The Delaware Court of Chancery, in Neurvana Medical, LLC v. Balt USA, LLC, et al., C.A. No. 2019-0034-KSJM, memo. op. (Del. Ch. Feb. 27, 2020), dismisses a claim by the seller of a medical device that buyer failed to use Commercially Reasonable Efforts to secure regulatory approval that would trigger earn-out payments.
NEW: Morris James discusses the decision in Post-Closing Earn-Out Claims Dismissed, But Fiduciary Duty Claims Against Former Director Survive.
$$$ Law360 discusses the decision in Chancery Tosses Most Of Medical Device Co.’s Sabotage Suit.
The Delaware Court of Chancery, in Dr. Travis Martin v. Richard Bartlett, et al. and Harbor Diversified, Inc., C.A. No. 2018-0762-SG, memo. op. (Del. Ch. Feb. 5, 2020), found a stockholder was not entitled to an attorneys’ fees award for purported benefits incidentally obtained in litigation brought in pursuit of its own self-interested purpose of seeking a buy-out of his stock.
NEW: Morris James discusses the decision in Chancery Denies Fees to Stockholder who Compelled Admittedly-Overdue Annual Meeting, But Primarily for his Own Interest in Forcing a Buyout.
K&L Gates discusses the decision in Request for Attorneys’ Fees Denied Under Corporate Benefit Doctrine.
Bloomberg Law discusses the decision in Harbor Diversified Investor Takes Fee Bid to Delaware High Court.
Francis Pileggi discusses the decision in Chancery Denies Attorneys’ Fees for Successful Suit to Compel Annual Meeting.
The Delaware Court of Chancery, in Gary D. Voigt v. James S. Metcalf, et al. and NCI Building Systems, Inc., C.A. No. 2018-0828-JTL, memo. op. (Del. Ch. Feb. 10, 2020), finds it reasonably conceivable that a 35% stockholder exercised effective control through a combination of stock ownership, board appointee rights, blocking rights under a Stockholders Agreement, and other means of influence over the board and management.
NEW: Morris James discusses the decision in Surveying the Law, Chancery Declines to Dismiss a Claim that a 35% Holder was the Controlling Stockholder of the Acquirer (as Well as the Target).
Tulane Law’s Professor Ann Lipton discusses the decision in Who’s a Controlling Stockholder: Delaware Strikes Again.
Anne Sherry discusses the decision in Minority stockholder may yet have wielded control.
$$$ Law360 discusses the decision in Chancery Keeps Alive Suit Over $553M CD&R Deal Windfall.
$$$ Bloomberg Law discusses the decision in NCI Building Systems Directors Stuck With Suit Over 2018 Merger.
NEW: White & Williams discusses Delaware case law addressing fiduciary duties owed creditors and oversight liability in Board of Directors Guidance When Addressing Emergency Circumstances Occasioned by the COVID-19 Pandemic.
Cleary Gottlieb reviews Delaware case law developments during the year 2019 involving controlling stockholder transactions structured in accordance with M&F Worldwide, the duty of oversight, duties of activist investors, and books and records litigation.
Morris James summarizes significant decisions that changed or provided guidance on issues of Delaware corporate and commercial law in Delaware Corporate and Commercial Case Law 2019 Year in Review.
Francis Pileggi highlights key topics from a number of recent Delaware Supreme Court and Court of Chancery decisions from January and February 2020 in Anthology of Blurbs About Recent Delaware Corporate and Commercial Decisions.
The Delaware Court of Chancery, in David Shabbouei v. Laurent Potdevin, et al. and Lululemon Athletica, Inc., C.A. No. 2018-0847-JRS, memo. op. (Del. Ch. Apr. 2, 2020), dismisses a stockholder derivative action challenging a board’s decision to allow a company’s CEO to resign and receive severance, rather than terminate him for cause following employee complaints of inappropriate conduct, for failure to plead demand, examining individual directors’ likelihood of liability under a duty of oversight theory despite plaintiff’s insistence that it did not plead a Caremark claim.
NEW: Wachtell discusses the decision in Delaware Court of Chancery Rejects Challenge to CEO Separation Agreement.
$$$ Law360 discusses the decision in Lululemon Escapes Investor’s Toxic Work Culture Claims.
The Delaware Court of Chancery, in Hubert Owens v. Tim M. Mayleben, et al. and Esperion Therapeutics, Inc., C.A. No. 12985-VCS, memo. op. (Del. Ch. Feb. 13, 2020), dismissed putative derivative plaintiff’s claims challenging allegedly misleading public statements regarding a drug candidate on demand futility grounds for failing to plead directors faced a substantial likelihood of liability or made intentional misstatements, rejecting application of the “core operations” doctrine under which a court may infer board knowledge of matters relating to a corporation’s core product.
NEW: K&L Gates discusses the decision in Caremark Claim Dismissed Due to Inadequate Pleading of Demand Futility.
$$$ Law360 discusses the decision in Chancery Drops Suit Over Biopharma Firm’s Cholesterol Drug.
The Delaware Court of Chancery, in The Chemours Co. v. DowDuPont, Inc., et al., C.A. No. 2019-0351-SG, memo. op. (Del. Ch. Mar. 30, 2020), dismissed a spun-off subsidiary’s claims against its former parent’s successor in favor of arbitration, rejecting the subsidiary’s argument that it could not have assented to be bound by the spinoff agreement’s arbitration provisions because it was controlled by its parent.
NEW: Cleary Gottlieb discuss the decision in Don’t Bite the Hand that Feeds You: Delaware Court of Chancery Holds Spin-Offs Are Not Unconscionable.
The Washington Post discusses the decision in Judge dismisses Chemours lawsuit against DuPont.
Courthouse News Service discusses the decision in DuPont Ducks Suit From Entity Spun Off to Handle Chemical Liabilities.
Delaware Business Now discusses the decision in Chancery Court dismisses Chemours suit against DuPont.
NEW: Shearman & Sterling discusses the U.S. Court of Appeals for the Second Circuit’s decision in Chufen Chen, et al. v. Dunkin’ Brands, Inc., No. 18-3087, opinion (2d Cir. Mar. 31, 2020), finding that registration to do business in New York does no subject a company to general personal jurisdiction in The Second Circuit Holds that New York Business Registration Does Not Constitute Consent to General Personal Jurisdiction.
Sheppard Mullin discusses the U.S. Court of Appeals for the Second Circuit’s decision in Chufen Chen, et al. v. Dunkin’ Brands, Inc., No. 18-3087, opinion (2d Cir. Mar. 31, 2020), finding that registration to do business in New York does no subject a company to general personal jurisdiction in Second Circuit Holds that Registering to do Business in New York Under Section 1301 of the Business Corporation Law Does Not Constitute Consent to General Personal Jurisdiction in New York Courts.
The Court of Chancery, in K-Bar Holdings, LLC v. Robert A. Rucker, et al. and Tile Shop Holdings, Inc., C.A. No. 2019-0892-SG, transcript (Del. Ch. Nov. 8, 2019; filed Dec. 12, 2019), granted a motion to expedite plaintiff’s claim alleging that a publicly company board breached fiduciary duties by failing to take defensive steps while the company’s stock price was depressed, and a stockholder group increase its ownership from 30% to over 40%.
Freshfields discusses the ruling, and its relevance to current depressed market conditions, in Fiduciary Duties During a Time of Volatility.
Farrel Fritz discusses the New York Appellate Division’s decision in Favourite, Ltd., et al. v. Benedetto Cico, et al., No. 11166, opinion (N.Y. App. Mar. 3, 2020), which found that non-managing members of a manager-managed Delaware LLC, who owned more than 50% of the LLC’s membership interests and removed the LLC’s managers, lacked authority to revive the LLC after its certificate of formation was cancelled for failure to designate a new registered agent within 30 days of its former agent’s resignation in Unauthorized Certificate of Revival Dooms Delaware LLC’s Claims Against Former Managing Members.