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This matter involved the use by the City of Lewes, the State, and others of a former industrial park transferred to the State and held as open space. Plaintiff brought three actions contesting that use. The only issues remaining were whether a 2014 council meeting was in compliance with the Freedom of Information Act (FOIA) and, if not, what remedy was available. The Court of Chancery granted summary judgment in favor of the City Council of Lewes and denied Plaintiff’s motion, holding that the 2014 meeting did not frustrate the intent of FOIA and that no effective remedy could ensue from a decision that the 2014 meeting was non-FOIA compliant. View "Lechliter v. Delaware Department of Natural Resources and Environmental Control" on Justia Law

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Plaintiffs filed an amended stockholder derivative complaint alleging that the Qualcomm Inc. board’s knowing disregard for “red flags” resulted in violations of the Foreign Corrupt Practices Act and a U.S. Securities and Exchange Commission cease-and-desist order. Defendants filed a motion to dismiss under County of Chancery Rule 23.1 for failure to make a demand or allege that demand would be futile. The Court of Chancery granted Defendants’ motion to dismiss under Rule 23.1, holding that the complaint failed to allege demand futility as to count one for breach of fiduciary duty claim for improper oversight, count two for waste against the individual defendants, and count three for unjust enrichment against the individual defendants. View "In re Qualcomm Inc. FCPA Stockholder Derivative Litigation" on Justia Law

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Organovo Holdings, Inc. (the Company) filed suit against Georgie Dimitrov, asserting claims for, inter alia, libel, negligence, and tortious interference with prospective economic advantage. The complaint also sought an injunction. The Court of Chancery ultimately held that Dimitrov had defaulted. Before this court had entered a final order, Dimitrov entered a limited appearance and moved to vacate the default judgment, arguing that the court lacked subject matter jurisdiction over the dispute. The Court of Chancery granted the motion to vacate the default judgment, holding that the court lacked subject matter jurisdiction over the complaint because none of the complaint’s claims were equitable claims, and none of the equitable remedies that the Company cited supported the existence of jurisdiction in this court. View "Organovo Holdings, Inc. v. Dimitrov" on Justia Law

Posted in: Personal Injury

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At dispute in this case was whether Plaintiff, a preferred stockholder of Federal National Mortgage Association (Fannie Mae), had a right to inspect Fannie Mae’s books and records. The Court of Chancery granted Fannie Mae’s motion to dismiss under Court of Chancery Rule 12(b)(6) for failure to state a claim because a previous judgment from the Eastern District of Virginia was preclusive on the issue of whether section 4617(b)(2)(A)(i) of the Housing and Economic Recovery Act of 2008 (HERA) transferred the stockholder right to seek books and records to the Federal Housing Finance Agency (FHFA). View "Pagliara v. Federal National Mortgage Association" on Justia Law

Posted in: Business Law

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Plaintiffs in this case were residents of Red Clay who were unable to access the polls during a special election held by Red Clay Consolidated School District in February 2015. In the election, residents were asked to approve an increase in the school-related property taxes paid by owners of non-exempt real estate located within the district. Red Clay prevailed in the special election, but Plaintiffs claimed electoral misconduct. The Court of Chancery declared that Red Clay violated the Elections Clause of the Delaware Constitution but did not award any greater relief because the violations did not warrant invalidating the special election. The court reached this result through a balancing of factors, including the dysfunction in Delaware’s system for funding public schools, which led to Red Clay facing a significant deficit without a favorable vote. View "Young v. Red Clay Consolidated School District" on Justia Law

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United BioSource LLC (UBC) and Bracket Holding Corp. entered into a securities purchase agreement (SPA) pursuant to which Bracket purchased all equity interests and ownership interests in three subsidiaries of UBC, including P-Star Acquisition Co. Section 2.6(e) of the SPA governed the handling of certain tax refunds relating to pre-closing periods that may be received after the transaction’s closing. UBC later filed this complaint asserting a claim for specific performance. The complaint asserted that Bracket breached section 2.6(e) of the SPA by failing to forward a Pennsylvania tax refund to UBC within fifteen days of P-Star’s receipt of the refund. The Court of Chancery granted UBC’s motion for summary judgment seeking an order requiring Bracket to immediately forward the tax refund to UBC, holding that UBC clearly established that Bracket breached section 2.6 of the EPA based on undisputed facts, and Bracket’s affirmative defenses failed as a matter of law. View "United BioSource LLC v. Bracket Holding Corp." on Justia Law

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The operative complaint in this case stemmed from the 2010 explosion that occurred at Massey Energy Company’s Upper Big Branch coal mine in West Virginia and asserted two claims against fourteen former Massey directors and officers for breach of fiduciary duties. The disaster led to Massey entering into a merger agreement with Alpha Natural Resources, Inc. in 2011. Plaintiffs moved for a preliminary injunction against the proposed merger, but the motion for preliminary injunction was denied. The Massey-Alpha merger subsequently closed, and for the next five years the action was stayed. In 2016, the Court of Chancery was asked to decide motions to dismiss filed by Defendants. The Court of Chancery dismissed both claims, (1) Plaintiffs’ putative derivative claim must be dismissed because Plaintiffs lost standing to pursue the claim under Delaware law that stockholders of Delaware corporations who transfer their shares as a result of a merger lose standing to litigate the derivative claims; and (2) Plaintiffs’ putative direct claim must be dismissed because it is, in reality, a derivative claim. View "In re Massey Energy Co. Derivative & Class Action Litigation" on Justia Law

Posted in: Business Law

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T.J. Rodgers served on Cypress Semiconductor Corporation a demand to inspect certain books and records under 8 Del. C. 220. Rodgers founded Cypress, served as its president and CEO for thirty-four years, and beneficially owned approximately 2.35 percent of Cypress’ outstanding common stock. Rodgers asserted that his primary purpose for seeking inspection of the demanded materials was to investigate possible mismanagement. Cypress agreed to provide Rodgers certain requested materials but otherwise denied the demand. Rodgers then filed a complaint to compel the production of the books and records requested in his demand. The Court of Chancery entered judgment in Rodgers’ favor, holding that Rodgers established a proper purpose for his demand. View "T.J. Rodgers v. Cypress Semiconductor Corp." on Justia Law

Posted in: Business Law

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Plaintiffs brought this action to obtain advancement of legal fees to which they were allegedly entitled pursuant to an LLC agreement of Empire Merchants, LLC. Plaintiffs were defendants in a separate action brought by Empire in the United State District Court of the Eastern District of New York. Empire filed a motion to dismiss this action under Court of Chancery Rule 12(b)(3) for improper venue and Court of Chancery Rule 12(b)(6) for failure to state a claim. The Court of Chancery granted the motion to dismiss, holding that Plaintiffs’ complaint must be dismissed under Rule 12(b)(3) for improper venue based on the clear and unambiguous language of the forum selection provision contained in the LLC agreement. View "Merinoff v. Empire Merchants, LLC" on Justia Law

Posted in: Civil Procedure

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The three underlying legal actions, involving breach of contract, breach of fiduciary duty, stock valuation, bankruptcy, and appeals, took place in Illinois. Plaintiffs, including attorneys involved in the underlying actions, sought to indemnification in post-trial proceedings. Defendant is a Delaware corporation with offices in Illinois. The Delaware Court of Chancery awarded plaintiffs $79,540.14 for pursuing the post-trial action and $241,492.50 for the Illinois proceedings, plus 20% of the expenses they incurred enforcing their indemnification right through this proceeding. The court cited the corporations’ bylaws, under which the plaintiffs are entitled to mandatory if indemnification would be permitted under the Delaware General Corporation Law and Section 145(a) of that law. View "Dore v. Sweports Ltd." on Justia Law