Eric Hacker at Morris James LLP

Chancery Denies Preliminary Injunction Against Nurse Practitioner Based Upon Overbroad Restrictive Covenants

FP UC Holdings, LLC v. Hamilton, C.A. No. 2019-1029-JRS (Del. Ch. Mar. 27, 2020). A party seeking a preliminary injunction must demonstrate a likelihood of success at trial....more

5/12/2020 / Contract Terms , Former Employee , Non-Compete Agreements , Preliminary Injunctions , Restrictive Covenants

Chancery Denies Non-Member, Non-Manager’s Bid for Equitable Dissolution of LLC

SolarReserve CSP Holdings, LLC v. Tonopah Solar Energy, LLC, C.A. 2019-0791-JRS (Del. Ch. Mar. 18, 2020). While the Court of Chancery has recognized the concept of equitable standing to seek judicial dissolution, this...more

4/24/2020 / Department of Energy (DOE) , Dissolution , Limited Liability Company (LLC) , Operating Agreements

Surveying the Law, Chancery Declines to Dismiss a Claim that a 35% Holder was the Controlling Stockholder of the Acquirer (as Well...

Voigt v Metcalf, C.A. No. 2018-0828-JTL (Del. Ch. Feb. 10, 2020). This decision contains an instructive review of the factors the Court of Chancery will examine to determine whether a minority stockholder may in fact be a...more

4/7/2020 / Breach of Duty , Controlling Stockholders , Fiduciary Duty , Mergers

Post-Closing Earn-Out Claims Dismissed, But Fiduciary Duty Claims Against Former Director Survive

Neurvana Medical, LLC v Balt USA, LLC, C.A. No. 2019-0034-KSJM (Del. Ch. Feb. 27, 2020). Neurvana Medical, LLC (“Neurvana”) sold a medical device to Balt USA, LLC (“Balt USA”), largely for post-closing consideration if the...more

4/7/2020 / Breach of Duty , Earn-Outs , Fiduciary Duty , Former Directors

Chancery Denies Fees to Stockholder who Compelled Admittedly-Overdue Annual Meeting, But Primarily for his Own Interest in Forcing...

Martin v. Harbor Diversified, Inc., C.A. 2018-0762 SG (Del. Ch. Feb. 5, 2020). A plaintiff who achieves a corporate benefit for the enterprise may be eligible for attorney’s fees, but he is not entitled them....more

4/7/2020 / Annual Meeting , Delaware General Corporation Law , Shareholders

Chancery Denies Attempt to Use Mediation Communications to Supplement Mediation Term Sheet

Starkman v. O’Rourke, C.A. 2018-0901-KSJM (Del. Ch. Jan. 14, 2019) (ORDER). Parties who resolve a case through a mediation conducted under Court of Chancery Rule 174 should include all material provisions in any mediation...more

2/18/2020 / Mediation , Settlement Agreements , Settlement Negotiations

Chancery Balances the Obligation to Defend an Arbitral Award from Collateral Attack with the Obligation to Defer to a Broad...

Gulf LNC Energy, LLC v. Eni USA Gas Marketing LLC, C.A. No. 2019-0460-AGB (Del. Ch. Dec. 30, 2019). Plaintiff (“Gulf”) invested over $1 billion to construct a facility designed to unload imported liquefied natural gas...more

1/24/2020 / Arbitration , Arbitration Awards , Breach of Contract , Negligent Misrepresentation

Chancery Addresses Pleading Standards for Caremark Claims

In re LendingClub Corp., Consol. C.A. No. 12984-VCM (Del. Ch. Oct. 31, 2019). Delaware law sets a high bar to sufficiently plead a Caremark claim for failure of board oversight, especially when the plaintiff must satisfy...more

12/6/2019 / Board of Directors , Breach of Duty , Caremark claim , Demand Futility , Fiduciary Duty , Pleading Standards

Chancery Denies Section 220 Bid for Executive Compensation Records Involving Facebook

Southeastern Pa. Trans. Auth. v. Facebook, Inc., C.A. No. 2019-0228-JRS (Oct. 29, 2019) - Shareholders of a Delaware corporation have a qualified right to access corporate books and records for a “proper purpose.” ...more

11/11/2019 / Books & Records , Business Judgment Rule , Duty of Loyalty , Executive Compensation , Facebook , Section 220 Request , Shareholder Litigation , Shareholders

Court of Chancery Clarifies a Plaintiff’s Ability to Bind a Non-Signatory to a Forum Selection Provision

Neurvana Medical, LLC v. Balt USA, LLC, C.A. No. 2019-0034-KSJM (Del. Ch. Sep. 18, 2019), reargument denied (Oct. 10, 2019). In Neurvana Medical, LLC v. Balt USA, LLC, the Court of Chancery declined to exercise personal...more

10/30/2019 / Forum Selection , Motion to Dismiss , Personal Jurisdiction , Purchase Agreement

Chancery Enforces Preferred Stock Consent Rights, and Reasons that Designee of a Corporate Stockholder Is an “Affiliate” of that...

PWP Xerion Holdings III LLC v. Red Leaf Resources Inc., C.A. No. 2017-0235-JTL (Del. Ch. Oct. 23, 2019). Preferred stockholders frequently obtain the right to veto specific types of transactions....more

10/25/2019 / Board of Directors , Fiduciary Duty , Preferred Shares , Shareholders

Delaware Superior Court Finds Purchase Agreement Language Limits the Scope of Possible Claims Concerning Earn-Out Dispute

Collab9, LLC v. En Pointe Technologies Sales, LLC, C.A. No. N16C-12-032 (MMJ) (CCLD) (Del. Super. Sept. 17, 2019). Under an asset purchase agreement (“APA”), the purchaser (“PCM”) acquired substantially all of the assets...more

10/17/2019 / Asset Purchase Agreements , Breach of Contract , Breach of Implied Contract , Earn-Outs , Fraud , Motion to Dismiss

Chancery Explains When Deal Price is a Persuasive Indicator of Fair Price in an Appraisal Proceeding

In re Appraisal of Stillwater Mining Co., Consol. C.A. No. 2017-0385-JTL (Del. Ch. Aug. 21, 2019). Recent Delaware Supreme Court decisions on appraisal proceedings have stressed the pivotal importance of the deal price in...more

9/18/2019 / Appraisal , Deal Price , Fair Market Value , Mergers , Stock Prices

Chancery Explains the Rule “Equity will not Enjoin a Libel” – and its Limited Exception

Preston Hollow Capital LLC v. Nuveen LLC, C.A. No. 2019-0169-SG (Del. Ch. Aug. 13, 2019). The Court of Chancery in several recent decisions has addressed the limited circumstances in which it may have jurisdiction to...more

9/5/2019 / Defamation , Free Speech , Injunctions , Libel

CCLD Holds that D&O Policy’s Duty to Defend “Securities Claims” Extends to Appraisal Proceedings under 8 Del. C. § 262

CCLD Holds that D&O Policy’s Duty to Defend “Securities Claims” Extends to Appraisal Proceedings under 8 Del. C. § 262, that Pre-Judgment Interest on an Appraisal Award May be a Covered “Loss” and that a Breach of...more

8/14/2019 / Appraisal , Appraisal Awards , D&O Insurance , Duty to Defend , Insurance Industry

Chancery Dismisses Merger Challenge Concerning Board’s Delegation of Merger Negotiations and Management’s Undisclosed Compensation...

In re Towers Watson & Co. Stockholder Litigation, C.A. No. 2018-0132-KSJM (Del. Ch. July 25, 2019). The ultimate responsibility for considering a merger falls on the board to carry out consistent with each directors’...more

8/6/2019 / Board of Directors , Breach of Duty , Business Judgment Rule , Fiduciary Duty , Mergers , Shareholder Litigation , Shareholders

Chancery Holds Tension Between “Bespoke” Provision Governing Post-Closing Conduct and a Boilerplate Survival Clause Requires...

Dolan v. Altice USA, Inc., C.A. No. 2018-0651-JRS (Del. Ch. Jun. 27, 2019). The founders of Cablevision Systems Corp., the Dolan family, in connection with a $17.7 billion acquisition of that entity by Altice Europe N.V....more

7/17/2019 / Breach of Contract , Declaratory Rulings , Merger Agreements , Mergers

Advancement Available for Post-Separation Misuse of Confidential Information Obtained “By Reason of the Fact” of Corporate Service

Ephrat v. medCPU, Inc., C.A. No. 2018-0852-MTZ (Del. Ch. Jun. 26, 2019). Former directors and officers may be entitled to advancement for post-separation conduct if that conduct is "by reason of the fact" of the directors'...more

7/10/2019 / Advancement , Breach of Contract , Confidential Information , Directors , Former Directors

Officer and Director Entitled to Mandatory Indemnification Regardless of Circuitous Path to Victory

Brown v. Rite Aid Corporation, C.A. No. 2017-0480-MTZ (Del. Ch. May 24, 2019). Even when an indemnitee takes a circuitous path to victory, the indemnitee is entitled to indemnification under 8 Del. C. § 145(c) for...more

7/3/2019 / Board of Directors , Breach of Duty , Fiduciary Duty , Indemnification , Motion for Summary Judgment , Motion to Dismiss

Delaware Supreme Court Revives Fiduciary Duty Claims in Derivative Lawsuit Concerning Blue Bell’s Listeria Outbreak

Marchand v. Barnhill, No. 533, 2018 (Del. June 19, 2019). As this decision illustrates, while Delaware law imposes a high bar for pleading demand futility and fiduciary oversight claims under what is known as a Caremark...more

7/3/2019 / Blue Bell Creameries , Board of Directors , Breach of Duty , Caremark claim , Demand Futility , Derivative Suit , Fiduciary Duty , Shareholders

Merger Agreement’s Preservation of Privilege for Pre-Merger Communications Found to be Adequate, Notwithstanding that the...

Shareholder Representative Services LLC v. RSI Holdco, LLC, C.A. No. 2018-0517-KSJM (Del. Ch. May 29, 2019). This decision confirms that, in a post-merger dispute between an acquirer and the selling stockholders, broad...more

7/3/2019 / Attorney-Client Privilege , Merger Agreements , Mergers , Privileged Communication , Shareholders

Chancery Address Valuation Issues Arising From LLC Member’s Withdrawal

Smith v. Promontory Financial Group, LLC, C.A. No. 11255-VCG (Del. Ch. April 30, 2019). In the limited liability company context, LLC agreements sometimes provide for a buyout of a member deciding to withdraw its...more

5/10/2019 / Directors , Letters of Intent , LLC Agreements , Valuation

Eric Hacker

Morris James LLP

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