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Delaware Business Court Insider

Court of Chancery Examines Director's Personal Relationship in Dismissing Duty of Loyalty Claim

Vice Chancellor Sam Glasscock III considered whether a personal relationship between an independent director and a conflicted director was sufficient to corrupt the independent director's loyalty in approving a cash only freeze-out merger.
7 minute read

Delaware Business Court Insider

Court of Chancery Holds 'Corwin' Inapplicable to Claims Governed by 'Unocal' Standard

In In re Edgio Stockholders Litigation, the Delaware Chancery Court was asked to apply the same cleansing effect to a claim for injunctive relief analyzed under Unocal, but Vice Chancellor Morgan Zurn found that Corwin was inapplicable.
6 minute read

Delaware Business Court Insider

Recent Complaint Unsuccessfully Challenged 'Standard Plain Vanilla' Rights Plan

In Building Trades Pension Fund of Western Pennsylvania v. Desktop Metal, a stockholder plaintiff brought derivative claims against Desktop Metal, Inc., alleging that a provision of the company's rights plan, which was adopted in connection with a proposed merger transaction, impermissibly chilled the free exercise of stockholder voting with respect to the merger agreement at an upcoming stockholder meeting.
6 minute read

Delaware Business Court Insider

The Delaware Rapid Arbitration Act: Prompt, Cost-Effective, Efficient and Underutilized

Delaware has a tool, and it remains underutilized: the Delaware Rapid Arbitration Act. The DRAA provides a structure for quick, streamlined and confidential arbitration.
7 minute read

Delaware Business Court Insider

Difference in Political Beliefs Is Not a Proper Purpose for Section 220 Action

The right of a shareholder to demand to inspect a company's books and records may be an important tool but it is not without limits. In a recent decision involving The Walt Disney Co. (Disney), the Delaware Court of Chancery reminded one litigant that disagreement over business decisions, including decisions about a company's position on social issues, is not a proper basis for a shareholder action under Section 220.
5 minute read

Delaware Business Court Insider

Covenant Not to Sue for Loyalty Breaches in an Agreement Among Stockholders May Operate Within the Space for Fiduciary Tailoring

In New Enterprise Associates 14. v. Rich, the Delaware Court of Chancery ruled that a covenant not to sue for breach of fiduciary duties in connection with the exercise of a drag-along provision to approve a merger or sale contained in a voting agreement among sophisticated stockholders in a Delaware general corporation was not facially invalid.
4 minute read

Delaware Business Court Insider

Court of Chancery Address Scope of Privilege Concerning Third-Parties

In this stockholder derivative action, the plaintiff claimed that the defendants—members of Tesla's board of directors—breached their fiduciary duties by awarding themselves excessive and unfair compensation between 2017 and 2020.
8 minute read

Delaware Business Court Insider

Chancery Cautions Against Overzealous Redactions in Books and Records Productions

In Ontario Provincial Council of Carpenters' Pension Trust Fund v. Walton, Vice Chancellor Laster mostly denied motions to dismiss claims against officers and directors of Walmart for allegedly causing Walmart to fail to comply with the Controlled Substances Act and a settlement between it and the DEA related to Walmart's handling of opioid prescriptions.
7 minute read

Delaware Business Court Insider

Chancery Holds Covenants Not to Sue for Breach of Fiduciary Duty Are Enforceable Only in Part

The court reasoned that Delaware law permits such covenants, subject to two ifs and one but—and declined to dismiss, reasoning that the covenant at issue was valid but that plaintiffs had adequately pleaded intentional fiduciary misconduct.
8 minute read

Delaware Business Court Insider

Supreme Court Affirms Decision That the SolarCity Acquisition was Entirely Fair

Writing for the court en banc, Justice Karen L. Valihura explained why the stockholder-plaintiffs' arguments did not undermine the Court of Chancery's conclusions as to either "fair dealing" or "fair price."
5 minute read

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