April 10, 2024 | Delaware Business Court Insider
Chancery Dismisses Derivative Action Based on Plaintiff's Failure to Allege Particularized Facts Demonstrating Demand FutilityAs 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
Chancery Denies Motion to Vacate Advancement Orders Based on Belated Assertion of Arbitration ProvisionParties 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
Court of Chancery Sustains Derivative Complaint Based on Allegations That the Board Acted in Bad FaithIn 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
Chancery Re-Affirms That Director-Designating Investor Is Entitled to Privileged Communications From Company Counsel in Appraisal LitigationIn 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
Chancery Finds Defendants Post-Trial Proved Fairness of Controlling Stockholder TransactionWhen 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
Language and Context Lead Chancery to Conclude That Irrevocable Proxy Does Not Bind Subsequent TransfereeUnder 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
Court Dismisses Derivative Complaint Where Plaintiff Fails to Plead a Risk of Personal Liability by DirectorsA 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
Court of Chancery Dismisses Complaint Attacking Merger TransactionA 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
April 28, 2021 | Delaware Business Court Insider
Chancery OKs Section 220 Inspection, Notwithstanding Attorneys' Heavy Involvement in Crafting DemandSection 220 of the DGCL enables a stockholder to obtain limited corporate information if they can state a proper purpose. Although in theory straightforward,…
By Lewis H. Lazarus and R. Eric Hacker
5 minute read
February 17, 2021 | Delaware Business Court Insider
Delaware Corporate and Commercial Case Law Year in Review: 2020Our criteria for selection are that the decision either meaningfully changed Delaware law or provided clarity or guidance on issues relevant to corporate and commercial litigation in Delaware.
By Lewis H. Lazarus, Albert H. Manwaring IV and Albert J. Carroll
21 minute read
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