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Section 220 Demand Granted for Investigation of Subsidiary

Oklahoma Firefighters’ Pension & Retirement System v. Citigroup, Inc ., C.A. No. 9587-ML (VCN) (Del. Ch. Apr. 24, 2015) [ an enhanced version of this opinion is available to lexis.com subscribers ]. This Delaware Court of Chancery opinion allowed an inspection of books and records pursuant...

Creditor’s Fiduciary Duty Claims Proceed Based on Traditional Insolvency Test

Quadrant Structured Products Company, Ltd. v. Vertin , C.A. No. 6990-VCL (Del. Ch. May 4, 2015) [ an enhanced version of this opinion is available to lexis.com subscribers ]. This Court of Chancery opinion is destined to be cited as a seminal ruling for its historical and doctrinal analysis of important...

Wal-Mart Saga Ends in Delaware; Plaintiff Loses Bid for More Section 220 Documents

As Frank Reynolds of Thomson Reuters reports, the long-running effort of a stockholder to obtain additional documents from Wal-Mart in a Section 220 proceeding appears to have reached a conclusion , though it may still be the subject of second appeal. Frank Reynolds reports that the Court of Chancery...

Creditors’ Rights to Pursue Derivative Claims Against Company Directors Under Delaware Law

In a detailed May 4, 2015 opinion ( here ), Vice Chancellor Travis Laster of the Delaware Chancery Court extensively reviewed the rights of an insolvent company’s creditors to pursue derivative claims against the company’s directors [ an enhanced version of this opinion is available to lexis...

Delaware Supreme Court Trims Independent Directors’ Potential Liabilities in M&A Transactions

On May 14, 2015, in a landmark ruling with important implications for the potential liabilities of independent directors of companies involved in M&A transactions, the Delaware Supreme Court held that in order to state a claim for damages against directors of a company that has an exculpatory provision...

Delaware Jury Awards $100 Million In Boston Scientific Pelvic Mesh Injury Case

WILMINGTON, Del. — (Mealey’s) A Delaware state court jury on May 28 awarded $100 million to a woman who says she was injured by pelvic mesh devices made by Boston Scientific Corp. ( Deborah A. Barba v. John C. Carlson, D.O., et al. , No. N11C-08-050, Del. Super., New Castle Co.). According...

Domestic Violence Discrimination

A bill pending in the Delaware legislature would expand the state’s anti-discrimination statute. House Bill 4 would prohibit discrimination on the basis of domestic violence, sexual offense, or stalking. If passed, the bill would have important implications for Delaware employers. Here’s...

“Dead Hand Proxy Puts” Garner Increased Stockholder Scrutiny In Delaware

by John Stigi , John Landry and Robin Achen A ruling last fall by the Delaware Chancery Court has prompted a wave of 8 Del. C. § 220 [ an annotated version of this statute is available to lexis.com subscribers ] books and records inspection demands on (and threatened litigation against) Delaware...

Delaware Legislature Passes Fee-Shifting Bylaw Prohibition — What Questions Remain?

In a late night session on June 11, 2015, the Delaware House of Representatives overwhelmingly passed S.B. 75, which prohibits Delaware stock corporations from adopting “loser pays” fee-shifting bylaws and which confirms that Delaware corporations may adopt bylaws designating Delaware courts...

Delaware Supreme Court Addresses Direct v. Derivative Claim in Contractual Context

NAF Holdings, LLC v. Li & Fung (Trading) Limited , Del. Supr., No. 641, 2014 (Del. June 24, 2015) [ an enhanced version of this opinion is available to lexis.com subscribers ] [ Lexis Advance version ]. This Delaware Supreme Court decision held that a party has a direct claim to pursue a breach...

Delaware Court of Chancery Addresses Dilution Claims

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...

Delaware Supreme Court Reinforces Importance of Clear and Precise Bylaw Provisions and Specifically Drafted Notices of Annual Meetings

by John Stigi In Hill International, Inc. v. Opportunity Partners L.P. , No. 305, 2015, 2015 Del. LEXIS 322 (Del. July 2, 2015), the Delaware Supreme Court affirmed the Court of Chancery’s grant of injunctive relief as it recognized the plaintiff stockholder’s — as opposed to defendant...

Delaware neighboring states map with Capitals

Advancement Claim Addressed in Receivership Context

The Delaware Court of Chancery opinion in Andrikopoulos v. Silicon Valley Innovation Company, LLC, C.A. No. 9899-VCP (Del. Ch. July 30, 2015), addressed the priority of an advancement claim in the context of a receivership under Delaware law [subscribers can access an enhanced version of this opinion...

So Why Should Delaware Corporate Law Predominate?

One feature of the U.S. corporate law environment that always strikes outside observers and new initiates as odd is the predominance on the legal landscape of the law of Delaware. The tiny Eastern seaboard state is the second smallest U.S. state by size; only five states are smaller by population, yet...

Delaware Court of Chancery Invalidates Attempt of Majority Stockholder to Appoint Officers

In Gorman v. Salamone, C.A. No. 10183-VCN (Del. Ch. July 31, 2015), the Court of Chancery affirms the board-centric foundation of Delaware corporate law, and describes the limitation on the ability of a majority stockholder to appoint officers directly–even though a majority stockholder might have...

Should Nevada Be the New Preferred Forum? (That’s Right, Nevada.)

As I noted in a recent post , when the Wall Street Journal has a front-page article asking the question whether Delaware’s claim as the preferred home jurisdiction for many U.S. corporations continues to be warranted, it might be time to wonder whether Delaware’s preeminence might actually...

Delaware Court of Chancery Declines to Allocate Expert Expenses in Advancement Action

In the third ruling by the Court of Chancery in the advancement action styled Holley v. Nipro Diagnostics, Inc., C.A. No. 9679-VCP (Del. Ch. Aug. 14, 2015), the court addressed a request that expenses for third-party vendors of nearly $300,000 be allocated between a criminal action in which the former...

A Look at the Modern Business Judgment Rule

Under time-honored standards, and as developed over time by Delaware’s court, the business judgment rule is, as is often stated, a “presumption that in making a business decision, the directors of a company have acted on an informed basis, in good faith, and in the honest belief that the...

Delaware Court of Chancery Appoints Custodian to Break Deadlock of Profitable Corporation

In re: Shawe & Elting LLC , C.A. No. 9661-CB (Del. Ch. Aug. 13, 2015) [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance ]. There are many important principles of Delaware corporate law addressed in this 104-page post-trial opinion, but for the benefit of busy...

Rare Rejection of Advancement Claim

In the recent Chancery decision of Lieberman v. Electrolytic Ozone, Inc., C.A. No. 10152-VCN (Del. Ch. Aug. 31, 2015), the court rejected claims for advancement by former officers and directors who sought to have their former company pay for the attorneys’ fees they incurred in defending a suit...

Delaware Court of Chancery Strikes Impertinent Portion of Complaint

In Carlyle Investment L.L.C. v. Moonmouth Company S.A ., C.A. No. 7841-VCP (Del. Ch. Sept. 10, 2015), the Delaware Court of Chancery grants the rare motion to strike a part of the complaint that the court considers scandalous or impertinent pursuant to Court of Chancery Rule 12(f). See Slip op. at 45...

Somewhat Rare Denial of Advancement Claim in the Delaware Court of Chancery

In a rare denial of a claim for advancement, the Delaware Court of Chancery in the opinion styled Charney v. American Apparel, Inc. , C.A. No. 11098-CB (Del. Ch., Sept. 11, 2015), rejected the claims by a former chairman and CEO (and founder), based on the provisions for advancement in the company’s...

Delaware Court of Chancery to Be Less Likely to Approve Fees in Disclosure Only Cases

In re Riverbed Technology, Inc., Stockholders Litigation , Cons. C.A. No. 10484-VCG (Del. Ch. Sept. 17, 2015) [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance ]. This Delaware Court of Chancery opinion is noteworthy because it provides notice to corporate litigators...