Court of Chancery Clarifies Rights of Minority Shareholders Whose Equity is Diluted: Francis Pileggi and Kevin Brady Discuss Dubroff v. Wren Holdings and Chancery's Confidential Arbitrarion Procedures

Francis G.X. Pileggi, Member-in-Charge of Eckert Seamans, and Kevin F. Brady of Connolly Bove Lodge & Hutz discuss the Delaware Court of Chancery's opinion in Dubroff v. Wren Holdings LLC.  The issues addressed in the opinion include: (i) whether and when a minority shareholder's claim for breach of fiduciary duty against a control group based on equity dilution is a direct or derivative claim; (ii) whether a disclosure claim regarding a recapitalization plan can proceed despite alleged "inquiry notice" or alleged ratification via a stockholders agreement; (iii) whether the conspiracy theory of jurisdiction applied to several defendants; as well as (iv) unjust enrichment; (v) whether the statute of limitations for individual claims by members of a class action is tolled while the class action is pending; (vi) motions to intervene and consolidate; and (vii) motions to dismiss on several bases, including lack of continuous ownership.  Also discussed is a recent lawsuit challenging the confidential arbitration procedures in the Delaware Court of Chancery.