Justia Delaware Court of Chancery Opinion Summaries

This action arose from a technology-sharing relationship between plaintiffs and defendant where plaintiffs brought suit against defendant in January 2009 for, among other things, breach of contract based on defendant's alleged failure to perform its end of a bargain the parties had struck. Both parties filed cross motions for summary judgment. Having considered the parties' extensive submissions and their presentations at the argument held on March 1, 2011, the court decided to deny both motions because numerous issues of material fact remained in dispute. Nonetheless, the court made several summary judgment findings pursuant to Federal Rule of Civil Procedure 56(d) regarding certain discrete issues where the facts were without substantial controversy. View "Petroplast Petrofisa Plasticos S.A. v. Ameron Int'l Corp." on Justia Law

Plaintiffs, former shareholders and the representative and attorney-in-fact for all shareholders of Kinexus Corporation (Kinexus), commenced this action asserting claims against Advent Software, Inc. (Advent) for breach of contract and unjust enrichment arising out of a December 31, 2001 agreement entered into by Advent to acquire Kinexus. Advent subsequently moved to dismiss the action because of Kinexus' failure to prosecute and Advent argued that dismissal with prejudice was appropriate under Court of Chancery Rules 41(b) and 41(e). The court held that Advent's motion to dismiss for failure to prosecute was denied where the court was not convinced that these circumstances necessitated dismissal because of the court's preference for resolving cases on the merits and because Kinexus appeared to have renewed their efforts to diligently prosecute the matter. Accordingly, counsel were requested to confer and to promptly submit a case scheduling order so that discovery could be completed and a trial date could be established. View "Kinexus Representative LLC v. Advent Software, Inc." on Justia Law

Defendant Lockheed Martin Corporation d/b/a Lockheed Martin STS-Orlando (LMSTS) moved to bifurcate this action into a "Contract Interpretation Phase" and a "Damages Phase," and both LMSTS and plaintiff BAE Systems Information and Electronic System Integration Inc. (BAE) filed motions to compel. The court endorsed bifurcation where the litigation was indisputably complex and where both parties agreed, in principle, that bifurcation would be appropriate and have reached a substantial agreement regarding the issues to be determined during each phase of the action. Accordingly, the action was bifurcated into a "Contract Interpretation Phase" and a "Damages Phase." The court noted that bifurcation of the action effectively postponed the parties' need for much of the discovery they have requested. Accordingly, the court granted in part and denied in part BAE's and LMSTS' motions to compel. Finally, the court denied each party's request for attorneys fees because both BAE and LMST had good faith grounds for the positions taken. View "BAE Sys. Info. and Electonic Sys. Integration Inc. v. Lockheed Martin Corp." on Justia Law

This case arose when Del Monte Foods Company announced that it had agreed to be acquired by a consortium of Kohlberg Kravis Roberts & Co. L.P., Vestar Capital Partners, and Centerview Partners (collectively, Sponsors). A number of familiar entrepreneurial plaintiffs' firms filed putative class actions challenging the merger. Plaintiffs subsequently sought an interim award of attorneys' fees and expenses for causing defendants to issue supplemental disclosures and obtaining a preliminary injunction. The court held that the application for an interim fee award was granted with respect to benefits conferred by the Proxy Supplement. For those benefits, Lead Counsel was awarded fees and expenses of $2.75 million. Therefore, the court held that the application was otherwise denied without prejudice and could be renewed at a later time. View "In re Del Monte Foods Co. Shareholders Litigation" on Justia Law

This lawsuit stemmed from a failed venture between OverDrive, Inc. (OverDrive), a leader in the field of digital media distribution, and Baker & Taylor, Inc. (Baker & Taylor), a leading distributor of physical media, where OverDrive alleged numerous claims against Baker & Taylor contending that Baker & Taylor breached its exclusive distribution agreement with OverDrive and that it was disclosing OverDrive's proprietary trade secrets and confidential information. The court held that OverDrive's conversion, fraud, and "Breach of Contract - Exclusivity and Non-Compete Provisions" claims survived, as did OverDrive's claims for misappropriation of trade secrets and "Breach of Contract - Confidentiality Obligations", which were not challenged in this motion. The court held, however, that all other counts in OverDrive's complaint were dismissed. View "Overdrive, Inc. v. Baker & Taylor, Inc." on Justia Law

This case involved a stockholder challenge to the decision of two funds within the Vanguard mutual fund complex to purchase shares of allegedly illegal foreign online gambling businesses that were publicly traded in overseas capital markets. Plaintiffs' complaint asserted both derivative and direct claims based on their allegations that defendants' actions constituted a violation of their fiduciary duties, negligence, and waste. Defendants moved to dismiss the complaint on the grounds that the court could not assert personal jurisdiction over the individual defendants named in the complaint; all plaintiffs' claims were derivative in nature and therefore, the complaint must be dismissed for plaintiffs' failure to make demand on the board of trustees or demonstrate why a demand would be futile; and the complaint failed to state a claim. The court granted defendants' motions and dismissed with prejudice all of the claims in the complaint based on the first two grounds. Consequently, the court did not address defendants' additional argument that the complaint failed to state a claim. View "Hartsel, et al. v. The Vanguard Group, Inc., et al." on Justia Law

This action was before the court on a motion to expedite regarding a transaction in which a Delaware limited partnership was to be acquired for either cash or a combination of cash and the acquirer's stock. Plaintiff-unitholders of the target claim that the process undertaken by the conflicts committee was deficient and therefore, legally ineffective because it failed to consider the fairness of payments made to certain conflicted parties and the independence of the conflicts committee members was tainted by a grant of unvested phantom units they received shortly before merger discussion began. Plaintiffs also contended that the directors failed to provide adequate disclosures to enable the unitholders to make an informed decision as to whether to vote for the transaction. Plaintiffs also asserted that they will suffer irreparable harm if prompt equitable relief was not granted because the general partner of the target was controlled by three allegedly single-purpose entities whose sole assets were their interests in the general partner. As a result, plaintiffs asserted that these entities would become empty shells unless they were prevented from distributing the consideration they received in the transaction. The court held that plaintiffs have shown that at least one of their claims was colorable but plaintiffs' allegations were simply to speculative to support the required showing of irreparable harm. Accordingly, the court denied plaintiffs' motion to expedite. View "In Re K-Sea Transp. Partners L.P. Unitholders Litigation" on Justia Law

Plaintiffs, limited partners of Cencom Cable Income Partnership, L.P. ("Partnership"), sued defendants over the appraisal and sale of nine cable systems. In this post-trial memorandum opinion, the court addressed not only the import of the disclosures that a certain law firm, which had been retained to assure that plaintiffs' rights would be protected, had been retained to assure that the process would be "fair" to plaintiffs, but also plaintiffs' other challenges, including primarily whether the general partner manipulated to its benefit the process by which the partnership assets were valued and sold and whether approval by the limited partners of the sales process, which established a price and provided for interest on that amount following a date certain until distribution of the sales proceeds, acted to deprive plaintiffs of the right to any quarterly distributions following the start of the period during which interest would be paid. The court held that the appraisal and sale process did not deny plaintiffs the benefit of their bargain. Under the circumstances, it was fair and, to the extent that certain obligations were not precisely met, plaintiffs were not damaged. Accordingly, the court held that defendants were entitled to the entry of judgment in their favor and the dismissal of the action. View "In re Cencom Cable Income Partners, L.P." on Justia Law

Plaintiff moved to enjoin the annual stockholders meeting of defendant, which was currently scheduled for June 6, 2011 ("2011 Meeting") and sought declaratory relief regarding the timeliness of shareholder proposals for the 2011 Meeting and the scope of defendant's rights plan ("Poison Pill") as it related to shareholder communications. Plaintiff contended that defendant and its board of directors have "erected significant and unreasonable barriers to shareholder action," and have used the Poison Pill "as a cudgel to chill intra-shareholder dialogue." The court held that, turning to a balance of the equities, because plaintiff had failed to demonstrate reasonable probability of success on any of his claims and because the injury he complained of appeared to be minimal and, perhaps, largely theoretical, the balance tipped in favor of defendant. Accordingly, plaintiff's motion for a preliminary injunction was denied.View "Goggin v. Vermillion, Inc., et al." on Justia Law

Plaintiffs, stockholders in Massey Energy Company ("Massey"), a coal mining corporation with a controversial reputation, sought a preliminary injunction against a Merger Agreement with a mining company, with a good reputation and track record for miner safety and regulatory compliance, because the Massey Board did not negotiate to have the pending "Derivative Claims" transferred into a litigation trust for the exclusive benefit of Massey stockholders. The court held that plaintiffs had not proven that the Merger's consummation presented them with a threat of irreparable harm and therefore, denied plaintiffs' motion for preliminary injunction. View "In Re Massey Energy Co. " on Justia Law