlement. However, the court denied TeleCorp's primary insurer's motion to dismiss the claim for defense costs. More › Share

Superior Court Finds "Volunteer" Director of LLC Immune from Suit and Requires Plaintiff to File a More Definite Statement As to Whether Board's Actions Were Void

Gilliland v. St. Joseph's at Providence Creek, C.A. No. 04C-09-042, 2006 WL 258259 (Del. Super. Ct. Jan. 27, 2006). After the board of directors of an LLC terminated the plaintiff, the plaintiff filed suit, alleging, among other things, that the board's actions were void. The defendants moved to dismiss plaintiff's suit. The court found that one of the directors was immune from suit pursuant to 10 Del. C. § 8133, which grants immunity to an organization's volunteers. Another defendant, the LLC from which plaintiff had been terminated, argued that the claim against it should be dismissed because the board's actions were voidable rather than void. However, there was no indication that the Board had ever ratified the voidable acts. The Court directed the Plaintiff to file a more definite statement as to what it was claiming against that defendant. More › Share

Court Of Chancery Dismisses Complaint For R. 23.1 Failure Despite Corporation's Inadequate "Internal Controls" Attracting $50 million Fine

Stone, et al. v. Ritter, et al., C.A. No. 1570-N, 2006 WL 302558 (Del. Ch. Jan. 26, 2006). This matter involved an attempt to institute a derivative proceeding against fifteen current and former director defendants of AmSouth Bancorporation for alleged failures of fiduciary duties through insufficient internal control systems to guard against statutory violations under the Bank Secrecy Act and the Anti-Money Laundering Regulations. The defendants filed a motion to dismiss and it was granted by the court for insufficiency of pleading under Chancery Court Rule 23.1. On November 6, 2006, the Delaware Supreme Court affirmed this decision. More › Share

Court Of Chancery Holds That Unlike Corporations, LLC Agreements Can Mandate Arbitration For Fiduciary Breach Claims

Douzinas, et al. v. American Bureau of Shipping, Inc., et al., C.A. No. 1496-N (Del. Ch. Jan. 24, 2006) (published at 888 A.2d 1146 (Del. Ch. 2006). Minority shareholders brought a breach of fiduciary duty action against the managing member of the LLC. Additionally, they plead aiding and abetting conspiracy and unjust enrichment claims against defendants' affiliate entities. Relying on Delaware Supreme Court precedent, the defendants insist all claims require mandatory arbitration under the LLC agreement. The court agreed. More › Share

District Court Dismisses Potential Securities Fraud Class Action Involving Only Foreign Parties

Blechner v. Daimler-Benz AG, C.A. No. 04-331-JJF, 2006 WL 167835 (D.Del. Jan. 24, 2005). Plaintiffs, on behalf of themselves and other foreign shareholders who invested in securities of DaimlerChrysler AG, filed a class action complaint alleging securities fraud in connection with the merger of Chrysler Corporation and Daimler-Benz AG. Defendants moved to dismiss the complaint. More › Share