Justia Delaware Court of Chancery Opinion Summaries

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

Plaintiff and Defendant entered into a Master Purchase/Service Agreement (MPSA) containing a provision that, under certain conditions, allowed the prevailing party in a dispute arising under the MPSA to recovery attorneys’ fees. Plaintiff brought suit in the Delaware Superior Court, and then Defendant filed in New Jersey. The venue dispute ended with the Delaware Superior Court granting Defendant’s motion to stay in favor of the New Jersey action, which effectively mooted the Delaware action. Plaintiff sought a voluntary dismissal, but Defendant wanted dismissal with prejudice and to recover its attorneys’ fees and costs incurred in the action. The Court of Chancery dismissed this action under Court of Chancery Rule 419(a)(2), without prejudice. As a condition of dismissal, the Court retained jurisdiction to award attorneys’ fees and costs to Defendant in accordance with the MPSA, holding (1) dismissal without prejudice was appropriate as to the venue dispute; and (2) while waiting for the final outcome of the New Jersey action would be the preferable approach before awarding attorneys’ fees, at this point, under the terms of the MPSA, Defendant was entitled to its attorneys’ fees that were incurred in this action. View "Avaya, Inc. v. Charter Commc’ns Holding Co., LLC" on Justia Law

Four stockholders of Trulia, Inc. filed class action complaints alleging that Trulia’s directors had breached their fiduciary duties in approving the Zillow Inc.’s acquisition of Trulia in a stock-for-stock merger at what Plaintiffs alleged was an unfair exchange ratio. The parties eventually reached an agreement-in-principle to settle under which Trulia agreed to supplement materials provided to its stockholders that would include additional information that theoretically would allow the stockholders to be better informed in exercising their franchise rights. The Court of Chancery declined to approve the proposed settlement, holding that the terms of this proposed settlement were not fair or reasonable because the proposed settlement did not afford Trulia’s stockholders any meaningful consideration to warrant providing a release of claims to the defendants. View "In re Trulia, Inc. Stockholder Litig." on Justia Law

Plaintiff brought his derivative action on behalf of a Corporation against the Corporation’s CEO. The parties entered into a settlement agreement that embodied much of the relief sought by Plaintiff. Under the settlement agreement, however, the Corporation committed to buy Plaintiff’s corporate stock at the price Plaintiff paid fifteen years ago. This opportunity was not available to other Corporation stockholders. Other Corporation stockholders objected to the settlement. The Court of Chancery refused to approve the settlement, holding that Plaintiff’s achievements for the benefit of the Corporation were significantly outweighed by the concerns raised by the unique benefits accruing solely to Plaintiff. View "Smollar v. Potarazu" on Justia Law

Bennie Farren died leaving a will under which he bequeathed his former residence and other assets to a trust. The trust contemplated that Patricia McGlaughlin could live in Bennie’s former residence for the remainder of her life. Rebecca Courson, Bennie’s ex-wife, filed a claim against the Estate based on a child support order entered by a Florida court in 1986 and modified in 1987. Andrew Farren, Courson’s biological son and the executor of Bennie’s estate, accepted Courson’s claim as a valid debt of the Estate. Thereafter, Andrew filed a petition to sell Bennie’s former residence to raise additional funds. McGlaughlin opposed Andrew’s petition and also petitioned to remove Andrew as executor. The Court of Chancery (1) granted Andrew’s motion in part, holding that the Florida orders constituted a final judgment entitled to full faith and credit under the federal Constitution but that there was insufficient evidence in the record to consider the facts and equities involved in ordering a sale of Bennie’s residence; and (2) denied McGlaughlin’s motion for summary judgment, holding that the evidence was insufficient to support judgment as a matter of law as to Courson’s claim that Andrew breached his fiduciary duties by accepting his mother’s claim. View "In re Estate of Bennie P. Farren" on Justia Law

Plaintiff filed this action against three outside directors of nominal defendant EXCORP, Inc., alleging breach of fiduciary duty, among other claims. The directors filed a motion to dismiss. Recognizing that he had not pled a non-exculpated claim against the directors, Plaintiff proposed a dismissal without prejudice. The directors, in turn, sought a dismissal with prejudice that would bind all potential plaintiffs. The Court of Chancery dismissed the claims against the outside directors with prejudice as to the named plaintiff only, holding (1) Plaintiff failed to establish good cause for a without-prejudice dismissal; and (2) the Due Process Clause prevents a judgment in a derivative action that is entered before the stockholder plaintiff acquires authority to litigate on behalf of the corporation from binding anyone other than the named stockholder plaintiff. View "In re EZCORP INC. Consulting Agreement Derivative Litig." on Justia Law

This case involved a home-improvement contract between Petitioner, a construction company, and Respondents, homeowners. Both parties argued that the other breached the contract. The superior court determined that the matter must be referred to arbitration under an arbitration provision in the contract. The arbitrator found in favor of Petitioner. Petitioner filed this action seeking to confirm the arbitration award and moved for summary judgment. Only after Petitioner filed its summary judgment motion did Respondents file an answer opposing confirmation of the award. The Court of Chancery granted the petition to confirm, holding that summary judgment was appropriate in this case. View "SC&A Constr., Inc. v. Potter" on Justia Law