Delaware Business Litigation Report

Court Of Chancery Enforces Delaware Law On Restrictive Covenants

KAN-DI-KI, LLC v. Suer,  C.A. No. 7937-VCP (July 22, 2015)

This is an interesting case just for the cast of characters involved. However, it also has 2 important legal points. More ›

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Court Of Chancery Permits Partial Settlement Of Appraisal Case

Mannix v. Plasmanet, Inc., C.A. No. 10502-CB (July 21, 2015)

This decision permits non-appearing dissenters to settle their appraisal claims over the objection of the appraisal petitioner.  This right is limited, however, to the non-appearing former stockholders and should not be read as permitting appearing stockholders to settle out.

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Court Of Chancery Denies Standing After Spin-Off

In re Abbvie Inc. Stockholder Derivative Litigation, C.A. No. 9983-VCG (July 21, 2015)

After a spin–off of a subsidiary, there is a question as to whether the subsidiary’s stockholders have standing to bring a derivative suit on behalf of the subsidiary for past wrongs against the subsidiary committed by the parent’s directors.  More ›

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Three Delaware Privacy Bills Businesses Should Know About

On Sunday, July 26, 2015, The News Journal® published an article titled, “Some still unaware of identity-theft bill.” Mordock, J., (2015, July 26), The News Journal, p.1E.

The News Journal article highlighted passage by the Delaware legislature in 2014 of House Bill 295, now codified as 6 Del. C. §5001C et seq.: Safe Destruction of Records Containing Personal Identifying Information.   Much of the article, however, focused on the fact that, despite the law going effective in January 2015, businesses either do not know about the law or do not know what they might need to do to comply. More ›

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Court Of Chancery Determines That Advancement Claim Is A General Creditor Claim

Andrikopoulos v. Silicon Valley Innovation Company LLC, C.A. 9899-VCP (July 30, 2015) and Henson v. Sousa, C.A. 8057-VCG (August 4, 2015)

These two decisions hold that an advancement claim should be treated as a claim of a general creditor by a company in liquidation. Hence, those claims do not get priority in payment along with administrative expenses of the receivership.

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Patricia A. Winston Obtain Jury Verdict for Radio One, Inc.

After a five-day jury trial in the Complex Commercial Litigation Division of the Delaware Superior Court, Patricia A. Winston obtained a verdict in favor of Radio One, Inc. in its dispute with another broadcaster, which sought $15 million in damages for an alleged breach of an Asset Exchange Agreement.  The jury deliberated for approximately 5 ½ hours before returning a verdict that Radio One was not in breach.  This case is one of only a handful of business disputes that have been tried before juries in Delaware’s business courts.

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Joseph R. Slights, III and Gretchen S. Knight to Speak at Supreme Court Review Seminar on September 25, 2015

Joseph R. Slights, III and Gretchen S. Knight will participate in a Delaware State Bar Association seminar titled “Supreme Court Review 2015: A Discussion of Decisions at the Highest State and Federal Judicial Levels.” Former Judge Slights and Ms. Knight will partake in a panel titled “Delaware Supreme Court Decisions.” There will also be a second panel discussing U.S. Supreme Court decisions with a preview of coming cases. More ›

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Patricia A. Winston Obtain Jury Verdict for Radio One, Inc.

After a five-day jury trial in the Complex Commercial Litigation Division of the Delaware Superior Court, Patricia A. Winston obtained a verdict in favor of Radio One, Inc. in its dispute with another broadcaster, which sought $15 million in damages for an alleged breach of an Asset Exchange Agreement.  The jury deliberated for approximately 5 ½ hours before returning a verdict that Radio One was not in breach.  This case is one of only a handful of business disputes that have been tried before juries in Delaware’s business courts.

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CorpCast Episode 8: The Controlling Stockholder

In this episode of CorpCast we go back to basics on the concept of the controlling stockholder.  We address what constitutes a controlling stockholder under Delaware Law, discuss the idea of “actual control,” and consider how the presence of a controlling stockholder affects the Court’s standard of review.  We’ll also discuss recent case law developments including In re KKR Financial Holdings, LLC, In re Crimson Exploration, Inc., and In re Sanchez Energy.

Love what you hear?  Go to our podcast tab for archived episodes and be sure to follow @DECorpCast for the latest updates.  If you have questions or comments, you can reach us at CorpCast@morrisjames.com.  Thank you for listening! More ›

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Delaware Expands Jurisdiction Over Directors

A recent but little-known decision by a Delaware court may have substantially expanded the state's jurisdiction over the directors of a Delaware corporation. Delaware has long had a director-consent-to-service statute: 10 Del. C. Section 3114 (the consent statute). Under that statute, consenting to serve as a director of a Delaware corporation also concomitantly gives consent to be sued in a Delaware court. However, the statutory language seemed to limit such suits to those involving a "violation of [the director's] duty in such capacity" as a director. Focusing on that language, for almost 25 years, Delaware courts held that the consent statute could only be used if at least one count of a complaint alleged the director-defendant had breached a fiduciary duty in his role as a director. Hence, absent such a claim, the consent statute was thought not to confer jurisdiction over a director by the Delaware courts. More ›

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Court of Chancery Explains Jurisdiction Despite Declaratory Judgment

Doe v. Coupe,  C.A. No. 10983-VCP (July 14, 2015)

It is often contended that the availability of a declaratory judgment in Superior Court to determine the parties’ rights may deprive the Court of Chancery of jurisdiction to grant an equitable remedy such as an injunction. After all, it is assumed that the parties will obey the decision of the Court in deciding their rights. More ›

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Court Of Chancery Explains The Continuing Wrong Doctrine

REDUS Peninsula Millsboro LLC v. Mayer, C.A. No. 8835-VCN (July 13, 2015)

It is settled law that a cause of action accrues when the wrong is committed, not when its effects continue to be felt in the future. But as this decision makes clear, that is not always the case. When additional wrongdoing adds to the injury, the action accrues with each wrongful act.

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Court Of Chancery Explains That The Existence Of A Controlling Stockholder Does Not Determine Demand Is Excused

Teamsters Union 25 Health Services & Insurance Plan v. Baiera,  C.A.  No. 9503-CB (July 13, 2015)

A transaction with a controlling stockholder that is the subject of a derivative complaint still requires that a majority of the directors be interested before demand is excused. More ›

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Court of Chancery Dismisses Appraisal Case For Violation Of The Continuous Ownership Rule

In re Appraisal Of Dell Inc., C.A. No. 9322-VCL (July 13, 2015)

To obtain appraisal rights following a merger a stockholder needs to continuously hold her stock through the merger date. But as this decision holds (and is almost certain to be appealed as the Court has itself invited), losing technical record title to the stock before the merger is complete also loses the right to an appraisal. Hence, great caution is needed by those who seek appraisal to be sure their stock is not retitled by their nominee.

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Delaware Superior Court Clarifies Breach Of Implied Covenant Claims

Charlotte Broadcasting LLC v. Davis Broadcasting of Atlanta LLC,  C.A. 13C-04-143-WCC (June 10, 2015)

This is an interesting decision because of its comments on when the implied duty to act fairly and in good faith may be asserted as a separate claim even when a claim based on the contract between the parties has not been breached under the contract’s literal terms. More ›

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