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Capella Holding, Inc. v. Anderson, C.A. No. 9809-VCN (Del. Ch. July 8, 2015), is a Delaware Court of Chancery decision that addresses recurring corporate litigation issues that make it a useful addition to the litigator’s toolbox (even as a duplicate), for the businesslike manner in which it treats the perennial fact pattern of a co-founder and former officer/director who was both unceremoniously ousted from the company he brought into the world, and as a parting insult, they diluted his ownership interest. His claims were presented as counterclaims [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance].
A classic duty of loyalty claim involves self-interested conduct, and a good faith claim (also under the loyalty umbrella) arises “where corporate directors have no conflicting self-interest in a decision, yet engage in misconduct that is more culpable than simple inattention or failure to be informed.” As a general matter, directors are presumed to make business decisions “on an informed basis, in good faith and in the honest belief that the action taken [i]s in the best interests of the company.” Even when entire fairness scrutiny would otherwise seem to apply, a plaintiff must first “make factual allegations in its complaint that, if proved, would establish that the challenged transactions are not entirely fair” to state a claim. (footnotes omitted.)
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.
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