Glasscock Blocks Appeal in DuPont's Bid to Keep Under Seal Lawsuit Over Corporate Spinoff
The ruling, issued late last week by Vice Chancellor Sam Glasscock III, could clear the way for Chemours' 65-page complaint against DuPont to be made public.
June 11, 2019 at 04:27 PM
3 minute read
A Delaware Chancery Court judge has denied DuPont's request to appeal an earlier decision that ordered the unsealing of a lawsuit filed by chemical manufacturer The Chemours Co. over its spinoff from the Delaware chemical giant in 2015.
The ruling, issued late last week by Vice Chancellor Sam Glasscock III, could clear the way for Chemours' 65-page complaint against DuPont to be made public. Until now, the filing has remained almost completely redacted, though supplemental filings indicate that the suit seeks “substantial relief relating to a spin-off transaction.”
DuPont's attorneys have argued that the dispute was subject to a provision of the separation agreement that mandated confidential arbitration and warranted keeping the complaint under wraps pending a motion to dismiss.
Glasscock rejected that argument during a bench ruling May 23, but delayed compliance to allow DuPont to apply for interlocutory appeal, which would have sent the issue directly to the state's five Supreme Court justices.
According to court documents, DuPont argued in its application that prior Chancery Court decisions differed on whether an agreement requiring confidential arbitration “constitutes good cause for confidential treatment of a complaint pending resolution of a motion to dismiss for lack of subject matter jurisdiction.”
On Friday, Glasscock said that DuPont had “erroneously” framed the question they wanted to appeal. Instead, he denied DuPont's application under a Chancery Court rule, which presumes that all cases are to be litigated in public, unless the parties involved can show the public interest is outweighed by a “discrete confidential interest.”
“Specifically, the defendants seek review of a finding that the parties, having failed to comply with the rule, must litigate in public, consistent with the '[g]eneral principal of public access' provided in Rule 5.1(a),” Glasscock wrote in a 9-page letter opinion. “I do not find on balance that the interests of justice weigh in favor of interlocutory appeal.”
Counsel for Chemours declined to comment, and an attorney for DuPont was not immediately available to comment.
DuPont spun off its chemical performance unit in 2015, as it pursued a merger with Midland, Michigan-based Dow Chemical Co. The companies officially announced the tie-up that December, in what firm leaders touted as an “all-stock merger of equals,” which split the combined firm into three publicly traded companies for agriculture, material science and specialty products.
The new company, named DowDuPont Inc., maintains dual headquarters in Wilmington and Midland.
Chemours filed its eight-count complaint against DuPont in May 13. The lawsuit also names as defendants DowDuPont and Corteva, DowDuPont's former agricultural division, which was spun off earlier this year into an independent, publicly traded company.
Chemours is represented by Joel Friedlander, Jeffrey Gorris, Cristopher Foulds and Cristopher P. Quinn of Friedlander & Gorris.
The defendants are represented by Robert S. Saunders, Jennifer C. Voss, Arthur R. Bookout and Jessica R. Kunz of Skadden, Arps, Slate, Meagher & Flom.
The case is captioned Chemours v. DowDuPont.
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