Lewis H. Lazarus

December 18, 2024 | Delaware Business Court Insider

The plaintiff contended that the court should “blue pencil” a contractual noncompete to give the plaintiff the benefit of his bargain, even if the contract was overly broad. The defendant contended that when a party did not negotiate in any way the terms of the covenant not to compete and received minimal consideration in exchange, and the covenants themselves were overly broad, the Court of Chancery has discretion to decline to enforce the covenants entirely.

By Lewis H. Lazarus

4 minute read

September 11, 2024 | Delaware Business Court Insider

This case illustrates that the court generally will not use Section 205 to validate a deliberate, intentional violation of a statute to set the record date for a meeting, at least when a short period of time passes between the defective action and the court proceeding.

By Lewis H. Lazarus

4 minute read

April 10, 2024 | Delaware Business Court Insider

As demonstrated by Harrison Metal Capital III v. Mathe, failure to assert well-pleaded allegations showing that a majority of the board is disabled from disinterestedly and independently evaluating whether to bring an action is fatal to a stockholder derivative claim.

By Lewis H. Lazarus

5 minute read

December 13, 2023 | Delaware Business Court Insider

Parties in business transactions sometimes decide by contract that disputes relating to or arising out of their contractual relationship shall be resolved by arbitration. If and when a dispute arises, a threshold issue is whether the dispute is covered by arbitration and if so, whether any aspect may be resolved by a court.

By Lewis H. Lazarus

6 minute read

September 13, 2023 | Delaware Business Court Insider

In IBEW Local Union 480 Defined Contribution Plan and Trust v. Winborne, the Court of Chancery provided guidance concerning the holistic inquiry that the court uses to assess good faith, holding that the plaintiff successfully had pleaded that a majority of the board acted in bad faith in approving a buyout of a liability for $850 million that the company contemporaneously valued at $175.3 million in its audited financial statements.

By Lewis H. Lazarus

6 minute read

April 12, 2023 | Delaware Business Court Insider

In Hyde Park Venture Partners Fund III v. Fairxchange, the Delaware Court of Chancery reaffirmed the joint client concept of corporate privilege and held that the company could not assert privilege against a former director or his designating investor except as to a books and records demand in which the company and the director were contemporaneously adverse.

By Lewis H. Lazarus

6 minute read

September 07, 2022 | Delaware Business Court Insider

When a controlling stockholder is on both sides of a transaction, the Delaware courts' most searching standard of review, entire fairness, is likely to apply. That generally means that a plaintiff who can credibly allege unfairness is likely to survive a motion to dismiss. It does not follow, however, that plaintiff will prevail at trial.

By Lewis H. Lazarus

5 minute read

April 27, 2022 | Delaware Business Court Insider

Under Section 212(e), a proxy may be made irrevocable "if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power." But, once established, does an irrevocable proxy bind only the individual stockholder who granted the proxy, or does it also bind subsequent holders of the stock, too?

By Lewis H. Lazarus and R. Eric Hacker

6 minute read

December 08, 2021 | Delaware Business Court Insider

A plaintiff seeking to bring derivative claims on behalf of a Delaware corporation bears a heavy burden if she has not made demand and seeks to demonstrate that demand would be futile based on directors' alleged substantial risk of personal liability from approving the transaction under attack.

By Lewis H. Lazarus

5 minute read

September 08, 2021 | Delaware Business Court Insider

A stockholder complaining about a merger transaction materially enhances her prospects of overcoming a motion to dismiss if she can allege self-dealing by a controlling stockholder or that the transaction involves a change of control, thereby invoking the entire fairness standard of review or enhanced scrutiny.

By Lewis H. Lazarus

5 minute read