Justia Delaware Court of Chancery Opinion Summaries

This case involved the interpretation of two provisions in a merger agreement between defendant corporation and a company whose former stockholders were represented by plaintiff. The two provisions at issue dealt with contingent payments due in certain circumstances from defendant to those stockholders. The court found that the language of the merger agreement was unambiguous, and that per its provisions, defendant's obligations under the merger agreement were assumed by the acquiring company, thus avoiding the acceleration of the remaining revenue contingent payments. Therefore, the court denied plaintiff's motion for summary judgment and granted summary judgment in favor of defendant. View "Coughlan v. NXP B.V." on Justia Law

Plaintiff contended that holders of common stock of Wesco were entitled to appraisal rights under Section 262 of the General Corporation Law, 8 Del. 262, in connection with a forward triangular merger among Wesco, its parent, and an acquisition subsidiary. The parties cross-moved for partial summary judgment on the availability of appraisal rights. The court held that because Wesco common stockholders were not required to accept consideration other than stock listed on a national securities exchange and cash in lieu of fractional shares, they were not entitled to appraisal rights. Accordingly, summary judgment on this issue was entered in favor of defendants. View "Krieger v. Wesco Financial Corp., et al." on Justia Law

This case was a class action brought on behalf of the former shareholders of Alloy, challenging a going-private transaction (Merger) that cashed out the company's public shareholders for allegedly inadequate consideration. Although the shareholders voted to approve the Merger, two of Alloy's nine directors retained their senior management positions at and received an equity interest in the now privately-held company. The former shareholders claimed that those two directors thus unfairly extracted for themselves an opportunity to share in Alloy's continued growth without offering the same opportunity to the public shareholders. Regarding the alleged breaches of fiduciary duty by the directors in negotiating and approving the Merger, the court found that the complaint failed to state a claim for damages. The court also found that the complaint failed to allege sufficient facts to support an inference that the alleged disclosure violations were the product of anything other than good faith omissions by the directors who authorized them. Because of the exculpatory provision of Alloy's certificate of incorporation, the complaint thus failed to state a claim for damages against the Alloy directors for beach of their duty of disclosure. Finally, the court also dismissed the claims for aiding and abetting against defendants who were not affiliated with Alloy. Therefore, the court granted defendants' motions to dismiss in all respects. View "In re Alloy, Inc. Shareholder Litigation" on Justia Law

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

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 out of the sale of Giant Cement Holding, Inc. (Giant) by defendant Cementos Portland Valderrivas (CPV) to defendant Corporacion Uniland S.A. Sagarra Inversiones, S.L. (Sagarra) challenged the transaction on the basis of CPV's self-dealing because of its position as the majority shareholder on both sides of the transaction. Sagarra purported to bring this action individually and derivatively on behalf of nominal defendant Uniland Acquisition Corp. (Uniland Delaware). The court held that to the extent the Complaint asserted a multiple derivative action on behalf of Uniland Delaware, it must be dismissed because Sagarra did not have standing to raise those claims based on the court's review of Spanish law. The court held that for the same reasons, Counts I and II, which assert multiple derivative claims on behalf of Uniland Delaware, were dismissed. The court's determination with respect to Sagarra's lack of standing as to Counts I and II was equally applicable to Count III. The court finally held that because Count IV raised fiduciary duty claims under Spanish law, the better course of action was for the court to exercise its discretion and dismiss Count IV. Therefore, defendants' motion to dismiss the Complaint was granted and an implementing order would be entered. View "Sagarra Inversiones, S.L. v. Cementos Portland Valderrivas, S.A., et al." on Justia Law

This case stemmed from a dispute between Omniglow, LLC's three members (Leemon, Holland, and Achaian). At issue was whether one member of a Delaware limited liability company could assign its entire membership interest, including that interest's voting rights, to another existing member, notwithstanding the fact that the limited liability company agreement required the affirmative consent of all of the members upon the admission of a new member, or, must the existing member assignee be readmitted with respect to each additional interest it acquired after its initial admission as a member. The court held that the answer depended in the first instance on the specific provisions governing the transferability of Interests in Omniglow's LLC Agreement. When Omniglow's LLC Agreement was read as a whole, as it must be, it allowed an existing Member to transfer its entire Membership Interest, including voting rights, to another existing Member without obtaining the other Members' consent. Thus, Holland's assignment of its 30% Interest to an existing member, Achaian, was effective to vest all of the rights associated with that Interest in Achaian, and Omniglow now had two coequal 50% Members. View "Achaian, Inc. v. Leemon Family LLC, et al." on Justia Law

This case arose when Commerzbank agreed to acquire Dresdner Bank in September 2008. As part of the deal, Commerzbank also acquired Dresdner Bank's trust preferred structures, and holders of Dresdner's trust preferred securities received distributions in both 2009 and 2010. Plaintiff claimed that paying those distributions "pushed," or required Commerzbank to make distributions on, a class of its owned preferred securities in which plaintiff had an interest, and, by the complaint, plaintiff asked the court to enforce that alleged obligation. Plaintiff also sought specific performance of a support agreement that was argued to require the elevation of the liquidation preference of Commerzbank's trust preferred securities in response to a restructuring of one class of the Dresdner securities. The parties filed cross-motions for summary judgment. The court held, among other things, that because the DresCap Trust Certificates did not qualify as either Parity Securities, defendants were entitled to judgment in their favor as a matter of law regarding plaintiff's claim under the Pusher Provision. The court also held that because DresCap Trust Certificates did not qualify as either Parity Securities or Junior Securities, Section 6 of the Support Undertaking was not triggered by amendment of the DresCap Trust IV Certificates. Accordingly, defendants were entitled to judgment in their favor as a matter of law regarding plaintiff's claim that the amendment of the DresCap Trust IV Certificates required defendants to amend the Trusted Preferred Securities.View "The Bank of New York Mellon v. Commerzbank Capital Funding Trust II, et al." on Justia Law

Plaintiffs, shareholders of Ness Technologies, Inc. (Ness), moved to expedite proceedings in this putative class action, which they filed to enjoin a proposed transaction through which Ness's largest shareholder, Citi Venture Capital International (CVCI), would, through a wholly owned subsidiary, acquire Ness in a cash transaction at $7.75 per share (Proposed Transaction). Plaintiffs contended that the Proposed Transaction was the product of a flawed sales process and that the members of the Board, aided and abetted by CVCI, breached their fiduciary duties to plaintiffs and the class by approving the transaction. Plaintiffs asserted both price and process claims and claims that the Board's disclosures regarding the Proposed Transaction were inadequate. The court held that plaintiffs' Motion for Expedited Proceedings was granted only to the extent that they could take expedited, but necessarily limited and focused, discovery regarding the question of whether either the Board's or the Special Committee's financial advisors were conflicted because of their relationships with CVCI. The motion was denied in all other aspects. View "In re Ness Technologies, Inc. Shareholders Litigation" on Justia Law

This case arose out of a sale-leaseback transaction that occurred in 2001. On July 10, 2011, the seller-lessees' parent company announced plans for a proposed transaction whereby it would seek a new credit facility and undergo an internal reorganization. As part of a subsequent reorganization, substantially all of its profitable power generating facilities would be transferred from existing subsidiaries to new "bankruptcy remote" subsidiaries, except for two financially weakened power plants. On July, 22, 2011, plaintiffs brought this action seeking to temporarily restrain the closing of the proposed transaction on the grounds that it violated the successor obligor provisions of the guaranties and would constitute a fraudulent transfer. The court found it more appropriate to analyze plaintiffs' motion for a temporary restraining order under the heightened standard for a preliminary injunction. Having considered the record, the court held that plaintiffs have failed to show either a probability of success on the merits of their breach of contract and fraudulent transfer claims or the existence of imminent irreparable harm if the transaction was not enjoined. Therefore, the court denied plaintiffs' application for injunctive relief. View "Roseton Ol, LLC, et al. v. Dynegy Holdings Inc." on Justia Law