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Delaware Business Court Insider

The Requirements of Equitable Fraud as a Basis for Chancery Court Jurisdiction

The distinction between legal and equitable fraud is not always clearly drawn, yet subject matter jurisdiction in the Delaware Court of Chancery can depend on it.
6 minute read

Delaware Business Court Insider

Shareholders May Challenge Fair Value for Fractional Interests Under Limited Circumstances

In Samuels v. CCUR Holdings, C.A. No. 2021-0358-PAF (Del. Ch. May 31, 2022), the Delaware Court of Chancery found that a shareholder may challenge the fair value of a payment for a fractional interest in a company under Section 155(2) of the Delaware General Corporation Law (DGCL).
4 minute read

Delaware Business Court Insider

Chancery Decision Reaffirms 2 Principles of Del. Alternative Entity and Contract Law

Vice Chancellor Lori Will's recent post-trial decision in Avgiris Brothers v. Bouikidis is a useful reminder of the benefits of a well-drafted LLC agreement and reaffirmed two bedrock principles of Delaware alternative entity and contract law—parties are given wide latitude to order their affairs through a LLC agreement and that Delaware courts will strictly construe the language of those agreements.
6 minute read

Delaware Business Court Insider

Court Upholds Garnishment of Beneficiary's Interest in Distributions From a Del. Statutory Trust

In Protech Minerals v. Dugout Team, No. 288, 2021, 2022 WL 4004606 (Del. Sept. 2, 2022), the Delaware Supreme Court affirmed that trust distributions are personal property subject to garnishment. The court declined to consider whether the result would be different if the trust were a spendthrift trust.
7 minute read

Delaware Business Court Insider

Chancery Reinforces Del. Law's 'Twice-Tested' Review When Invalidating Board Action Designed to Disenfranchise Stockholders

Unless specifically authorized by Delaware's General Corporate Law (DGCL), the contents of a corporation's charter do not displace directors' fiduciary obligations or override the court's "enhanced scrutiny" review for transactions implicating shareholders' sacrosanct voting rights.
6 minute read

Delaware Business Court Insider

Ruling in 'RC JRV Trust' a Reminder for Practitioners to Obtain, Properly Serve a Summons

Recently, in RC JRV Trust v. Barnes & Thornburg (In re JRV Group USA), No. 19-11095 (KBO), 2022 WL 3646288, at *1 (D. Del. Aug. 24, 2022), the U.S. District Court for the District of Delaware granted, in part, a motion for leave to appeal an interlocutory order of the U.S. Bankruptcy Court for the District of Delaware filed by the defendant, Barnes & Thornburg.
8 minute read

Delaware Business Court Insider

Unintended Consequences of Russia-Ukraine Sanctions: Blocked Del. Entities With Russian Co-Founders

The practical effect is that many businesses that should not be subject to the sanctions programs are prevented from operating until they either complete a lengthy appeals process or government agencies clarify their interpretation of the applicable sanctions.
7 minute read

Delaware Business Court Insider

New Officer Exculpation Amendment Poised to Significantly Impact Del. Corporations

We would expect incorporators and their counsel to consider including officer exculpation in the certificates of incorporation of newly formed companies and the directors and stockholders of existing Delaware corporations to consider whether it is in their best interests to amend their certificate of incorporation to provide for these newly available officer liability protections.
6 minute read

Delaware Business Court Insider

Chancery Finds Defendants Post-Trial Proved Fairness of Controlling Stockholder Transaction

When 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.
5 minute read

Delaware Business Court Insider

Bankruptcy Code Preempts LLC Act's Statute of Repose for Recovery of Distributions

In Miller v. Black Diamond Capital Management (In re Bayou Steel BD Holdings), Adv. Pro. No. 21-51013 (KBO), 2022 WL 3079861 (Bankr. D. Del. Aug. 3, 2022), U.S. Bankruptcy Judge Karen B. Owens held that Delaware's three-year statute of repose on the liability of a member for distributions from a limited liability company, measured from the date of distribution, was preempted by Section 546 of the Bankruptcy Code.
7 minute read

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