A parent company can be liable for tortiously interfering with the performance of a wholly owned subsidiary, the Delaware Court of Chancery has ruled. As a result, the court ordered a real estate company and its subsidiary to jointly pay $6 million in damages to real estate developers after ruling the parent forced the subsidiary to breach its implied obligations.
“Delaware’s respect for corporate separateness also means that Delaware maintains a role for tortious interference with contract even in the parent-subsidiary context,” said Vice Chancellor J. Travis Laster in NAMA Holdings v. Related WMC. “Delaware law rejects the theory that ‘a parent and its wholly owned subsidiaries constitute a single economic unit’ such that ‘a parent cannot be liable for interfering with the performance of a wholly owned subsidiary.’”
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