Justia Delaware Court of Chancery Opinion Summaries

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

VTB Bank, a Ukranian bank and company, brought this lawsuit against Development Max, LLC, a Delaware limited liability company, and Navitron Projects Corp., a Panamanian corporation and managing member of Development Max, alleging fraudulent transfer, constructive fraudulent transfer, and unjust enrichment. Development Max and Navitron filed a motion to dismiss on the grounds of forum non conveniens, among other theories. The Court granted the motion with respect to VTB’s claim against Navitron but denied the motion with respect to VTB’s claim against Development Max. On reconsideration, the Court granted, without prejudice, Development Max’s motion to dismiss on grounds of forum non conveniens, holding that Ukraine, as opposed to Delaware, was the proper forum in which to litigate this dispute. View "VTB Bank v. Navitron Projects Corp." on Justia Law

Plaintiffs were members of New Media Investors II-B, LLC, which was established as a vehicle for investing in Jenzabar, Inc. In 2004, Jenzabar was recapitalized, and New Media received junior preferred stock and warrants. In 2013, the warrants lapsed. That same year, efforts to dissolve New Media were initiated, although Plaintiffs did not cash their distribution checks. Instead, they made a books and records request demanding valuation of their holdings of New Media to investigation into misconduct by the managing member of New Media and the CEO of Jenzabar and others in the course of operating New Media. The Court of Chancery granted the request in part, holding (1) Plaintiffs failed to demonstrate that investigating misconduct or wrongdoing is their proper purpose; and (2) Plaintiffs demonstrated that valuation is a proper purpose, but the inspection rights should not extend to Jenzabar, and Plaintiffs may inspect only the books and records for the years 2010 forward. View "In re New Media Books and Records Action" on Justia Law

Petitioner filed a petition to disinter the body of her daughter, believing Respondent, her daughter’s widower, murdered her daughter. Petitioner sought evidence to substantiate this belief via the disinterment and a subsequent autopsy. The daughter lived and died in Florida but was buried in a Delaware cemetery. The Court of Chancery denied the petition to disinter, holding (1) Petitioner’s exceptions to the Master’s Final Report recommending denying Petitioner’s petition were untimely and unavailing; and (2) Petitioner failed to meet the standard for exhumation by demonstrating to a reasonable certainty that disinterment will be of utility. View "Rinnier v. Gracelawn Memorial Park, Inc." on Justia Law

This case involved a dispute between Plaintiffs, Rexas Inc., Rexam PLC, and Rexas Overseas Holdings Ltd. (“Rexam”), and Defendant Berry Plastics Corp. (“Berry”) over the risks of potential pension liability. In 2014, Berry agreed to purchase Rexam’s healthcare containers and closures business and accepted responsibility for the pensions of certain employees at one of Rexam’s facilities that it was acquiring (the “Rexam Pension Plan”). Before the anticipated closing, the Pnesion Benefit Guaranty Corp. (“PBGC”) notified Rexam that it had initiated an inquiry into the Pension Plan Transfer (the “PBGC Inquiry”). As part of the closing, the parties agreed to defer the Pension Plan Transfer. After the closing, the PBGC sent an email regarding the Pension Plan Transfer. Berry then informed Rexam that it would not complete the Pension Plan Transfer because it considered the PBGC’s email evidence of a threatened legal or administrative action by the PBGC. Rexam sued Berry for breach of contract. The Court of Chancery entered judgment on the pleadings in favor of Rexam and against Berry, holding that the PBGC did not “threaten” to take action, and therefore, Berry’s performance - acceptance of the Pension Plan Transfer - was not excused because of the PBGC Inquiry. View "Rexam Inc. v. Berry Plastics Corp." on Justia Law