Justia Delaware Court of Chancery Opinion Summaries

Plaintiffs, a towing company and its owner, filed a complaint against the Division of State Police, Department of Safety and Homeland Security, State of Delaware, alleging that Defendants discriminated against the owner on the basis of her sex and against the company as a minority-owned business and that Defendants treated Plaintiffs differently for arbitrary or malicious reasons by not assigning the towing company, the only female-owned towing company in Delaware, additional territory. The Court of Chancery granted Defendants’ motion to dismiss, holding that Defendants established that the complaint alleged facts that showed it was filed too late and Plaintiffs failed to carry their burden of pleading facts demonstrating that tolling applies. View "First State Towing, LLC v. Div. of State Police" on Justia Law

Before Russell Banks died, Russell and his brother, David Banks, owned together fifteen parcels of real estate in Sussex County, Delaware. The granting language of the deed to each parcel stated that the property was conveyed to the brothers as “joint tenants with right of survivorship.” David asserted that this language granted joint tenancies with right of survivorship (WROS) and that the properties passed to him in full upon Russell’s death. Mackie Banks, the executrix of Russell’s estate, filed an inventory for Russell’s estate asserting that the properties were conveyed to the brothers as tenants in common and that the Estate held a fifty percent ownership interest in the properties. David filed a petition to quiet title on the properties. The Court of Chancery granted David’s motion for judgment on the pleadings, holding that the language conveying the property as “joint tenants with right of survivorship” was sufficient to create a joint tenancy WROS and not a tenancy in common. View "Banks v. Banks" on Justia Law

National Financial, LLC, a consumer finance company, loaned $200 to Gloria James. In substance, the loan was a one-year, non-amortizing, unsecured cash advance. The total repayments added up to $1,820, totaling a cost of credit of $1,620. The annual percentage rate (APR) of for the loan was 838.45 percent. After James defaulted, she filed this lawsuit. The Court of Chancery held that the loan was invalid and (1) rescinded the loan on the grounds that it was unconscionable, and (2) awarded statutory damages and attorneys fees and costs on the basis that National violated the Truth in Lending Act. View "James v. National Financial, LLC" on Justia Law

RayTrans Holdings, Inc., through the Chapter 7 Trustee for the bankruptcy estate of RayTrans Holdings, cross-claimed against RayTrans Distribution Services, Inc., Echo Global Logistics, Inc., and Echo/RT Holdings, LLC (collectively, Defendants) seeking avoidance of certain transfers among Defendants, an accounting, and injunction prohibiting any further transfers of RayTrans assets by Defendants until all creditors of RayTrans Holdings were paid in full. The Court of Chancery granted Defendants’ motion to dismiss the cross-claims, holding (1) the Trustee does not have standing to sue for fraudulent transfer on behalf of RayTrans Distribution; (2) RayTrans Distribution’s transfer of assets was not fraudulent; and (3) the Trustee’s request for leave to amend the cross-claims is denied. View "Spring Real Estate, LLC v. Echo/RT Holdings, LLC" on Justia Law

The underlying action in this case took place in a California court and resulted in a jury award of compensatory damages of $22.3 million in favor of Sierra Railroad Company and against Patriot Rail Company LLC. The jury also awarded punitive damages and exemplary damages in favor of Sierra. Sierra moved to amend the California judgment to add Gary Marino, the former Chairman, President and CEO of Patriot Rail, as a judgment debtor. Marino subsequently commenced this action seeking advancements of attorneys’ fees and expenses for the claims asserted against him in the post-judgment motion. The Court of Chancery granted summary judgment in favor of Marino, holding that Marino was entitled to some, but not all, of the fees and expenses that he has and will incur defending against the post-judgment motion. View "Marino v. Patriot Rail Co. LLC" on Justia Law

In 2011, Seller sold a Company to Buyer under an Agreement. The Agreement contained provisions relating to tax consequences of change-of-control payments and professional fees that would be incurred that would reduce the Company’s tax liability. Seller argued before the Court of Chancery that Buyer breached the Agreement by not paying to Seller the full value of the tax savings. The Court entered judgment in favor of Seller in the $1,557,171, together with post-judgment interest at the legal rate, holding that, according to the intent of the parties as expressed in the Agreement as well as extrinsic evidence, Buyer owes Seller the value of the tax savings. View "Cyber Holding LLC v. CyberCore Holding, Inc." on Justia Law

Plaintiff sought a preliminary injunction against Defendant to secure its information rights under a governing agreement. The Court of Chancery denied the motion, concluding that there was not a sufficient showing of risk of irreparable harm to justify interim injunction relief. Plaintiff moved for reargument or reconsideration, arguing that the Court misapplied or misapprehended the law and the facts. The Court of Chancery denied Plaintiff’s motion for reargument, holding that Plaintiff failed to demonstrate that the Court’s decision regarding irreparable harm was the product of a misapprehension of the facts or a misapplication of the law. View "AM Gen. Holdings LLC v. Renco Group, Inc." on Justia Law

In 2012, a private equity firm purchased a trucking company now owned by Buyer through a merger transaction. Plaintiff initiated this action as the representative of the selling securityholders (Securityholders) to recover a preclosing tax refund. Buyer, in response, asserted several counterclaims. Securityholders sought to dismiss Buyer’s counterclaims. The Court of Chancery (1) denied Securityholders’ motion to dismiss Buyer’s common law fraud claim insofar as that claim asserted fraud based on extra-contractual statements made to Buyer before it entered the merger agreement, as Buyer was not prevented from asserting a claim for fraud based on representations outside the four corners of the merger agreement; (2) granted Securityholders’ motion to dismiss Buyer’s claim under the Delaware Securities Act and Buyer’s claim of unilateral mistake, as these claims failed to state a claim for relief; and (3) granted Plaintiff’s motion for summary judgment concerning the tax refund claim, as Buyer had no defense to Plaintiff’s motion. View "FdG Logistics LLC v. A&R Logistics Holdings, Inc." on Justia Law

RED Capital Investment L.P. and George Polk (together, Plaintiffs) filed this suit claiming that RED Parent LLC (the Company) violated their rights to inspect certain Company books and records pursuant to the Company’s amended and restated operating agreement and 6 Del. C. 18-305(a)-(b). The request was made by Polk, a member of the Company’s board of managers. The Court of Chancery agreed with Plaintiffs and ordered the Company to allow Plaintiffs to inspect the requested books and records, holding (1) Polk’s request was made in his representative capacity on behalf of RED Capital as a member and in his individual capacity as manager; and (2) Polk was entitled to the requested books and records. View "RED Capital Inv. L.P. v. RED Parent LLC" on Justia Law

Amalgamated Bank requested to inspect the books and records of Yahoo! Inc., stating that its purpose was to investigate the hiring and subsequent firing of Yahoo’s chief operating officer. Yahoo produced some, but not all, of the requested documents. Amalgamated subsequently filed this action pursuant to section 220 of the Delaware General Corporation Law demanding to inspect the books and records. This post-trial decision ordered a production of some of the documents identified in the demand subject to an Incorporation Condition setting forth that the resulting documents will be deemed incorporated by reference in any derivative complaint that Amalgamated may file relating to the subject matter of the demand. View "Amalgamated Bank v. Yahoo! Inc." on Justia Law