Lewis H. Lazarus

July 26, 2017 | Delaware Business Court Insider

Companies often defend against stockholder requests to inspect books and records by contending that the plaintiff stockholder lacks a proper purpose or that his or her stated purpose is not the real purpose.

By Lewis H. Lazarus

8 minute read

May 31, 2017 | Delaware Business Court Insider

Stockholders who believe that a board breached its fiduciary duties in connection with information provided to stockholders asked to vote for a merger transaction can either seek to enjoin the transaction or seek damages post-closing.

By Lewis H. Lazarus

11 minute read

April 04, 2017 | Delaware Business Court Insider

Contract interpretation is a staple of litigation in the Delaware Court of Chancery. Disputes over the meaning of commercial contracts, foundational documents such as certificates of incorporation or bylaws or agreements governing alternative entities such as limited liability companies or limited partnerships require the court to interpret language in contracts. So too do merger, stock purchase or sale of asset agreements. With the expansion of jurisdiction under Section 111(a)(2) of the Delaware General Corporation Law (DGCL) in 2016, disputes over the interpretation of agreements arising out of stock purchase and asset sale agreements may be expected to increase the number of cases requiring the court to interpret parties' agreements. The recent case of Shareholder Representative Services v. Gilead Sciences, C. A. No. 10537-CB (March 15), illustrates the methodology the court uses to interpret a contract and provides a primer for litigants seeking guidance on how the Court of Chancery resolves contract disputes.

By Lewis H. Lazarus

10 minute read

February 01, 2017 | Delaware Business Court Insider

The Delaware courts have been critical of litigants who bring derivative claims without first seeking books and records.

By Lewis H. Lazarus

11 minute read

November 30, 2016 | Delaware Business Court Insider

The Delaware courts encourage plaintiffs who bring derivative claims in Delaware without making demand on the board of directors to seek books and records under Section 220 of the Delaware General Corporation Law so as to be able to plead facts sufficient to demonstrate that demand is excused. Many claims have been dismissed under Delaware Court of Chancery Rule 23.1 because a plaintiff failed to utilize the "tools at hand" to obtain relevant books and records. When a plaintiff grounds its claim on directors' alleged failure to exercise oversight, however, even receipt of books and records may not enable a plaintiff to plead facts sufficient to demonstrate that the directors knowingly ignored their duties so as to have acted in bad faith. That high standard as articulated by the Delaware Supreme Court in Stone v. Ritter makes a Caremark claim for breach of directors' oversight duties as among the most difficult in corporate law. The Court of Chancery's recent decision in Reiter v. Fairbank, C.A. No. 11693-CB (Del. Ch. Oct. 18), demonstrates that, regardless of the injury allegedly sustained by the subject company, a pleading based on books and records obtained from the company that at best reflects awareness of "yellow flags" is not sufficient to call into question the directors' good faith and hence to excuse demand, thus requiring dismissal of the plaintiff's derivative claim.

By Lewis H. Lazarus

12 minute read

October 12, 2016 | Delaware Business Court Insider

The Delaware Court of Chancery's well-reasoned decision in The Huff Energy Fund v. Gershen, C.A. No. 11116-VCS (Del. Ch. Sept. 29), illustrates the care by which a Delaware court will examine the potential contractual and fiduciary duties at issue when a board adopts a plan of dissolution following a sale of a significant portion of its assets.

By Lewis H. Lazarus

13 minute read

August 24, 2016 | Delaware Business Court Insider

It is well-settled under Delaware law that in a merger a stockholder loses standing to assert a purely derivative claim.

By Lewis H. Lazarus

12 minute read

July 06, 2016 | Delaware Business Court Insider

Parties who at the signing of a merger agreement are eager to close may have a change of heart if intervening adverse market conditions reduce or eliminate the economic benefits.

By Lewis H. Lazarus

19 minute read

May 18, 2016 | Delaware Business Court Insider

When alternative entities first came into prominence, questions arose concerning the applicability to them and their stakeholders of corporate law fiduciary duty jurisprudence.

By Lewis H. Lazarus

12 minute read

April 06, 2016 | Delaware Business Court Insider

The Delaware courts regularly address contract claims arising out of merger agreements. Among other recurring issues are whether and how the parties limited claims based on alleged misrepresentations or omissions, whether a party can state a claim for breach of the implied covenant of good faith and fair dealing, and the nature of the remedies available in the event of breach.

By Lewis H. Lazarus

12 minute read