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May 12, 2024 | 
mondaq.com | Sarah Ennis |Albert Carroll
In re Oracle Corp. Deriv. Litig.,
C.A. No. 2017-0337-SG (Del. Ch. Dec. 28, 2023)
By rule, the prevailing party in Court of Chancery litigation is
entitled to shift costs to the losing party, subject to the
Court's discretion. Here, in an unordinary derivative action,
the Court declined to shift the costs of the prevailing individual
defendants to the derivative plaintiffs.
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May 12, 2024 | 
mondaq.com | Samuel Bashman |Albert Carroll |Albert Manwaring
Pilot Corp. v. Abel, C.A. No.
2023-0813-MTZ (Del. Ch. Dec. 13, 2023)
Here, the plaintiff claimed that the adoption of pushdown
accounting constituted a change to accounting rights that triggered
a right to consent under the relevant operating agreement. The
defendants asserted that the plaintiff had unclean hands because
the plaintiff had manipulated earnings to alter valuation of a put
right.
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May 12, 2024 | 
mondaq.com | Barnaby Grzaslewicz |Albert Carroll
Kaufman v. DNARx LLC, C.A.
No. 2022-0968-KSJM; C.A. No. 2022-0982-KSJM (Del. Ch. Dec. 29,
2023) (ORDER)
The Court of Chancery has broad power to address litigation
misconduct. This sanctions order arose out of litigation concerning
a loan to a start-up Delaware LLC in the medical research field. The litigation misconduct by the defendant LLC included lying,
destroying evidence, and ignoring numerous court orders.
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May 12, 2024 | 
mondaq.com | Sarah Ennis |Albert Carroll |Lewis H. Lazarus
Paul v. Rockpoint Group LLC, C.A.
2018-0907-JTL (Del. Ch. Jan. 29, 2024)
This dispute arose from a disagreement over the authority of an
appraiser to include legal assertions and extrinsic evidence in his
valuation. The underlying dispute stemmed from the departure of a
co-founder from a limited liability company. The parties' LLC
Agreement established a dispute resolution mechanism to determine
the value of the co-founder's share if a subsequent qualifying
transaction occurred.
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May 10, 2024 | 
mondaq.com | R. Eric Hacker |Aubrey J. Morin |Albert Carroll
In Re ProAssurance Corp. Stockholder Derivative
Litig., Consol. C.A. No. 2022-0034-LWW (Del. Ch.
Oct. 2, 2023)
Claims against corporate fiduciaries for breaches of the duty of
oversight are colloquially referred to as
"Caremark" claims.
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May 10, 2024 | 
mondaq.com | Albert Carroll |Bryan Townsend
In re Sears Hometown and Outlet Stores, Inc. S'holder
Litig., C.A. No. 2019-0798-JTL (Del. Ch. Jan. 24,
2024)
Here, a special committee of the board supported a plan to
liquidate the company's floundering business segment and
continue operating its more promising business segment. The
company's controlling stockholder opposed the plan and took
action to prevent its implementation. He first adopted a bylaw that
created hurdles to the plan's approval.
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May 10, 2024 | 
mondaq.com | R. Eric Hacker |Aubrey J. Morin |Albert Carroll
Segway Inc. v. Hong Cai, C.A. No.
2022-1110-LWW (Del. Ch. Ct. Dec. 14, 2023)
The Caremark doctrine recognizes the duty of oversight for
directors of Delaware corporations. Under In re McDonald's
Corp. Stockholder Derivative Litigation, 289 A.3d 343 (Del. Ch. Jan. 26, 2023), corporate officers, and not just directors, owe
a duty of oversight, at least within the scope of each
officer's responsibilities.
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May 2, 2024 | 
mondaq.com | Lewis H. Lazarus |Albert Manwaring |Albert Carroll |Aubrey J. Morin
This top ten list summarizes significant decisions of the
Delaware Supreme Court and the Delaware Court of Chancery over the
past calendar year. Our criteria for selection are that the
decision either meaningfully changed Delaware law or provided
clarity or guidance on issues relevant to corporate and commercial
transactions or litigation in Delaware.
We present the decisions in no particular order.
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Apr 25, 2024 | 
mondaq.com | Barnaby Grzaslewicz |Aubrey J. Morin |Albert Carroll
Whitestone REIT Operating
Partnership L.P. v. Pillarstone Capital REIT, C.A. No.
2022-0607-LWW (Del. Ch. Jan. 25, 2024)
In Delaware, the implied covenant of good faith and fair dealing is
inherent in all contracts and ensures that the "fruits of the
bargain" are not frustrated by arbitrary or unreasonable
action.
Here, under the governing partnership agreement, Whitestone, a
limited partner, had the unilateral right to redeem its partnership
units.
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Apr 25, 2024 | 
mondaq.com | Lewis H. Lazarus |Sarah Ennis |Albert Carroll
Tornetta v. Musk, et al.,
C.A. 2018-0408-KSJM (Del. Ch. Jan. 30, 2024)
Stockholders of Tesla, Inc. brought a derivative action against
Elon Musk and six individual Tesla directors, alleging that the
directors breached their fiduciary duties by awarding Musk
performance-based stock options in January 2018 with a potential
$55.8 billion maximum value and $2.6 billion grant date fair value.
