Lewis H Lazarus

November 21, 2012 | Delaware Business Court Insider

In transactions where a majority of directors or a controlling stockholder stands on both sides, the Delaware courts apply the entire fairness standard of review. That standard also applies in the limited liability company or limited partnership context where the parties adopt that standard by contract. While the two prongs of this nonbifurcated standard are well known - fair dealing and fair price - not that many cases have been tried and resulted in a Court of Chancery opinion that is then subject to review by the Delaware Supreme Court.

By Lewis H. Lazarus

7 minute read

August 28, 2013 | Delaware Business Court Insider

The standard of review for a transaction involving a controlling stockholder may determine whether the proponents can expect a Delaware court to approve a contested transaction without a trial.

By Lewis H. Lazarus

8 minute read

March 14, 2012 | Delaware Business Court Insider

Chancellor Leo E. Strine Jr. has long had a high regard for the ability of stockholders to decide for themselves what is in their own best interests. A corollary of that is judicial restraint when stockholders on full information of flaws and conflicts of interests in a sales process have the opportunity to approve or reject a merger transaction with a substantial 47.8 percent control premium, albeit one likely not as robust as a well-run sales process may have generated.

By Lewis H. Lazarus

6 minute read

October 26, 2011 | Delaware Business Court Insider

Parties to a well-drafted contract can expect the Delaware courts to enforce the bargain reflected in their agreement, and that includes an agreement on forum selection. The Court of Chancery's Sept. 14 decision in ASDC v. The Richard J. Malouf All Smiles Grantor Retained Annuity Trust provides guidance to practitioners on how to draft and enforce a forum selection clause. The key takeaway is that a party who negotiates for dispute resolution in a Delaware forum can expect the Delaware Court of Chancery to enforce its forum selection and, where appropriate, enjoin the opposing party from going forward with litigation elsewhere.

By Lewis H. Lazarus Special to the DBCI

7 minute read

August 08, 2012 | Delaware Business Court Insider

A contract provision in a limited liability company agreement that entitles the prevailing party to reimbursement for all reasonable fees and costs in connection with enforcement of the agreement, including reasonable attorney fees, is not unusual. In defending against such a claim, a nonprevailing party may challenge whether the claims arose under the agreement, whether expenses incurred in related litigation in other courts merit reimbursement and whether the fees are reasonable in light of the comparable fees and rates of the nonprevailing party. Sometimes a question arises, where similar issues exist involving substantially similar contracts but different parties, of whether the court must allocate the fees among the separate parties. What is unusual is for all of these issues to be addressed in one opinion. The Court of Chancery's recent decision in ASB Allegiance Real Estate Fund v. Scion Breckenridge Managing Member , 2012 WL 3027351 (Del. Ch. July 9, 2012), does just that and provides important guidance to practitioners regarding the nature of a claim for breach of the implied covenant of good faith and fair dealing and enforcement of contractual fee-shifting provisions.

By Lewis H. Lazarus

8 minute read

February 15, 2012 | Delaware Business Court Insider

When a dissatisfied stockholder petitions the Court of Chancery for an appraisal of shares extinguished in a merger, the petitioner will have the burden of persuading the court of the fair value of those shares. When the holder owns preferred stock, valuation issues arise that do not pertain to the holders of common stock. That is because, unlike for common stockholders, preferred stockholders' rights, including to redemption and sometimes to valuation in the event of a merger, are spelled out contractually.

By Lewis H. Lazarus Special to the DBCI

5 minute read