Bryan Townsend on Board of Directors

Chancery Clarifies Controlling Stockholder Fiduciary Duties in Sears Litigation

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...more

4/4/2024 / Board of Directors , Breach of Duty , Controlling Stockholders , Fiduciary Duty , Shareholder Litigation

Chancery Dismisses Double-Derivative Claims for Failure To Plead Demand Futility

City of Hialeah Emps. Ret. Sys. v. Insight Venture Partners, C.A. No. 2022-0846-MTZ (Del. Ch. Dec. 28, 2023) - A venture capital fund invested in two different entities. One of the entities then acquired the other. In the...more

3/20/2024 / Board of Directors , Breach of Duty , Demand Futility , Derivative Suit , Fiduciary Duty , Shareholder Litigation

Chancery Holds that LLC Agreement Did Not Confer Jurisdiction Over Contract and Tort Claims

Ramco Asset Mgmt. LLC v. USA Rare Earth, LLC, C.A. No. 2022-0665-SG (Del. Ch. Oct. 20, 2023) - Plaintiffs brought claims alleging improper dilution of their equity interests when transferring their holdings in an...more

2/9/2024 / Board of Directors , Breach of Duty , Fiduciary Duty , Shareholder Litigation , Shareholders

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

1/2/2024 / Board of Directors , Breach of Duty , Contract Terms , Fiduciary Duty , Limited Liability Company (LLC) , Mergers

Chancery Approves Revised Class Action Settlement After Denying Initial Proposal Due to Overly Broad Release

In re AMC Entm't Holdings, Inc. S'holder Litig., Consol. C.A. No. 2023-0215-MTZ (Del. Ch. July 21, 2023) - In re AMC Entm't Holdings, Inc. S'holder Litig., Consol. C.A. No. 2023-0215-MTZ (Del. Ch. Aug. 11, 2023) - The...more

12/11/2023 / Board of Directors , Breach of Duty , Class Action , Class Action Settlement , Fiduciary Duty

Chancery Rejects Declining-Percentage Method, Awards $266.7 Million in Attorneys’ Fees for $1 Billion Class Action Settlement

In re Dell Techs. Inc. Class V S'holders Litig., C.A. No. 2018-0816-JTL (Del. Ch. July 31, 2023, revised Aug. 22, 2023) - Stockholders filed class actions in the Court of Chancery challenging the terms of a redemption of a...more

12/11/2023 / Board of Directors , Breach of Duty , Class Action , Derivative Suit , Fiduciary Duty , Shareholders

Chancery Approves Reduced Fee Award for Derivative Settlement Based on Therapeutic Benefits

Sciabacucchi v. Howley, C.A. No. 2021-0938-LWW (Del. Ch. July 3, 2023) - A stockholder filed a derivative action alleging breach of fiduciary duty and unjust enrichment in connection with a board compensation committee’s...more

11/10/2023 / Board of Directors , Breach of Duty , Derivative Suit , Fiduciary Duty , Shareholder Litigation

Chancery Grants Single-Member Special Litigation Committee’s Motion To Terminate Derivative Claims

In re Baker Hughes, a GE Company, Derivative Litigation, C.A. No. 2019-0201-LWW (Del. Ch. Apr. 17, 2023) - After the Court of Chancery made a pleadings stage determination that the demand was futile, a board of directors...more

9/20/2023 / Board of Directors , Breach of Duty , Derivative Suit , Fiduciary Duty , Shareholder Litigation , Shareholders

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

5/4/2023 / Board of Directors , Breach of Contract , Breach of Duty , Fiduciary Duty , Personal Jurisdiction

Chancery Determines Divorcee Was One Share Short of Equal Ownership Needed To Avoid Removal from Leadership of Business Empire

Haart v. Scaglia, C.A. No. 2022-0145-MTZ (Del. Ch. Aug. 4, 2022) - In public, a high-powered couple presented themselves as equal owners of an operating company, of which the wife was also the CEO and a director....more

11/16/2022 / Board of Directors , Breach of Duty , Fiduciary Duty , Shareholders

Chancery Dismisses Claims Alleging Directors Approved Spring-Loaded Stock Options Before Press Releases on COVID-19 Vaccine...

In re Vaxart, Inc. S’holder Litig., Consol. C.A. No. 2020-0767-PAF (Del. Ch. June 3, 2022) - A small biotechnology company issued a press release that connected the company to the federal government’s Operation Warp Speed...more

11/15/2022 / Board of Directors , Breach of Duty , Fiduciary Duty , Shareholder Litigation , Shareholders

Chancery Dismisses Contract, Dissolution, and Direct Claims, But Upholds Derivative Claim for Alleged Transfer of Funds Between...

BET FRX LLC v. Myers, C.A. No. 2019-0894-KSJM (Del. Ch. Apr. 27, 2022) - A minority member of a limited liability company had invested $8 million in the LLC. The LLC owned a majority interest in an entity that held a...more

10/4/2022 / Board of Directors , Breach of Duty , Derivative Suit , Dissolution , Fiduciary Duty

Chancery Finds AT&T Failed to Satisfy Entire Fairness Review in a Freeze-Out of Minority Partners in Local Spectrum Partnership

In re Cellular Telephone P’ship Litig., Coordinated C.A. No. 6885-VCL (Del. Ch. Mar. 9, 2022) - A controller that stands on both sides of a freeze-out transaction has the burden to prove that its acquisition was entirely...more

8/26/2022 / Board of Directors , Breach of Duty , Fiduciary Duty , Partnerships , Shareholders

Chancery Revived a Dismissed Claim after Discovery Revealed a Desire for Liquidity that Resulted in a Divergent Interest in M&A...

In re Mindbody, Inc., S’holder Litig., Cons. C.A. No. 2019-0442-KSJM (Del. Ch. Dec. 9, 2021) - A desire for liquidity can result in a divergent interest sufficient to plead fiduciary duty claims against a defendant...more

3/9/2022 / Board of Directors , Breach of Duty , Fiduciary Duty , Motion to Dismiss

Delaware Supreme Court Overrules Gentile, Resolving Tension in Legal Test To Determine Whether a Claim Is Direct or Derivative

Brookfield Asset Mgmt., Inc. v. Rosson, No. 406, 2020 (Del. Sept. 20, 2021) - Seeking to bring clarity to the issue of whether a claim is direct or derivative—a potentially outcome-determinative issue—the Delaware Supreme...more

12/17/2021 / Board of Directors , Breach of Duty , Derivative Suit , Fiduciary Duty , Shareholders

Applying Plain Contract Language, Chancery Awards $147 Million in Damages to Start-Up Company for Breach of Joint Venture...

Symbiont.io, Inc. v. Ipreo Hldgs., LLC, C.A. No. 2019-0407-JTL (Del. Ch. Aug. 13, 2021) - Delaware is a pro-contractarian state. When fashioning an award for a breach of contract, a Delaware court can consider: (1) the...more

10/14/2021 / Board of Directors , Breach of Contract , Joint Venture , Non-Compete Agreements

Chancery Confirms Operation of Savings Statute and Tortious Interference Framework in Dispute Involving Fiduciaries with Competing...

Skye Mineral Invs., LLC v. DXS Capital (U.S.) Ltd., C.A. No. 2018-0059-JRS (Del. Ch. July 28, 2021) - Delaware’s savings statute—10 Del. C. § 8118(a)—protects claims from being time-barred where they were timely brought in...more

9/10/2021 / Board of Directors , Breach of Duty , Fiduciary Duty , Statute of Limitations

Chancery Sustains Claims Against Target’s CEO, Target’s Financial Advisor, and Acquirer for Allegedly Covertly Steering Merger...

Firefighters’ Pension System of The City of Kansas City, Missouri Trust v. Presidio, Inc., C.A. No. 2019-0839-JTL (Del. Ch. Jan. 29, 2021) Presidio illustrates potential pitfalls for parties in the M&A process, including...more

2/26/2021 / Board of Directors , Breach of Duty , Business Judgment Rule , Controlling Stockholders , Duty of Loyalty , Fiduciary Duty

Chancery Declines to Order Specific Performance of $5.8 Billion Luxury Hotel Deal Scuttled by COVID-19 Changes to Hotel Business...

AB Stable VIII LLC v. MAPS Hotels and Resorts One LLC, C.A. No. 2020-0310-JTL (Del. Ch. Nov. 30, 2020) - Parties to a sale and purchase agreement (“SPA”) had planned to close a deal to sell fifteen luxury hotels for $5.8...more

1/22/2021 / Board of Directors , Breach of Contract , Mergers , Shareholders

Chancery Sustains CEO’s Contract Claims in WeWork Litigation

In re WeWork Litig., Consol. C.A. No. 2020-0258-AGB (Del. Ch. Oct. 30, 2020). A company facing a liquidity crisis (the shared working space company, WeWork), its outgoing CEO (Adam Nuemann), and two related SoftBank...more

12/23/2020 / Board of Directors , Breach of Contract , Breach of Duty , CEOs , Fiduciary Duty , Shareholders

Court of Chancery Dismisses Aiding and Abetting Claim Against NetSuite’s Fiduciaries for Role in Alleged Overpayment by Oracle

In re Oracle Corp. Derivative Litig, Consol. C.A. No. 2017-0337-SG (Del. Ch. June 22, 2020) - At the pleadings stage, a claim for aiding and abetting a breach of fiduciary duty requires that it is reasonably conceivable...more

8/4/2020 / Acquisitions , Aiding and Abetting , Board of Directors , Breach of Duty , Fiduciary Duty

Court of Chancery Sustains Aiding-and-Abetting Breach of Fiduciary Duty Claim Against Financial Advisor Based on its Conflicts of...

Morrison v. Berry, C.A. No. 12808-VCG (Del. Ch. June 1, 2020) - Even if fiduciary duty of care claims against a target company’s board of directors are exculpated, an aiding-and-abetting claim against a financial advisor...more

7/21/2020 / Aiding and Abetting , Board of Directors , Breach of Duty , Fiduciary Duty , Going-Private Transactions

Chancery Finds Proper Purpose in Books and Records Demand to Investigate Potential Wrongdoing in CBS-Viacom Merger, Orders...

Bucks Cty. Employees Ret. Fund v. CBS Corp., C.A. No. 2019-0820-JRS (Del. Ch. Nov. 25, 2019). A stockholder seeking books and records in Delaware states a proper purpose for inspection by demonstrating a credible basis to...more

12/11/2019 / Board of Directors , Books & Records , Breach of Duty , Fiduciary Duty , Section 220 Request , Shareholder Litigation , Shareholders

Chancery Finds “Constellation” of Personal and Professional Relations Between Directors and Controlling Stockholder Excuses Demand

In re BGC Partners, Inc. Derivative Litig., Consol. C.A. No. 2018-0722-AGB (Del. Ch. Sept. 30, 2019). A stockholder plaintiff seeking to bring a derivative claim on behalf of a corporation must first demand authorization...more

10/17/2019 / Board of Directors , Breach of Duty , Controlling Stockholders , Demand Futility , Derivative Suit , Fiduciary Duty , Shareholder Litigation

Court of Chancery Finds Agreements Unenforceable for Lack of Assent, Dismisses Remaining Claims for Lack of Personal Jurisdiction

Eagle Force Holdings, LLC v. Campbell, C.A. No. 10803-VCMR (Del. Ch. Aug. 29, 2019). Parties to a contract must provide evidence of an overt manifestation of assent for a contract to be enforceable under Delaware law....more

10/4/2019 / Board of Directors , Breach of Contract , Breach of Duty , Fiduciary Duty , LLC Agreements

Bryan Townsend

Morris James LLP

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