Justia Delaware Court of Chancery Opinion Summaries

Shareholder sent Corporation a formal written demand requesting access to twenty-two categories of Corporation's books and records. Corporation rejected the demand. Shareholder subsequently brought a books and records action under section 220 of the Delaware General Corporation Law. Corporation disputed the propriety of the purposes advanced by Shareholder and the ultimate scope of any court-ordered inspection of its books and records. The Court of Chancery held (1) Shareholder demonstrated a proper purpose for some of its books and records requests and demonstrated that it was entitled to inspect some of those books and records in aid of its proper purposes; and (2) otherwise, Shareholder's application under section 220 was denied. View "Rock Solid Gelt Ltd. v. SmartPill Corp." on Justia Law

Plaintiff Southeastern Pennsylvania Transportation Authority (SEPTA), a former stockholder of Defendant SRA International, Inc. (SRA), challenged the merger of SRA and affiliates of Defendant Providence Equity Partners LLC. SRA and several members of its board of directors (Individual Defendants) before the merger moved for judgment on the pleadings on Count IV of the complaint, which alleged that the merger was invalid and that by approving the invalid merger, the Individual Defendants breached their fiduciary duty of loyalty to the public stockholders of SRA. The Court of Chancery held (1) SEPTA's claim that the merger was invalid failed as a matter of law, as the merger was effectively deemed valid; but (2) at this stage, the Individual SRA Defendants were not entitled to judgment on SEPTA's claim that they breached their fiduciary duties, as the conduct of the fiduciaries who approved the merger may still be challenged on the basis that it was carried out in violation of SRA's certificate of incorporation. View "Se. Pa. Transp. Auth. v. Volgenau" on Justia Law

Two lawsuits alleging violations of the federal securities laws were filed against Hecla Mining Company in federal court. In this action, Plaintiffs, alleged holders of a number of Hecla shares, sued derivatively to recover on behalf of Hecla the damages that the Company had suffered and will suffer from the federal securities actions and the safety violations. Defendants, several individuals associated with the Company, moved to dismiss for failure to make demand or adequately plead demand futility. The Court of Chancery granted the motion and dismissed the complaint with prejudice and without leave to amend as to the named plaintiff, holding that Plaintiffs failed to provide adequate representation for Hecla. The Court noted, however, that the dismissal of Plaintiffs' complaint should not have preclusive effect on the efforts of other stockholders to investigate potential claims and, if warranted, to file suit. View "South v. Baker" on Justia Law

After a dispute resulting in a call for the resignation of several members of the Hockessin Community Center's board of directors, the Center filed a complaint seeking a determination of the lawful board of the Center. The complaint also sought damages and equitable relief under theories of breach of contract, breach of fiduciary duty, and secondary liability, based on Defendants' status as directors. The Court of Chancery named the lawful members of the board and the board president in its opinion, concluding (1) the disputed directors did not disqualify themselves and cease to be directors by failing to attend three board meetings in a row; (2) the disputed directors were not validly removed pursuant to a director-removal right in an agreement; (3) several of the defendant directors did not resign from the board; (4) although the Center failed to follow corporate formalities when adding certain directors, the directors validly served on the board as de facto directors; (5) a resolution adding five other non-defendants to the board was invalid; and (6) the actions taken at meetings at which the disputed directors reconstituted the board were partially valid. View "Hockessin Cmty. Ctr., Inc. v. Swift " on Justia Law

Plaintiff's complaint sought a judicial declaration that the individuals Plaintiff elected to the board of a corporation were invalidly elected and constituted the entirety of the corporation's board of directors. After Defendant Gary Loyd participated in the process for several months, and after resolution was impeded by delays, Loyd moved for judgment on the pleadings arguing that Plaintiff's complaint failed to state a claim against him because he did not purport to be a director, officer, or shareholder of the corporation. The Court of Chancery denied Loyd's motion, holding that the complaint stated a claim against Loyd, as the allegations in the complaint were well-pleaded and the evidence supported the allegation the Loyd had asserted direct or indirect control over the corporation. View "Aequitas Solutions, Inc. v. Anderson" on Justia Law

Plaintiff filed a complaint seeking the partition by sale of property owned by her deceased father and distribution of the proceeds to the three cotenants, herself, her sister Claudia, and her brother Benjamin. Claudia filed a counterclaim and cross-claim against Plaintiff, Benjamin, Benjamin's wife, Homeowners Loan Corporation (HLC), and Mortgage Electronic Registration Systems (MERS) for, among other things, a declaratory judgment that she had a life estate in the property. The Court of Chancery found in favor of Plaintiff and her request for a partition of the property. Claudia was then evicted from the property by a trustee appointed by the court to oversee the sale of the property. Thereafter, Plaintiff sought reimbursement for several expenses. HLC and MERS sought attorneys' fees and rent payments. The Court of Chancery awarded a total of $12,098 to Plaintiff for attorneys' fees, rent payments, funeral expenses, and trustee's fees. The Court also awarded $2,166 in rent payments to HLC and MERS and requested an itemized list of fees incurred as a result of Claudia's behavior that was found to be vexatious or in bad faith. View "Brown v. Wiltbank" on Justia Law

On this motion to dismiss, plaintiff stockholders argued that they stated a claim for breach of fiduciary duty because a controlling stockholder refused to consider an acquisition offer that would have cashed out all the minority stockholders of defendant Synthes, Inc. but required the controlling stockholder to remain as an investor in Synthes. Instead, the controlling stockholder worked with the other directors of Synthes and ultimately accepted a bid made by Johnson & Johnson for sixty-five percent stock and thirty-five percent cash, and consummated a merger on those terms. The controlling stockholder received the same treatment in the merger as the other stockholders. The Court of Chancery dismissed the complaint, holding that the facts pled did not support an inference that there was any breach of fiduciary duty on the part of the controlling stockholder or members of the board of directors. View "In re Synthes, Inc. S'holder Litig." on Justia Law

Plaintiff entered into a lease with Defendant containing optional renewal terms. The parties disputed whether the option was properly exercised. Defendant then informed Plaintiff that if it failed to vacate the leasehold, Defendant would pursue legal action. Plaintiff brought this action to forestall that eventuality. At issue in this case was whether the Court of Chancery can exercise jurisdiction over what is essentially a real estate possession action, notwithstanding that the Legislature has vested exclusive jurisdiction over such matters with the Justice of the Peace Courts. The Court of Chancery granted Defendant's motion to dismiss, concluding (1) the Court does not have jurisdiction, under the facts of this case, to enjoin Defendant from seeking relief from the Justice of the Peace Court in this matter where that court has exclusive jurisdiction; and (2) a claim does not exist in equity to nullify Defendant's contractual rights arising from Plaintiffs' purported failure to timely exercise an option. View "Heartland Del. Inc. v. Rehoboth Mall Ltd. P'ship" on Justia Law

Defendants presented themselves as president and vice president of ESG, Inc. in order to purchase assets from the predecessor of Plaintiff, Envo, Inc. Unfortunately, after the assets had been transferred, Defendants learned that ESG did not exist. Defendants kept the assets, however, and used them to run a business under the name Environmental Solutions Group, Inc. Defendants subsequently refused to pay Envo for the assets. Envo filed this claim under the doctrine of promissory estoppel and other legal and equitable doctrines, claiming it was damaged by Defendants' action. The Chancery Court found (1) Defendants and Environmental Solutions Group were liable to Envo under the doctrine of promissory estoppel; and (2) Envo was entitled to damages in an amount equal to the purchase price of the assets, plus pre-judgment interest, post-judgment interest, and costs. View "Envo, Inc. v. Walters" on Justia Law

This action arose from a technology-sharing relationship between companies engaged in the manufacture of industrial "sand-core" pipe for water and sewer applications. In 2002, the parties entered into an agreement whereby Plaintiffs agreed to provide Defendant with their technology for more efficient manufacturing sand-core pipe in exchange for data, reports, software, and other information developed by Defendant through use of Plaintiffs' process. Over time, the relationship between the parties disintegrated. As a result, in 2009, Plaintiffs brought this action asserting breach of contract and other causes of action related to Defendant's alleged nonperformance under their agreement. The Chancery Court dismissed Plaintiffs' claims for breach of contract, as well as claims under California Uniform Trade Secrets Act and for common law misappropriation, finding the claims were barred by laches. View "Petroplast Petrofisa Plasticos S.A. v. Ameron Int'l Corp." on Justia Law