Justia Delaware Court of Chancery Opinion Summaries

In 2013, the Board of Directors of Morgans Hotel Group Co. (the Company) approved a two-part recapitalization involving the Yucaipa Companies, LLC. Stockholder OTK Associates filed a complaint alleging that Yucaipa, three affiliated entities, the investor who controlled Yucaipa, and the directors who approved the recapitalization breached their fiduciary duties and engaged in acts of wrongdoing when pursuing and approving the recapitalization. Counts I-VIII of the complaint sought to recover from Defendants the damages the Company suffered, and Count IX sought a declaration that the agreements governing the recapitalization were invalid. Several defendants filed motions to dismiss. The Court of Chancery held (1) the motion to dismiss on the basis that Counts I-VIII were moot was denied because OTK could recover damages on the Company’s behalf; (2) Count IX was dismissed pursuant to Rule 23.1 to the extent it contended that Yucaipa and its affiliates repudiated the transaction agreements; and (3) two of the defendant directors’ motions to dismiss in reliance on an exculpatory provision in the Company’s certificate of incorporation was denied, as the Court could not apply the exculpatory provision summarily at the pleadings stage to enter judgment in their favor. View "OTK Assocs., LLC v. Friedman" on Justia Law

The party to an exclusive marketing, license, and distribution agreement (licensee) brought contract and tort claims in California against the other parties to that agreement and their affiliated companies (licensors). The defendants in that action, including the licensors, were the plaintiffs in this action. Plaintiff sought a declaratory judgment that the agreement was properly terminated and injunctive relief relating to the agreement's confidentiality and termination provisions. Defendant asserted counterclaims for breach of contract, among other claims. The Court of Chancery awarded the licensee damages against the licensors, their parent, and a sister company, holding (1) those plaintiffs who were parties to the agreement breached the non-compete provision of that agreement or the implied covenant of good faith and fair dealing, and those plaintiffs and a sister company were liable in tort for tortious interference with contract; (2) the additional named plaintiffs were not liable in contract or tort; (3) the agreement was properly terminated, and Defendant was required to comply with the agreement's termination and confidentiality provisions; and (4) both parties' requests for attorneys' fees were denied. View "eCommerce Indus., Inc. v. MWA Intelligence, Inc." on Justia Law

In 2009, Sirius SM Radio Inc. negotiated a capital infusion (the investment agreement) from Liberty Media Corporation in return for Liberty Media receiving preferred stock in Sirius. Under the investment agreement, Liberty Media secured the ability to take control of Sirius in 2012 without paying a premium to Sirius stockholders by purchasing additional shares needed to obtain control in the market. When Liberty Media announced in 2012 that it intended to acquire majority control, Plaintiffs sued, contending that the Sirius board had breached its fiduciary duties by adhering to the provisions of the investment agreement and that Liberty Media breached its fiduciary duties by purchasing shares on the open market to acquire majority control of Sirius without paying a premium. The Court of Chancery granted Defendants' motion to dismiss, holding (1) Plaintiffs' challenge to the investment agreement was time-barred, as it was filed after the three-year limitations period expired; and (2) Liberty Media's decision to give valuable consideration in exchange for the right to make open market purchases after the standstill period expired provided no basis for a cause of action against it. View "In Re Sirius XM S'holder Litig." on Justia Law

Twenty-three plaintiffs (Plaintiffs) representing the interests of a stockholder faction challenged the validity of incumbent directorships elected at the corporation's annual meeting. The parties stipulated to holding a second stockholders' meeting, at which five directors were elected to the corporation's board. After three of the directors resigned their directorships, the two remaining directors executed written consents appointing a third director to the board. The three directors then appointed two more directors to fill the remaining vacancies. Plaintiffs petitioned the Chancery Court pursuant to Del. Code 8, 223(c) to order a new election through exercise of the stockholders' franchise rather than through appointment by the remaining directors. After noting that Plaintiffs bore the burden of persuasion under section 223(c), the Court held that the equities did not support a special meeting of the stockholders and that the directors appointed by the remaining elected directors continue in office until the election at the next annual meeting. View "Canmore Consultants Ltd. v. L.O.M. Med. Int'l, Inc. " on Justia Law

Plaintiff took exceptions to the Master's Final Report which allowed for the withdrawal of an agreed-upon arbitrator because he had concluded that he could not fairly and objectively resolve plaintiff's dispute with defendant. The Master concluded that ordering arbitration before an arbitrator who admitted his conflicts would serve no useful purpose and that a substitute arbitrator should be designated to resolve the parties' dispute. The court concluded that plaintiff's exceptions to the Master's Final Report were overruled. The Master's Report, with its findings of fact, conclusions of law, and recommended remedy were confirmed and adopted. View "Lynn v. Ullrich" on Justia Law

Plaintiff, Cecil W. Scott, executed two deeds (the 1996 Deeds) conveying two real properties he owned to his brother Roland fourteen years prior to being adjudicated a disabled person. Subsequently, one of Cecil's sisters filed a complaint on behalf of Cecil seeking to set aside the 1996 conveyances. The court concluded that plaintiff failed to demonstrate that Cecil lacked capacity when he executed the 1996 Deeds or that the 1996 Deeds were the product of undue influence by Roland. Accordingly, the court recommended that plaintiff's complaint be denied. View "Scott v. Scott" on Justia Law

This matter involved the acquisition of R&S by KBR from ENI pursuant to a stock purchase agreement (SPA). At issue was whether the entire escrow fund should be released to ENI or whether it was entitled to a portion of this fund. KBR sought a preliminary injunction of any further proceedings before the arbitrator. The court denied the motion for a preliminary injunction because the issues involved in this request were largely mooted by clarification of the parties' positions during briefing and by clarification of the law by the Supreme Court in Viacom International v. Winchell, which was decided while this matter was being briefed. View "ENI Holdings, LLC v. KBR Group Holdings, LLC" on Justia Law

The County moved for partial summary judgment, asking the court to uphold alleged land use restrictions created by two agreements (collectively, the "Master Plan") that were executed to govern the development of Pike Creek Valley. The Master Plan prevented PCRS from developing any portion of approximately 177 acres that once operated as a golf course. The court concluded that the Master Plan created a restrictive covenant on the golf course that runs with the land; PCRS had not met its burden of demonstrating that mandamus should lie here; and PCRS could not avoid the applicable County approval processes via the presumption statute, res judicata, collateral estoppel, or by claiming violations of constitutional guarantees. Accordingly, the court denied the interested parties' motion to intervene; granted in part the County's motion for summary judgment; granted in part PCRS' motion for summary judgment; and dismissed the petition for a writ of mandamus. View "New Castle Cty. v. Pike Creek Recreational Servs., LLC" on Justia Law

After the court concluded that respondent litigated in bad faith and that this matter was unnecessarily prolonged due to petitioners' ambiguously-drafted Petition to Quiet Title, the court directed petitioners to submit a statement of reasonable attorney fees which they believed reflected the cost imposed on them by respondent's purely vexatious legal maneuvers. Petitioners submitted an affidavit for attorney fees but respondent failed to respond. Thus, respondent waived any objection to the statement of fees. The court awarded petitioners $1,250.00 in attorneys' fees under the bad faith exception to the American Rule, to be paid by respondent within thirty days from the date this matter becomes final. View "Branson, et al. v. Branson" on Justia Law

Plaintiff and two defendants engaged in settlement negotiations and, after the parties agreed to the amount of monetary consideration to be paid toward the settlement, one of the defendants was no longer willing to settle. Plaintiff sought to enforce what he contended was the parties' settlement agreement. The court concluded that the settlement was not enforceable because the parties did not reach an agreement on all of the essential terms to the settlement. View "Harrison v. Dixon, et al." on Justia Law