Justia Delaware Court of Chancery Opinion Summaries

This action arose out of the proposed open merger of OPENLANE with Riley, wholly-owned subsidiary of ADESA which in turn, was a wholly-owned subsidiary of KAR (KAR and, together with Riley and ADESA, collectively, the "Purchasing Entities" or "KAR"). Plaintiff brought a class action on behalf of himself and all other public shareholders of OPENLANE and sought to enjoin preliminarily the merger. The court held that a balancing of the equities did not tilt toward enjoining the transaction. Accordingly, the motion for a preliminary injunction was denied. View "In re OPENLANE, Inc. Shareholders Litigation" on Justia Law

Plaintiff, individually and as trustee of the Peter R. Brinckerhoff Revocable Trust, was the holder of limited partnership units (LP units) of Enbridge Energy Partners, L.P. (the Partnership). Plaintiff, both derivatively, on behalf of the Partnership, and directly, on behalf of the public holders of the Partnership LP units, brought various claims against defendants. Defendants subsequently moved to dismiss all of plaintiff's claims. The court held that Count I was dismissed because plaintiff failed to plead facts suggesting that defendants acted in bad faith; Count II and IV were dismissed for failure to state a claim; and Count III was dismissed because plaintiff could not plead an implied covenant claim. View "Brinckerhoff v. Enbridge Energy Co., Inc., et al." on Justia Law

Plaintiff, a former shareholder of infoGroup, Inc., brought its Second Amended Class Action complaint asserting, on behalf of themselves and their fellow former shareholders, that the merger of infoGroup into a subsidiary of CCMP Capital Advisors, pursuant to an agreement entered on March 8, 2010, was the product of breaches by the then-directors of infoGroup of the fiduciary duty of loyalty. The court held that the claim which plaintiff sought to assert was individual in nature and that plaintiff had alleged sufficiently that the merger was not approved by a disinterested and independent majority of the directors. The court also held that, although plaintiff acknowledged that it was not asserting certain claims the dismissal of which had been sought by defendants, for purposes of avoiding confusion, those claims were dismissed. Accordingly, with that limited exception, the court denied defendants' motions to dismiss. View "New Jersey Carpenters Pension Fund v. InfoGroup, Inc., et al." on Justia Law

This matter was before the court on a motion to dismiss, pursuant to Court of Chancery Rule 23.1, for failure to make a pre-suit demand upon the board, and Court of Chancery Rule 12(b)(6) for failure to state a claim. At issue was whether actions taken by certain director defendants fell outside of the fiduciary boundaries existing under Delaware case law - and were therefore subject to judicial oversight - or whether the acts complained of were within those broad boundaries, where a law-trained judge should refrain from acting. The court held that the facts pled in support of allegations that the director defendants violated fiduciary duties in setting compensation levels and failing to oversee the risks created thereby, if true, only supported a conclusion that the directors made poor business decisions. Thus, plaintiffs have failed to allege facts sufficient to state a claim. Consequently, the court need not reach the Rule 12(b)(6) issue. View "In re: The Goldman Sachs Group, Inc. Shareholder Litigation" on Justia Law

Decedent's parents brought a wrongful death action against the nominal defendant after the nominal defendant allegedly ran through a stop sign which resulted in decedent's death. As part of that dispute, decedent's parents sought to discover information regarding two trusts, collectively known as the JBG Children's 1991 Trust (1991 Trusts), that nominal defendant and his ex-wife created for the benefit of their children (beneficiaries). Plaintiff, the trustee of the 1991 Trusts filed the present action seeking to confirm that the nominal defendant had no beneficial interest in the 1991 Trusts and that, therefore, decedent's parents should not be permitted to depose the trustee's employees in Delaware or Florida or otherwise obtain records of, or confidential information about, those trusts. The trustee subsequently filed a Motion and Proposed Order for a Rule to Show Cause in this action that would direct the decedent's parents to appear before the court and state why it should not enter a declaratory judgment. As a preliminary matter, the court held that the trustee's claims for relief presented an actual case or controversy sufficient to support a justifiable claim for relief under the Delaware Declaratory Judgment Act, 10 Del. C. 6501-6513. The court also held that the McWane Cast Iron Pipe Corp. v. McDowell-Wellman Eng'g Co. Doctrine did not justify maintaining a stay and that there was no good reason to delay further proceedings to address the narrowly focused relief sought by the trustee's motion for entry of a rule to show cause. View "Bessemer Trust Co. of DE, N.A. v. Wilson" on Justia Law

This action arose out of a dispute between two companies involved in the development of pharmaceuticals. Plaintiff was a biodefense company engaged in the development and commercialization of medical countermeasures against biological and chemical weapons and defendant was also a biodefense company that concentrated on the discovery and development of oral antiviral and antibacterial drugs to treat, prevent, and complement vaccines for high-threat biowarfare agents. The court rejected plaintiff's claim that defendant breached a binding license agreement, but found that defendant did breach its obligations to negotiate in good faith and that defendant was liable to plaintiff under the doctrine of promissory estoppel. The court rejected defendant's claim that plaintiff breached its obligation to negotiate in good faith. The court denied plaintiff's claims for specific performance of a license agreement with the terms set forth in the time sheet or, alternatively, for a lump sum award of its expectation damages. The court concluded, however, that plaintiff was entitled to share in any profits relied on from the sale of the drug in question, after an adjustment for the upfront payments it likely would have had to make had the parties negotiated in good faith a license agreement in accordance with the terms of the term sheet. In addition, plaintiff was entitled to recover from defendant a portion of the attorneys' fees and expenses plaintiff incurred in pursuing the action. View "PharmAthene, Inc. v. SIGA Technologies, Inc." on Justia Law

This action arose from a transaction involving the sale of equity in a Texas-based dental practice management company to a Chicago-based private equity firm. At issue was whether the purchasers' ability to raise the forum selection clause issue in Texas provided them with an adequate remedy at law, undermining the basis for equity jurisdiction, and if not, whether the terms of the forum selection clause were broad enough to reach the Texas claims. The court held that the forum selection clause did not provide purchasers an adequate remedy at law, and therefore, the court had subject matter jurisdiction over their claims. The court also held that the forum selection clause here, which applied to any claims arising under or relating to the transaction, was sufficiently broad in scope that the purchasers were likely to succeed in showing that it provided exclusive jurisdiction in Delaware over the claims brought by the sellers in Texas. Accordingly, the court granted purchasers' motion for preliminary injunction. View "ASDC Holdings, et al. v. The Richard J. Malouf 2008 All Smiles Trust, et al." on Justia Law

In this action brought pursuant to 8 Del. C. 225, plaintiffs sought a determination that certain written consents validly removed defendant directors and replaced them with a new slate. Defendant directors contended that they could not be removed or a new slate elected without the consent of a majority of the Series B Preferred Stock. Applying enhanced scrutiny, the court held that defendant directors breached their fiduciary duties when issuing the Series B Preferred Stock where, although they honestly believed they were acting in the best interests of the company, they breached their duty of loyalty by structuring the stock issuance to prevent an insurgent group from waging a successful proxy contest. Therefore, the class provision could not be given effect and the written consents validly elected a new board. View "Johnston, et al. v. Pedersen, et al." on Justia Law

This post-trial opinion determined the voting membership of GnB, LLC, a Delaware limited liability company. The parties disputed whether Firehouse Gallery, LLC, a Florida limited liability company, was a voting member of GnB. The parties also disputed whether GnB possessed an exclusive license to use the first-tier, generic domain name candles.com; held an option to purchase candles.com; and owned other assorted domain names relating to the candles business. The court held that Firehouse and plaintiff, who controlled GnB, each held a 50% voting membership interest; GnB owned the exclusive license and option to purchase candles.com and the other domain names; and plaintiff and defendant, the current principal of Firehouse, each breached their fiduciary duty of loyalty to GnB and must account for the profits and personal benefits they received. The court held that defendant was not otherwise liable to GnB or plaintiff. Because all of the litigants engaged in misconduct that could support fee-shifting, the doctrine of unclean hands applied with particular salience. Accordingly, the court held that all parties would bear their own fees and costs. View "Phillips v. Hove, et al." on Justia Law

Plaintiff, a Delaware taxpayer, asserted claims against defendant, the State of Delaware Auditor of Accounts, for claims related to defendant's alleged noncompliance with 29 Del. C. 2906(f), which stated, in part, that the "Auditor of Accounts shall conduct postaudits of local school district tax funds budget and expenditures annually" and for claims related to defendant's alleged violation of Delaware's Freedom of Information Act (FOIA), 29 Del. C. ch. 100., by failing to provide plaintiff with copies of certain employee time sheets which he duly requested. The court held that it lacked subject matter jurisdiction over the audit claims and the FOIA claims must be dismissed because of plaintiff's failure to exhaust administrative remedies. View "Korn v. State of Delaware Auditor of Accounts R. Thomas Wagner, Jr." on Justia Law