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Chancery Denies Specific Performance in De-SPAC Transaction Based on Difficulty of Enforcement and Plaintiff’s Inequitable Conduct

26 Capital Acquisition Corp. v. Tiger Resort Asia Ltd., CA No. 2023-0128-JTL (Del. Ch. September 7, 2023) - Even where the parties have contractually agreed that specific performance is the preferred remedy for a breach,...more

Chancery Refuses to Enforce Nationwide Noncompete

Centurion Service Group, LLC v. Wilensky, C.A. No. 2023-0422-MTZ (Del. Ch. Aug. 31, 2023) - In Frontline Techs Parent LLC v. Murphy, C.A. 2023-0546-LWW (Del. Ch. Aug. 23, 2023), the Court of Chancery recently declined a...more

Chancery Limits Section 220 Books-and-Records Production to Formal Board Materials

In re Zendesk, Inc. Section 220 Litigation, C.A. No. 2023-0454-BWD (Del. Ch. Aug. 25, 2023) - The background of this books-and-records decision involved a failed acquisition, a strategic review, a proxy contest, and a...more

Chancery Upholds Claims Against LLC Officers and Others Arising from Squeeze-Out of Minority Unitholders

Cygnus Opportunity Fund, LLC v. Washington Prime Group, LLC, C.A. No. 2022-0718-JTL (Del. Ch. Aug. 9, 2023) - An Indiana corporation reorganized via bankruptcy into a Delaware LLC, and a senior note holder negotiated for...more

Chancery Finds Defendants Liable for Fraud Based on the Failure to Disclose Internal Billing Practices

NetApp Inc. v. Cinelli, C.A. No. 2020-1000-LWW (Del. Ch. Aug. 2, 2023) - This decision arose out of the sale of the company Cloud Jumper to NetApp, Inc. The seller’s management had been recording internal software use as...more

Chancery Finds Non-Compete Unenforceable by Subsidiaries Unless Identified in Agreement

Frontline Techs. Parent, LLC v. Murphy, C.A. No. 2023-0546-LWW (Del. Ch. Aug. 23, 2023) - This non-compete decision reminds drafters to pay careful attention to scope and definitions, in particular language covering the...more

Chancery Finds Member Breached LLC Agreement in Unilaterally Dissolving the Company

VH5 Capital, LLC v. Jeremiah Rabe, C.A. No. 2020-0315-NAC (Del. Ch. June 30, 2023) - The at-issue LLC had two members – the defendant and the plaintiff, both of whom also constituted the company's board. The company never...more

Controlling Stockholder Avoids Liability Despite Overreach Into Special Committee Brokered-Settlement

Triggering Delaware’s entire fairness review in stockholder litigation was once considered outcome determinate, but that view has waned. Numerous decisions have shown that defendants can overcome the unified fair process and...more

Chancery Finds Derivative Plaintiffs Breached Duties in Withholding Arbitration Award of the Company

Optimiscorp v. Atkins, C.A. No. 2020-0183-MTZ (Del. Ch. June 1, 2023) - As this decision explains, when stockholder plaintiffs control the derivative claims of the company, they serve as agents of the company and owe the...more

Chancery Determines That Former Executives Are Not Entitled to Equity Awards Under Separation Agreement

SeaWorld Entm't, Inc. v. Andrews, C.A. No. 2020-0955-NAC (Del. Ch. May 19, 2023) - SeaWorld Entertainment, Inc. granted unvested equity awards to employees. Pursuant to equity agreements, the awards would vest if the...more

Superior Court Declines to Dismiss Counterclaims Based on “Interrelated Wrongful Act” Clause in D&O Coverage Dispute Arising Out...

National Amusements Inc. v. Endurance American Specialty Insurance Co. (Del. Super. April 28, 2023) - In this D&O insurance coverage dispute, the plaintiffs moved to dismiss the defendant insurers' counterclaims, which...more

Following Flawed Business Acquisition, Chancery Dismisses Derivative Complaint for Failure to Plead Demand Futility

City of Coral Springs Police Officers' Pension Plan v. Dorsey, C.A. No. 2022-0091-KSJM (Del. Ch. May 9, 2023) - A terrible business decision does not ensure the Court of Chancery will sustain a derivative claim. A...more

Entire Fairness Standard Applied to Transaction Benefitting Controllers of Controllers

Tueza v. Lindon, C.A. No. 2022-0130-SG (Del. Ch. Apr. 27, 2023) - Because controlling stockholders of Delaware corporations owe fiduciary duties to both the corporation and to its minority stockholders, the Court of...more

Chancery Relies on Unanimous Dictionary Entries To Confirm Unambiguity of Supply Agreement

Thermo Fisher Scientific PSG Corp. v. Arranta Bio MA, LLC, C.A. No. 2022-0608-NAC (Del. Ch. Apr. 4, 2023) - The plaintiff and the defendant entered into a supply agreement under which the defendant would manufacture...more

Chancery Rules That Separate Accrual Periods Apply to an Information Systems Caremark Claim in Walmart Opioid Litigation

Ontario Provincial Council of Carpenters' Pension Trust Fund v. Walton, C.A. No. 2021-0827-JTL (Del. Ch. Apr. 12, 2023) - To determine the limitations period under laches, a court must determine when a claim accrued....more

Chancery Court Again Applies Entire Fairness to Claims Challenging SPAC Transaction

Laidlaw v. GigAcquisitions2, LLC, C.A. No. 2021-0821-LWW (Del. Ch. Mar. 1, 2023) - In the aftermath of a SPAC merger, the plaintiff (a public stockholder) brought claims for breaches of fiduciary duty against the SPAC's...more

Plaintiff Overcomes Rule 23.1 In Walmart Opioids Litigation Based In Part On Over-Redacted Documents In Books And Records...

Ontario Provincial Council of Carpenters’ Pension Trust Fund v. Walton, C.A. No. 2021-0827-JTL (Del. Ch. Apr. 26, 2023) - To assert a derivative claim, a stockholder plaintiff must plead demand futility. The plaintiffs...more

Chancery Finds Restrictive Covenant in Stock Purchase Agreement is Unreasonable and Unenforceable

Intertek Testing Servs. NA, Inc., C.A. No 2022-0853-LWW (Del. Ch. Mar. 16, 2023) - Delaware courts do not mechanically enforce non-competes. Instead, the non-compete must be reasonable in scope and duration and advance a...more

Chancery Holds That Party’s Untimely Counterclaim Cannot Avoid Laches Defense By Invocation of Unclean Hands

Thomas D. Murray et al. v. Shannon Rolquin et al., C.A. No 2018-0819-KSJM (Del. Ch. Mar. 9, 2023) - In the Court of Chancery, untimely equitable claims may be time-barred by the doctrine of laches. However, a belated...more

Chancery Declines to Modify Status Quo Order to Allow Partial Performance of Pending Settlement

In re AMC Entertainment Holdings, Inc. Stockholder Litigation, Consol. C.A. No. 2023-0215-MTZ (Del. Ch. Apr. 5, 2023) - In various contexts, upon request or stipulation, the Court of Chancery will impose status quo orders,...more

Chancery Dismisses Oversight Claim Based on Board’s Response to Red Flags

In re McDonald's Corp. Stockholder Derivative Litig., CA No. 2021-0324-JTL (Del. Ch. March 1, 2023) - A plaintiff can plead an oversight claim against a board by alleging particularized facts to support an inference that...more

Chancery Rules That Moving Situs of Trust to Delaware Supports Personal Jurisdiction Under the State’s Long-Arm Statute

Harris v. Harris, C.A. No. 2019-0736-JTL (Del. Ch. Jan. 12, 2023) - Three children filed suit against their mother and her associates, alleging they had seized control of a family-owned corporation and engaged in...more

Chancery Examines Director’s Personal Ties and Dismisses Duty of Loyalty Claim

In re Orbit/FR, Inc. S’holders Litig., C.A. No. 2018-0340-SG (Jan. 24, 2023) - This decision involved a stockholder challenge to a merger between Orbit and its controller, Microwave Vision....more

Delaware Supreme Court Affirms Delaware Choice-of-Law Ruling In Dismissal of D&O Liability Insurance Coverage Dispute

Stillwater Mining Company v. National Union Fire Insurance Company of Pittsburgh, PA et al., No. 24, 2022 (Del. Jan. 12, 2023) - This decision from Delaware Supreme Court addresses choice-of-law questions for D&O insurance...more

Chancery Denies Motion to Dismiss Finding Primedia Argument Inapplicable

In Re Orbit/FR, Inc. Stockholders Litig., C.A. No. 2018-0340-SG (Del. Ch. January 9, 2023) - In In re Primedia, Inc. S’holders Litig., 67 A.3d 455 (Del. Ch. 2013), the Court examined whether a litigation asset being...more

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