Lewis Lazarus at Morris James LLP

Court of Chancery Holds Supermajority Vote Not Required for Nevada Reincorporation

Gunderson v. The Trade Desk Inc., C.A. No. 2024-1029-PAF (Del. Ch. Nov. 6, 2024) - The board of a Delaware corporation recommended that the corporation reincorporate as a Nevada corporation subject to a majority vote...more

4/25/2025 / Appeals , Board of Directors , Business Entities , Corporate Conversions , Corporate Governance , Delaware , Delaware General Corporation Law , Mergers , Shareholder Litigation , Shareholders

Court of Chancery Applies the American Rule and Denies Attorneys’ Fees Despite Fiduciary Breach

In re Straight Path Commc’ns Inc. Consol. S’holder Litig., C.A. No. 2017-0486-SG (Del. Ch. Oct. 29, 2024) - The Court of Chancery in this stockholder class action refused to award attorneys’ fees where the Court found the...more

4/25/2025 / Breach of Duty , Business Litigation , Controlling Stockholders , Corporate Governance , Damages , Delaware , Fiduciary Duty , Mergers , Shareholder Litigation

Chancery Dismisses Claims That a Merger Involved a Conflicted Controller but Allows Limited Discovery Into Alleged Disclosure...

Whether a party is a controlling stockholder in a conflicted transaction determines the standard of review. If a stockholder owns more than 50% of the voting shares and therefore can control the board, there is no question it...more

4/17/2025 / Acquisitions , Controlling Stockholders , Corporate Governance , Delaware General Corporation Law , Disclosure Requirements , Mergers , Motion to Dismiss , Shareholder Litigation , Summary Judgment

Delaware Supreme Court Affirms Chancery Decision in Section 225 Control Dispute

Ravindran v. Glas Trust Co. LLC, No. 463, 2023 (Del. Sept. 23, 2024) - In affirming the Court of Chancery’s determination in a Section 225 action that Timothy Pohl (“Pohl”) was the sole director and officer of a Delaware...more

3/21/2025 / Appeals , Board of Directors , Business Entities , Corporate Governance , Credit Agreements , Delaware , Fiduciary Duty , Forum Selection

Chancery Says Litigation Privilege No Shield Against LLC Interest Repurchase

Seva Holdings Inc. v. Octo Platform Equity Holdings, LLC, C.A. No. 2022-0437-PWR (Del. Ch. Aug. 29, 2024) - In deciding limited cross motions for summary judgment, the Court of Chancery held that the absolute litigation...more

2/26/2025 / Breach of Contract , Business Litigation , Contract Disputes , Contract Terms , Corporate Governance , Delaware , Dispute Resolution , Limited Liability Company (LLC) , Shareholders , Summary Judgment

Chancery Enforces Parties’ Agreement to Specific Enforcement for Breach of Preemptive Rights Provision

L-5 Healthcare Partners, LLC v. Alphatec Holdings, Inc., C.A. No. 2019-0412-NAC (Del. Ch. Aug. 21, 2024) - In this post-trial decision, the Court found specific performance was the appropriate remedy for a breach of a...more

2/6/2025 / Breach of Contract , Contract Terms , Corporate Governance , Securities Litigation , Securities Regulation , Shareholders

Delaware Supreme Court Upholds Court of Chancery’s Refusal to Blue Pencil an Unreasonable Covenant Not to Compete

In Sunder Energy v. Jackson, No. 455, 2023 (Del. Supr., December 10, 2024), the Delaware Supreme Court upheld the Delaware Court of Chancery’s decision not to enjoin a former employer and member of a Delaware LLC from...more

12/27/2024 / Contract Terms , Employer Liability Issues , Employment Contract , Non-Compete Agreements , Restrictive Covenants

Chancery Orders Dissolution of Single Asset LLC

Gibson v. Konick, C.A. No. 2022-1036-LWW (Del. Ch. July 10, 2024) - The Court of Chancery dissolved a single asset LLC even though the LLC agreement required a unanimous vote of the members to dissolve, and one of the two...more

12/13/2024 / Corporate Dissolution , Limited Liability Company (LLC) , LLC Agreements , Spouses

Chancery Enforces LLC Agreement in Prince Estate Dispute

McMillan v. Nelson, C.A. 2024-0016-KSJM (Del. Ch. July 5, 2024) - In a dispute over the management of Prince Legacy, LLC, an entity formed to manage assets from the estate of the late musician Prince, the Court of...more

12/10/2024 / Breach of Contract , Covenant of Good Faith and Fair Dealing , Implied Covenants , Limited Liability Company (LLC) , LLC Agreements

Chancery Requires Bond in Connection With Status Quo Order

Leon v. Orlando, C.A. No. 2024-0311-LWW (Del. Ch. June 5, 2024) - In an action to determine the rightful manager of a Delaware limited liability company (“the Company”), the Court of Chancery required plaintiff to post a...more

10/31/2024 / Limited Liability Company (LLC) , Share Transfer , Shareholders , Stock Prices

Chancery Breaks With Two Earlier Decisions, Finds That an Integration Clause Does Not Bar Fraud Claims Based on Expressions of...

Trifecta Multimedia Holdings Inc. v. WCG Clinical Services, C.A. No. 2023-0699-JTL (Del. Ch. June 10, 2024) - Sophisticated parties frequently include “anti-reliance” clauses in their transaction agreements, whereby one...more

10/31/2024 / Breach of Contract , Fraud , Implied Covenants , Misrepresentation , Motion to Dismiss

Court of Chancery Invalidates Election of Directors Where Board Improperly Set the Record Date

Sections 205 and 225 of the Delaware General Corporation Law facilitate prompt determinations of the validity of corporate actions. The former permits the Delaware Court of Chancery to validate defective corporate acts under...more

9/24/2024 / Board of Directors , Corporate Governance , Delaware General Corporation Law , Shareholders

Chancery Grants Motion to Dismiss Breach of Fiduciary Duty Claims Against Officers in Controlling Stockholder Transaction Subject...

Kormos v. Playtika Hldg. UK II Ltd., C.A. 2023-0396-SG (Del. Ch. May 3, 2024) - In this decision involving breach of fiduciary duty claims against two officers, the Court granted the individual defendants’ motions to...more

8/16/2024 / Board of Directors , Breach of Duty , Controlling Stockholders , Entire Fairness Standard , Fiduciary Duty , Mergers

Chancery Dismisses Derivative Action Based on Plaintiff’s Failure to Allege Particularized Facts Demonstrating Demand Futility

The power to bring a claim for breach of duty causing injury to a Delaware corporation resides with the board of directors. It is part of their duty under Section 141(a) of the Delaware General Corporation Law to manage the...more

5/15/2024 / Board of Directors , Breach of Duty , Demand Futility , Derivative Suit , Fiduciary Duty , Shareholder Litigation , Shareholders

Chancery Dismisses Caremark Action Based on Insufficient Allegations of Bad Faith

Clem v. Skinner, et al., C.A. 2021-0240-LWW (Del. Ch. Feb. 19, 2024) - This Caremark decision involved the retail pharmacy company, Walgreens, and concerned billing practices for a particular insulin pen product that gave...more

5/6/2024 / Board of Directors , Breach of Duty , Demand Futility , Derivative Suit , Fiduciary Duty , Shareholders

Chancery Invalidates Elon Musk’s $55.8 Billion Pay Package

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...more

4/26/2024 / Board of Directors , Breach of Duty , Derivative Suit , Fiduciary Duty , Shareholder Litigation , Shareholders

Chancery Decides Scope of Expert’s Authority in Valuation Dispute Resolution Mechanism

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...more

3/27/2024 / Breach of Contract , Contract Disputes , Contract Terms , Dispute Resolution

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

2023 Delaware Corporate and Commercial Case Law Year in Review

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...more

2/9/2024 / Board of Directors , Breach of Duty , Corporate Governance , Derivative Suit , Fiduciary Duty , Mergers , Shareholder Litigation , Shareholders

Chancery Concludes Accountant Provision in Stock Purchase Agreement Calls for Expert Determination Rather than Arbitration

ArchKey Intermediate Holdings Inc. v. Mona, C.A. No. 2021-0383-JTL (Del. Ch. Oct. 3, 2023) - Parties to a stock purchase agreement disputed post-closing price adjustments. The agreement called for an independent accountant...more

2/7/2024 / Breach of Contract , Breach of Duty , Fiduciary Duty , Shareholders , Stock Purchase Agreement

Chancery Denies Advancement for Director Suspected of Leaking Confidential Financial Information

Hoffman v. First Wave BioPharma, Inc., C.A. No. 2023-0097-MTZ (Del. Ch. September 27, 2023) - A company's board of directors suspected one of its members had leaked the company's financial information to a third party and...more

1/31/2024 / Breach of Duty , Fiduciary Duty , Indemnification , Shareholder Litigation

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

Lewis Lazarus

Morris James LLP

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