Appeal of Delaware Court of Chancery Ruling on Ouster of CEO by Board

Appeal of Delaware Court of Chancery Ruling on Ouster of CEO by Board

 Klaassen v. Allegro Dev. Corp. et al., No. 8626, 2013 (Del. Ch. Nov. 7, 2013) [an enhanced version of this opinion is available to lexis.com subscribers].

This Chancery decision is the subject of an appeal to the Delaware Supreme Court. Among the issues to be addressed is whether the actions of a board to dismiss the CEO, who also had voting power over a controlling percentage of shares, are void — as compared to voidable?

The trial court opinion considering a motion for a stay pending appeal provides a mini-treatise on the Delaware law applicable to notice requirements for board meetings and the consequences of ineffective notice. The opinion is also must-reading for anyone interested in the proper approach to contests for control among warring factions of dissident directors and competing shareholder groups.

 The first brief was recently filed in the expedited appeal to the Delaware Supreme Court.

Frank Reynolds of Thomson Reuters provides a helpful summary in his article on the case.

The initial post-trial opinion, issued prior to the most recent opinion addressing the issues raised in the motion for stay pending appeal, is styled as: Klaassen v. Allegro Dev. Corp. et al., 2013 Del. Ch. LEXIS 247, No. 8626, (Del. Ch. Oct. 11, 2013) [enhanced version]

 Read more Delaware business litigation case summaries and commentary on Delaware Corporate and Commercial Litigation Blog, a blog hosted by Francis G.X. Pileggi, of Eckert Seamans. 

For more information about LexisNexis products and solutions connect with us through our corporate site.