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Case Law

Case Law

07/07/20 [UPDATED] Oracle – Aiding & Abetting

The Delaware Court of Chancery, in In re Oracle Corp. Derivative Litigation, C.A. No. 2017-0337-SG (consol.), memo. op. (Del. Ch. June 22, 2020), dismissed claims alleging that officers of an acquisition target aided and abetted breaches of duty by the acquirer’s directors and officers by failing to disclose information suggesting the acquirer’s deal process was tainted by self-interest, finding that the information was available to the acquirer’s board before the transaction closed.

NEW:  Frank Reynolds discusses the decision in Chancery nixes aiding and abetting liability for execs accused of helping set inflated price for NetSuite.

Shearman & Sterling discusses the decision in Delaware Court Of Chancery Grants Motion To Dismiss Holding That Fiduciaries Of Acquired Entity Did Not Aid And Abet Alleged Fiduciary Breaches By Acquirer.

$$$ Law360 discusses the decision in NetSuite Execs Escape Suit Over $9.3B Oracle Merger.

Stinson discusses the decision in Can Target Fiduciaries Aid and Abet an Acquirer’s Board for Breach of Fiduciary Duty?

07/06/20 [UPDATED] Dell Class V – Coercion

The Delaware Court of Chancery, in In re Dell Technologies, Inc. Class V Stockholders Litigation, C.A. No. 2018-0816-JTL (consol.), memo. op. (Del. Ch. June 11, 2020), declined to dismiss breach of fiduciary duty claims challenging a transaction purportedly structured in accordance with M&F Worldwide, finding that the special committee formed to consider the transaction was bypassed, and that an aspect of the transaction what would require conversion of shares was coercive.

NEW:  Ann Lipton discusses the decision in Judicial Primacy.

NEW: Freshfields discusses the decision in Chancery Court Denies Motion to Dismiss and Application of MFW Safe Harbor.

Pepper Hamilton discusses the decision in MFW Pitfalls: Bypassing the Special Committee and Pursuing Detrimental Alternatives.

Morris James discusses the decision in In New Dell Decision, Special Committee’s Narrow Mandate, Company’s Decision to Bypass Committee and Impermissible “Coercion” Prevent Dismissal Under MFW.

Mark S. Nelson discusses the decision in Coercion factors heavily into decision that entire fairness, not MFW, applied to Dell-VM Ware consolidation.

Pepper Hamilton discusses the decision in MFW Pitfalls: Bypassing the Special Committee and Retaining Authority to Pursue Detrimental Alternatives.

$$$ Law360 discusses the decision in Chancery Keeps $24B Dell Stock Swap Suit Alive.

$$$ Reuters discusses the decision in Delaware Chancery gives green light to lawsuit over Dell’s VMware deal.

07/03/20 [UPDATED] Towers Watson: Fraud on the Board

The Delaware Supreme Court, in City of Fort Myers General Employees’ Pension Fund, et al. v. John J. Haley, et al. [Towers Watson], No. 368, 2019, opinion (Del. June 30, 2020), reversed the Court of Chancery’s dismissal of breach of fiduciary duty claims, finding that stockholder plaintiffs adequately pled that target company’s CEO, who the board permitted to negotiate the terms of a merger, failed to disclose a proposed compensation plan that he would receive as CEO of the acquirer that could provide up to five times the compensation that he would receive under target’s compensation scheme.

NEW: Stinson discusses the decision in Director’s Undisclosed Conflict Prevents Application of Business Judgment Rule in Acquisition.

DealLawyers.com discusses the decision at Conflicts of Interest: Undisclosed Comp Discussions Rebut BJR.

06/29/20 [UPDATED] 77 Charters – Remote Controller

The Delaware Court of Chancery, in 77 Charters, Inc. v. Jonathan D. Gould, et al. and Stonemar Cookeville Partners, LLC, et al., C.A. No. 2019-0127-JRS, memo. op. (Del. Ch. May 18, 2020), found individual defendant, who was neither a member nor a manager of nominal defendant LLCs, conceivably owed fiduciary duties as the controller of the LLCs’ managing entity under In re USACafes.

NEW:  Morris James discusses the decision in Corporate Opportunity Doctrine Waiver Does Not By Itself Also Constitute a Waiver of Default Fiduciary Duties under an LLC Agreement.

Francis Pileggi discusses the decision in Chancery Rules on a Controller’s Fiduciary Duty of Loyalty.

Pepper Hamilton discusses the decision in Delaware Chancery Court Sustains Breach of Fiduciary Duty Claims Against Nonparty to LLC Agreement.

06/26/20 [UPDATED] DLO Enterprises – Asset Sale

The Delaware Court of Chancery, in DLO Enterprises, Inc. v. Innovative Chemicals Products Group, LLC, C.A. No. 2019-0276-MTZ, letter op. (Del. Ch. June 1, 2020), finds the rule that a merger target’s attorney-client privilege regarding merger negotiations passes by statute to the surviving corporation absent an express contractual carve out does not apply in the context of an asset sale.

NEW:  McGuireWoods discusses the decision in Delaware Court Clarifies Retention of Privilege in Asset Sales.

$$$ Law360 discusses the decision in Post-Transaction Privilege Lessons From Del. M&A Opinion.

Pepper Hamilton discusses the decision in Attorney-Client Privilege Does Not Pass to the Buyer in Asset Deal.

Stinson discusses the decision in Chancery Discusses Privilege Waiver in Context of Asset Purchase.

06/25/20 [UPDATED] AmerisourceBergen – Investigate Wrongdoing

The Delaware Court of Chancery, in Lebanon County Employees’ Retirement Fund v. AmerisourceBergen Corp., C.A. No. 2019-0527-JTL, memo. op. (Del. Ch. Jan. 13, 2020), found stockholders entitled to inspection of corporate books and records, relating to defendant pharmaceutical distributor’s monitoring of opioid shipments, for purposes of investigating possible wrongdoing, irrespective of whether the possible wrongdoing would support claims that were actionable or subject to indemnification. The Court certified interlocutory appeal of the prior decision in Lebanon County Employees’ Retirement Fund, et al. v. AmerisourceBergen Corp., C.A. No. 2019-0527-JTL, order (Del. Ch. Feb. 12, 2020).

NEW:  K&L Gates discusses the decision in Chancery Court Reaffirms Delaware Policy of Broad Section 220 Stockholder Inspection Rights.

Market Screener discusses the decision in  AmerisourceBergen : Delaware Supreme Court Accepts Interlocutory Appeal Of Court Of Chancery Decision Granting Stockholders’ Request To Inspect Books And Records, And To Conduct A Rule 30(b)(6) Deposition In A Section 220 Action.

Kramer Levin discusses the decision in Delaware Supreme Court Accepts Interlocutory Appeal of Court of Chancery Decision Granting Stockholders’ Request to Inspect Books and Records, and to Conduct a Rule 30(b)(6) Deposition in a Section 220 Action.

$$$ Law360 discusses the decision in  Del. Justices To Weigh In On AmerisourceBergen Doc Fight.

Proskauer Rose discusses the decision in Vice Chancellor Veers Away from Delaware Section 220 Precedent.

Locke Lord discusses the decision in Locke Lord QuickStudy: Delaware Expands Stockholder Rights to Demand Information and Facilitates Caremark Claims.

Reuters discusses the certification decision in Dela. judge okays Supreme Court review of controversial books-and-records decision.

Morris James discusses the decision in Chancery Further Explains the “Proper Purpose” Requirement for Section 220 Demands.

DealLawyers.com discusses the decision in Books & Records: Del. Chancery Decision Broadens Inspection Rights.

Lowenstein Sandler discusses the decision in Delaware Chancery: Investors Are Entitled to Inspection Rights, Which May Include a Deposition.

The National Law Review discusses the decision in Delaware Court of Chancery Finds No Showing of Actionable Claim Required to Inspect Books and Records.

Kramer Levin discusses the decision in Delaware Chancery Court Holds That Stockholders Had a “Proper Purpose” to Seek Board Materials From Opioid Distributor, and Orders a 30(b)(6) Deposition, in Section 220 Books and Records Action.

The National Law Review discusses the decision in Court of Chancery Expands Stockholder Right to Corporate Books and Records.

Francis Pileggi discusses the decision in Vice Chancellor Does Not Follow Prior Section 220 Decisions.

Morrison & Foerster discusses the decision in Court of Chancery Rejects Common Company Defenses to Stockholder Inspection Demands, Creating Split of Authority Within Delaware.

Sullivan & Cromwell discusses the decision in Delaware Chancery Court Orders Production of Board Materials and Deposition of Corporate Representative in Section 220 Books and Records Litigation.

Fox Rothschild discusses the decision in AmerisourceBergen Ordered to Produce Board Level Documents Relating to Opioid Investigations in Section 220 Books and Records Action.

$$$ Law360 discusses the decision in Chancery Energizes Investor Bids To Probe Corporations.

Alison Frankel discusses the decision in Delaware Chancery judge pushes back against limits on books-and-records demands.

06/25/20 [UPDATED] ODN Holding – Redemption Rights

The Delaware Court of Chancery, in The Frederick Hsu Living Trust v. Oak Hill Capital Partners III, LP, et al. and ODN Holding Corp., C.A. No. 12108-VCL, memo. op. (Del. Ch. May 4, 2020), found a controlling stockholder engaged in unfair dealing by causing a company to accumulate cash to satisfy its redemption rights, but that its actions were entirely fair because market conditions made other deployment of cash likely useless.

NEW:  Stinson discusses the decision in Private Equity Firm Proves Strategy was Entirely Fair.

$$$ Law360 discusses the decision in Revisiting The Benefits Of An Efficient Contract Breach.

Shearman & Sterling discusses the decision in Delaware Court of Chancery Finds Controlling Investor’s Cash-Accumulation Strategy in Advance of Preferred Stock Redemption Payments Satisfied Entire Fairness.

Stinson discusses the decision in Private Equity Firm Proves Strategy was Entirely Fair.

Weil Gotshal discusses the decision in Preferred Buyers Beware.

06/24/20 [UPDATED] Clovis Oncology – “Mission Critical” Regulatory Compliance

The Delaware Court of Chancery, in In re Clovis Oncology, Inc. Derivative Litigation, C.A. No. 2017-0222-JRS (consol.), memo. op. (Del. Ch. Oct. 1, 2019), declined to dismiss Caremark claims where plaintiffs alleged that the board knowingly ignored red flags warning of “mission critical” regulatory compliance failure.

NEW: Orrick discusses the decision in Board Oversight of Clinical Trials During the Pendency of the COVID-19 Pandemic.

K&L Gates discusses the decision in Another “Well-Pled” Caremark Claim Survives A Motion To Dismiss: Lessons From Recent Cases On Risk Management, Compliance Systems, And Fiduciary Duties.

Cahill discusses the decision in Delaware Court Denies Another Motion to Dismiss a Caremark Claim Against Directors.

Snell & Wilmer discusses the decision in Delaware Court of Chancery Permits Caremark Claim Alleging Directors’ Failure to Monitor Critical Company Business Operations.

WilmerHale discusses the decision in Another Reminder from Delaware About the Duty of Oversight.

Hunton Andrews Kurth discusses the decision in Further Developments in Delaware’s Duty of Director Oversight.

06/22/20 [UPDATED] Allergan – Stockholders’ Representative

The Delaware Court of Chancery, in Fortis Advisors, LLC v. Allergan WC Holding, Inc., C.A. No. 2019-0159-MTZ, letter op. (Del. Ch. May 14, 2020), found that selling stockholders’ representative, in an action seeking payment of an earnout under a Merger Agreement, was not required to provide discovery from the selling stockholders, and such a requirement was contrary to the Agreement’s representative framework.

NEW:  Stinson discusses the decision in Shareholder Representative Provision Precludes Discovery From Selling Shareholders.

Morris James discusses the decision in Chancery Finds Stockholder Representative Did Not Control Former Stockholders’ Discoverable Material.

Sheppard Mullin discusses the decision in Delaware Court of Chancery Strictly Construes Right to Discovery of Stockholders Represented By a Contractually Created “Shareholder Representative”.

Francis Pileggi discusses the decision in Chancery Rules on Real-Party-In-Interest Issue.

06/22/20 [UPDATED] Fresh Market – Aiding & Abetting

The Delaware Court of Chancery, in Elizabeth Morrison v. Ray Berry, et al. [Fresh Market], C.A. No. 12808-VCG, memo. op. (Del. Ch. June 1, 2020), found it conceivable that a merger target’s financial advisor aided and abetted breaches of fiduciary duties by target’s fiduciaries by providing information regarding the deal process to the acquirer, but dismissed aiding and abetting claims asserted against the target’s counsel and against the acquirer.

NEW:  $$$ Law360 discusses the decision in M&A Ruling Shows Importance Of Informing Target Boards.

Cleary Gottlieb discusses the decision in Knowledge Is Key: Recent Decision Addresses Aiding and Abetting Claims Against Board Advisors And Buyer.

$$$ Law360 discusses the decision in JPMorgan Can’t Nix Fresh Market Sale Suit, But Cravath Exits.