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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

Delaware Business Court Insider

Employee's Double Dealing Lands Him in Serious Legal Trouble

In a recent decision, Metro Storage International, v. Harron, C.A. No. 2018-0937-JTL (Del. Ch. May 4, 2022), the Delaware Court of Chancery made clear that executives who engage in double dealing will pay a high price for their bad acts.
5 minute read

Delaware Business Court Insider

The Relevance of Commercial Reality in Interpreting Charters and Bylaws

Where a literal reading yields a result at odds with what the drafters would have reasonably intended (which itself derives from the commercial context evidenced in plain terms throughout the instrument), literal meaning gives way to a more nuanced "objective" meaning. This article explores the application of this key precept in the interpretation of charters and bylaws.
7 minute read

Delaware Business Court Insider

Wither Pompeia: 'Diep v. Trimaran Pollo Partners'

Delaware Supreme Court affirms dismissal on SLC's motion, refusing to apply "Caesar's Wife" standard of "above reproach" to multi-member SLCs.
8 minute read

Delaware Business Court Insider

What Litigators Need to Know About the Amendments to Section 102(b)(7)

The Delaware legislature has passed a bill to amend Section 102(b)(7) of the General Corporation Law of the State of Delaware to alter the scope of monetary liability for officers of Delaware corporations. Specifically, the amendments extend the opportunity for Delaware corporations to exculpate their officers, in addition to their directors, for monetary liability for certain breaches of fiduciary duty.
10 minute read

Delaware Business Court Insider

Chancery Lacks Jurisdiction to Award Damages for an Improvidently Entered Injunction in the Absence of a Bond

Can the Delaware Court of Chancery award damages to a defendant who was improperly enjoined by an order that dispensed with the need for a bond because of the parties' prior contractual waiver that a bond be required?
7 minute read

Delaware Business Court Insider

'Known' Creditors Can Pursue Untimely Claims in Any Venue

The U.S. Bankruptcy Court for the District of Delaware declared on July 14 that creditors known to debtors prior to filing for Chapter 11 bankruptcy that did not receive actual notice of the bankruptcy cases may pursue claims in the venue of their choice.
3 minute read

Delaware Business Court Insider

Application of a Voting Limitation in the Company's Charter to Invalidate Stockholder Votes in a Proxy Contest Was Improper

When director actions affect an election of directors or a stockholder vote on matters of corporate control, the board's actions must satisfy enhanced scrutiny under the legal test set forth in Blasius Industries v. Atlas.
4 minute read

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