After the enactment of Section 109(b) of the Delaware General Corporation Law, one would have thought that fee-shifting bylaws were invalid. However, this decision deals with another attempt to shift fees, this time when a...more
This is an important decision because it limits the use of the typical fraud exclusion in a D&O policy to avoid liability to the insured. The insured David Murdoch was found to have breached his fiduciary duty to Dole Foods...more
This is another decision in the continuing development of Delaware law on how to determine the acquired company’s fair value in an appraisal action. The decision carefully reviews the more recent opinions on whether the...more
Appraisal petitioners normally agree to consolidate their actions, on which law firm(s) will represent them, and on how their common objectives will be carried out. That did not happen in this case: the petitioners disputed...more
The Delaware LLC Act provides for personal jurisdiction in Delaware over those who manage a Delaware LLC—i.e., those who are named as managers in the LLC agreement, and those who participate materially in the LLC’s...more
This is an important decision because it clarifies when a stockholder loses standing to bring a fiduciary duty case because he sold his stock. Briefly, breach of fiduciary duty claims may be direct (belonging to the...more
Many contracts for the sale of a company have a provision addressing how the parties should resolve disagreements concerning post-closing adjustments to the sale price. Exactly who is to resolve those disputes (be it an...more
When a stockholder files a derivative suit she can avoid dismissal under Rule 23.1’s pre-suit demand-on-the-board requirement by showing that a majority of the directors were not independent enough to fairly consider her...more
Even after a board rejects a plaintiff-stockholder’s demand to bring a derivative litigation, the plaintiff may proceed to bring that derivative action if the plaintiff can show the demand was “wrongful.” Having conceded...more
Large commercial contracts frequently try to limit a buyer’s remedies for any extra-contractual misrepresentations by the seller. Many Delaware decisions deal with disclaimers of extra-contractual representations and this...more
Delaware strongly protects a party’s right to advancement of attorney’s fees. This decision holds that a claim of fraudulent inducement cannot be asserted as a defense in a contractual advancement case even when the fraud is...more
This decision holds that a general obligation to indemnify another party to a contract applies only to claims filed by a third party and not to claims between the parties to the contract itself. Hence, if you want to cover...more
This is an interesting decision in a small case. The Court granted the request to dissolve a Delaware entity in deadlock, but conditioned that dissolution on an agreement not to use the fact of dissolution in another...more
This decision explains the difference between a defendant’s right of setoff and recoupment. The key difference is that the right of setoff arises out of an independent transaction, while recoupment must be based on the same...more
D&O policies often attempt to exclude from coverage sums paid to disgorge unlawful profits. The underlying theory is that the company did not suffer a true loss when it has to give back something that it never should have had...more
This decision addresses issues that may arise when there are successive arbitrations involving the same basic set of facts, if different parties. It concludes that when engaging in the limited judicial review which asks...more
Plaintiffs’ attorneys in representative litigation may obtain awards of fees and expenses when their efforts prove successful and provide benefits to the represented class. This decision explains how the Court of Chancery...more
Under the recent Corwin decision, a fully-informed vote by uncoerced and disinterested stockholders to approve a merger invokes the business judgment rule and effectively precludes almost any claim the merger was improper. ...more
The issuance of additional stock in exchange for less than fair value typically is a harm falling on the company, and hence gives rise to a derivative claim. But, such a claim might be dual natured – partially direct and...more
A merger approved in accordance with the criteria set out in the M&F Worldwide decision is subject to the business judgment standard of review, and vulnerable to attack only if its terms are so extreme as to constitute waste....more
Delaware recently amended Section 111 of the DGCL to confer jurisdiction on the Court of Chancery over certain actions arising out of asset sales. The intent was not to divest Superior Court of jurisdiction when the dispute...more
Now that disclosure-only settlements seem almost a thing of the past, so-called “mootness” fee awards or settlements may become more common. These occur when the corporation moots the claim by doing what the plaintiff says...more
This decision holds that Revlon duties are not implicated by a decision to liquidate a company. Hence, the Court will not scrutinize whether the board sought to get the best possible deal for company assets....more
It may surprise many of us to know that a party who does not sign a general release may still be bound by its terms. Yet, that is what this decision holds under this case’s facts, which involved New York law and a release...more
Forum selection bylaws are a powerful tool for companies to avoid the burdens of multi-forum litigation. But those bylaws only cover the claims falling within their terms. Where, as here, the bylaw only covers fiduciary...more