Edward M Mcnally

December 11, 2013 | Delaware Business Court Insider

The Delaware Court of Chancery continues to evolve its approach to multijurisdictional litigation. Exactly what that court will do next is uncertain. Its most recent decisions seem to rebut the prediction it would enjoin forum-shopping plaintiffs to prevent them from abusing the legal system by filing suits in multiple jurisdictions over the same controversy to try to pressure corporate defendants.

By Edward M. McNally

5 minute read

November 06, 2013 | Delaware Business Court Insider

Proxy contests can be as contentious as political elections. Fight letters inundate stockholders. Charges and countercharges abound. But does all this fighting need to follow any rules? In its Oct. 23 decision in Red Oak Fund L.P. v. Digirad, Del. Ch. C.A. 8559-VCN, the Delaware Court of Chancery attempted to answer that question.

By Edward M. McNally

5 minute read

September 04, 2013 | Delaware Business Court Insider

A recent decision of the Delaware Court of Chancery significantly affects the ability of preferred stockholders to cash out their investment in a Delaware corporation. Preferred stockholders need to take notice if they are to realize their investment expectations.

By Edward M. McNally

7 minute read

August 14, 2013 | Delaware Business Court Insider

The Delaware Supreme Court recently issued several decisions that some argue go a long way toward eliminating any duty by controllers of limited partnerships or limited liability companies to act in good faith and to deal fairly.

By Edward M. McNally

5 minute read

July 17, 2013 | Delaware Business Court Insider

Recently, several stock appraisal cases have turned out well for those stockholders persistent enough to see their claims through a trial. Does this mean that more stockholders will demand that the Delaware Court of Chancery ask that court to determine the value of their shares when they are cashed out in the merger? While it is too early to tell, there are several good reasons to believe that more appraisal cases will be filed.

By Edward M. McNally

5 minute read

June 26, 2013 | Delaware Business Court Insider

The Delaware Supreme Court on June 10 brought back to life claims alleging liability for a general partner's failure to act in good faith and to deal fairly with limited partners. Until the court's decision in Gerber v. Enterprise Products Holdings, 2013 LEXIS ____ (June 10, 2013), the Court of Chancery permitted general partners to almost escape liability to the limited partners by adopting sweeping exculpation language in limited partnership agreements. Gerber has now limited the protection such language was thought to provide.

By Edward M. McNally

5 minute read

June 12, 2013 | Delaware Business Court Insider

Directors of a Delaware corporation have one sure defense to a derivative suit — eliminate the pesky stockholder plaintiff's standing to sue. Of course, that tactic involves also eliminating all of the other stockholders as well by a cash-out merger and that requires a willing merger partner who is willing to pay fair value for all of the stock. But when there is a controlling stockholder involved and the cash is available, the cash-out merger ends what may be costly litigation.

By Edward M. McNally

6 minute read

May 15, 2013 | Delaware Business Court Insider

There is an uproar going on about the practice of filing suit over every merger announced for a publicly traded company. At least 90 percent of merger announcements are followed in a day or two by the filing of complaints alleging the merger is unfair to one or both of the companies involved. Given that these suits are filed so quickly and in almost every deal, they cannot be well researched and may well be meritless.

By Edward M. McNally

5 minute read

April 24, 2013 | Delaware Business Court Insider

Most defendants in corporate fiduciary duty litigation want to say, "My lawyer said it was all right." They usually avoid making that point for fear of waiving the attorney-client privilege. A recent Court of Chancery decision suggests that it is possible to say your lawyer advised you without opening the door to disclosure of exactly what the lawyer said. Doing so involves walking a tightrope. One slip and you're waiving your privilege. Yet, the benefits may be worth the risk.

By Edward M. McNally

5 minute read

March 27, 2013 | Delaware Business Court Insider

On March 15, the Delaware Court of Chancery significantly expanded the right of a stockholder to make direct claims against corporate fiduciaries. Previously, many of those claims were classified as derivative claims that could only be brought in the name of the corporate entity. As a result, stricter pleading rules applied and such claims might be dismissed for a variety of other reasons, such as a cash-out merger that denied standing to the plaintiff or a decision by an independent committee to drop the claim on behalf of the entity. Thus, by expanding the number of "direct" compared to "derivative" claims, the decision in Carsanaro v. Bloodhound Technologies, C.A. 7301-VCL (Mar. 15, 2013), expands stockholder rights.

By Edward M. McNally

5 minute read