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Delaware Business Court Insider

Chancery Enjoins Unfair Merger Orchestrated by Controlling Stockholder Pending Corrective Disclosures

Under Delaware law, majority or controlling stockholders owe fiduciary duties to the company and its minority stockholders. Under certain circumstances, however, a stockholder that owns less than 50 percent of the company's outstanding stock can be deemed a controlling stockholder and therefore subject to the same fiduciary obligations.
7 minute read

Delaware Business Court Insider

'Glidepath': Guidance for Extra-Contractual Principles in an Earn-Out Context

The Delaware Court of Chancery recently issued an opinion that provides guidance for the application of extra-contractual principles in an earn-out context, further stressing the importance of precise drafting of earn-out provisions.
8 minute read

Delaware Business Court Insider

Efforts Clauses Do Not Impose Duty to Warn and Notice Provisions Will Be Strictly Enforced

A recent decision by the Delaware Court of Chancery provides important guidance on two types of contractual provisions that routinely appear in complex purchase agreements—efforts clauses and notice provisions.
5 minute read

Delaware Business Court Insider

Serving Process on a Dissolved LLC

In a recent letter opinion, Tratado de Libre Commercio v. Splitcast Technology, C.A. No. 2019-0014-JRS (Del. Ch. March 6), Vice Chancellor Joseph Slights addressed the issue of how to perfect service upon a dissolved limited liability company (LLC).
6 minute read

Delaware Business Court Insider

Recent Decision Clarifies Safe Harbors in DGCL Section 144 for Board Action

This case is important for the clear guidance it provides for anyone who seeks to understand Section 144(a)'s safe harbors when one or more board members are conflicted in connection with a board vote.
5 minute read

Delaware Business Court Insider

Chancery Applies Flexible Approach to 'Line of Business' Test in Corporate Opportunities

Central to this post-trial opinion is his discussion regarding the contours of the “line of business” test and the need to apply the concept flexibly and sensibly when determining whether a corporation has an interest in a line of business.
8 minute read

Delaware Business Court Insider

Del. Courts Highlight Risk of 'Void' Provisions in Alternative Entity Agreements

These decisions highlight the powerful effect, and potentially unintended consequences, of using a “void” provision in the governing documents of Delaware alternative entities.
6 minute read

Delaware Business Court Insider

Chancery Denies Books-and-Records Inspection Due to Lack of 'Credible Suspicion'

Stockholders who seek to inspect the books and records of a Delaware corporation to investigate mismanagement merely have to demonstrate a “credible suspicion” that officers or directors have breached their fiduciary duties.
5 minute read

Delaware Business Court Insider

Expert or Arbitrator—Who Decides? Chancery Court Clarifies Issue in 'Ray Beyond'

The Delaware courts have been asked several times in the last few years to interpret contracting parties' intent when they have relegated certain disputes to “an expert, not an arbitrator” as a form of alternative dispute resolution.
5 minute read

Delaware Business Court Insider

Del. Supreme Court Finds Emails May Be Subject to Production in Books-and-Records Actions

Section 220 of the Delaware General Corporation Law permits a stockholder to inspect the books and records of a corporation, provided that the demand for inspection meets certain form and manner requirements, and the inspection is sought for a proper purpose—e.g., one reasonably related to the interests of stockholders.
5 minute read

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