Justia Delaware Court of Chancery Opinion Summaries

Andrew Durham, the only non-managing member of Grapetree, LLC, filed direct claims against the LLC seeking reimbursements for expenses incurred by the vacation properties the LLC managed. At trial, Andrew sought $28,983 plus interest. The Court of Chancery determined that Durham was entitled to be reimbursed in connection with certain expenses but that Durham had not met his burden as to specific expenses for which he sought reimbursement. The Court invited further submissions on the amount Durham was due. The Court subsequently determined that Durham was entitled to $1,504, plus pre- and post-judgment interest, as the LLC conceded at trial that Durham was owed $1,504, and Durham failed to demonstrate that the remaining requested reimbursements were actually incurred, supported by appropriate documentation, or incurred to benefit the LLC. View "Andrew Durham v. Grapetree LLC" on Justia Law

Xcell Energy and Coal Company, LLC (Xcell) defaulted on its loan obligations to a creditor. Through a court-appointed receiver, Xcell alleged that its past manager and member were liable for their mismanagement and misconduct that allegedly caused the defaults. Xcell asserted claims for breach of fiduciary duty and waste against Energy Investment Group (EIG) and Polo Investments, LLC (Polo) and for aiding and abetting, tortious interference with a contract, and waste against Edmod DiClemente (together with EIG and Polo, the Moving Defendants). The Moving Defendants filed a motion to dismiss for failure to state a claim. The Court of Chancery granted the Moving Defendants’ motion to dismiss for failure to allege the requisite elements to state a claim against the Moving Defendants. View "Xcell Energy & Coal Co., LLC v. Energy Inv. Group, LLC" on Justia Law

Petitioner worked as a charge nurse at a facility of the State’s Department of Health and Social Services (DHSS). After an incident with a patient who later died, DHSS concluded that Petitioner should be dismissed for patient neglect, failure to perform a thorough assessment of the patient’s condition, and unprofessional and unacceptable behavior. Petitioner’s employment was governed by a collective bargaining agreement (CBA) between a union and HDSS. After arbitration as prescribed by the CBA, the arbitrator concluded there was just cause for Petitioner’s dismissal. Petitioner brought this action challenging the arbitrator’s decision. The Court of Chancery granted summary judgment in favor of DHSS, holding that the arbitrator (1) correctly held DHSS to its burden to demonstrate good cause for termination in reaching his decision; (2) applied the correct standard of care as to the definition of “neglect”; and (3) necessarily rejected Petitioner’s effort to obtain back pay. View "AFSCME, Council 81, Registered Nurses Unit, Local 2305 v. State, Dep’t of Health & Soc. Servs." on Justia Law

In 2003, Plaintiffs loaned Utility Systems, Inc. (“USI”), which provided wastewater disposal services to the Woods on Herring Creek community, almost $250,000 to meet the costs of managing and improving the wastewater treatment system (“System”). Plaintiffs were not repaid by USI. In 2013, Plaintiffs filed this action seeking to recover the loaned funds under the doctrines of quantum meruit and unjust enrichment. Plaintiffs named as defendants Woods on Herring Creek Homeowners Association, which took over the System in 2004, and Sussex County, to whom the Association transferred the system in 2008. The Court of Chancery granted Defendants’ motion to dismiss, holding that Plaintiffs’ action was barred by laches. View "Carbaugh v. Woods on Herring Creek Homeowners Ass’n" on Justia Law

After Occam Networks, Inc. merged with Calix, Inc., Plaintiffs filed an action contending that Defendants, Occam directors and others, breached their fiduciary duties by making decisions during Occam’s sale process that fell outside the range of reasonableness and by issuing a proxy statement for Occam’s stockholder vote on the merger that contained materially misleading disclosures and material omissions. Defendants moved for summary judgment. The Court of Chancery (1) granted the director defendants’ motion for summary judgment, holding that a provision in Occam’s certificate of incorporation exculpated them from liability; and (2) denied summary judgment as to the disclosure claims because genuine issues of material fact existed as to these claims. View "Chen v. Anderson" on Justia Law

When Rural/Metro Corporation (“Rural”) merged with an affiliate of Warburg Pincus LLC, each publicly held share of Rural common stock was converted into the right to receive $17.25. Plaintiff-stockholders initiated this action, contending (1) the members of the Rural board of directors breached their fiduciary duties by approving the merger and by failing to disclose material information in Rural’s definitive proxy statement; and (2) RBC Capital Markets, LLC aided and abetted the directors’ breaches of fiduciary duty. The directors settled with Plaintiffs, and the case proceeded to trial against RBC. The Court of Chancery ruled in favor of Plaintiffs, holding that RBC was liable for aiding and abetting the directors’ breaches of the duty of care and the duty of disclosure. View "In re Rural Metro Corp. Stockholders Litig." on Justia Law

Since 2007, Dimensional Associates, LLC, a private equity fund, had controlled Orchard Enterprises, Inc., a Delaware corporation. In 2010, Dimensional squeezed out the minority stockholders of Orchard. The merger consideration was $2.05 per share, but in 2012, the then-Chancellor determined that the fair value of the common stock at the time of the merger was $4.76 per share. Plaintiffs subsequently filed this breach of fiduciary action, contending that Dimensional and the directors who approved the merger should be held liable for damages. Plaintiffs also named Orchard as a defendant. Plaintiffs and Defendants filed cross motions for summary judgment. The Court of Chancery (1) denied Plaintiffs’ motion except in two respects: one of Plaintiffs’ claimed violations of Defendants' duty of disclosure was a material misrepresentation, and entire fairness was the operative standard of review with the burden of persuasion on Defendants; and (2) denied Defendants’ motions except in two respects: one of the alleged disclosure violations was factually accurate, and Orchard could not be held liable for breach of fiduciary duty or for aiding and abetting. View "In Re Orchard Enters., Inc. Stockholder Litig." on Justia Law

Anthony Pacchia brought an action challenging a transaction through which Activision Blizzard, Inc. and an entity controlled by Activision’s two senior officers acquired more than fifty percent of Activision’s outstanding shares from Vivendi S.A., its controlling stockholder. Several of the individual defendants who served on the Activision board of directors and approved the transaction were senior officers of Vivendi (“Vivendi Directors”). Vivendi objected to the document requests that Plaintiff served on the grounds that French law generally barred the production of discovery, noting that all of its electronic documents were housed on servers in Paris, France, and could not be produced. Plaintiff filed a motion to compel seeking an order requiring Vivendi and the Vivendi Directors to produce documents in their custody and control, wherever located, in accordance with the Court of Chancery Rules and without regard to any contrary provisions of French law. The Court of Chancery largely granted the motion and directed that discovery proceed in the manner described in this decision. View "In re Activision Blizzard, Inc. Stockholder Litig." on Justia Law

The parties in this dispute were Koninklijke Philips N.V. (“Philips N.V.”), a Netherlands holding company, and Carlo Vichi, an Italian businessman who had a longstanding business relationship with Philips N.V. Philips N.V. was a participant in a joint venture, LG.Philips Displays Holdings B.V. (LPD), that did business with Vichi and other entities. LPD approached Vichi for a substantial loan, which Vichi agreed to make. The joint venture eventually defaulted on the loan. Vichi filed a complaint against Philips N.V., claiming that Philips N.V. committed fraud by misrepresenting the joint venture’s financial condition and prospects and by falsely promising that it would stand behind LPD to ensure it could meet its financial obligations. The Court of Chancery held that Philips N.V. was not liable to Vichi on any of the claims he presented at trial and that Philips N.V. should not be held responsible for the loss Vichi suffered on the loan he made to LPD. View "Vichi v. Koninklijke Philips Elecs., N.V." on Justia Law

Plaintiffs in this case were former shareholders of McMoRan Exploration Company (MMR). Plaintiffs challenged MMR’s acquisition by Freeport-McMoRan Copper & Gold, Inc. The case settled, and the only remaining issue was an award to Plaintiff of their attorneys’ fees and expenses upon the Court of Chancery’s discretion. After a consideration of numerous factors, the most important of which was the benefits achieved by Plaintiffs for the shareholder class, the Court of Chancery concluded that the appropriate award of fees and expenses for the efforts of Plaintiffs’ attorneys was $2.4 million. View "In re McMoRan Exploration Co. Stockholder Litig." on Justia Law