Justia Delaware Court of Chancery Opinion Summaries

The Court of Chancery adopted Verizon Communications Inc.'s proposal for the amount of security required for its indemnification claim relating to national consumer-oriented class actions, holding that Altaba, Inc. (the Company) shall reserve $400 million as security earmarked for that claim, inclusive of the $58.75 million that the Company had paid to fund its share of the settlement.The Company, formerly known as Yahoo! Inc., publicly disclosed massive data breaches only after selling its operating business to Verizon Communications Inc. The Company's customers filed a series of national customer class actions. The parties to the class actions subsequently reached a global settlement, which the federal district court approved. The Company then dissolved. Verizon possessed a contingent contractual claim to indemnification from the Company for fifty percent of the liabilities associated with the class actions, and the Company proposed an amount of security that Verizon rejected. This proceeding followed, with the Company claiming that no security was required for Verizon's indemnification claim. The Court of Chancery held that the Company failed to carry its burden of proving that its proposed amount and form of security would be sufficient to satisfy Verizon's claim for indemnification if it matured and adopted Verizon's proposal for an amount. View "In re Altaba, Inc." on Justia Law

The Court of Chancery denied a request for an injunction to compel a healthcare provider to treat a hospitalized COVID-19 patient with ivermectin, holding that Plaintiff failed to show she was entitled to the relief she sought and failed to identify any established right that would entitle her to such relief.When a COVID-19 patient was admitted to the hospital for the virus, the patient requested to be treated with ivermectin. The request was denied. Plaintiff, the patient's wife, obtained a prescription from a doctor, but the hospital refused to administer the ivermectin prescription. Plaintiff filed a verified complaint for injunctive and declaratory relief requiring the hospital to administer the prescribed ivermectin. The Court of Chancery held that patients do not have a right to a particular treatment, and medical providers have a duty to treat in accordance with their standard of care. Because ivermectin was not part of the standard of care for the COVID-19 virus, Plaintiff was not entitled to relief. View "DeMarco v. Christiana Care Health Services, Inc." on Justia Law

The Court of Chancery granted in part an anti-suit injunction sought by a buyer and a parent corporation with whom the buyer contracted to acquire a wholly owned subsidiary (the Company) to bar the seller and its subsidiary from pursuing their claims in a Texas lawsuit, holding that the forum selection provision in the stock purchase agreement applied.Under the stock purchase agreement, the buyer contracted with a Company and caused the Company to enter into a supply agreement with a wholly owned subsidiary of the seller. The stock purchase agreement contained a forum selection provision. The seller signed the stock purchase agreement and did not sign the supply agreement. The seller's subsidiary signed the supply agreement but did not sign the stock purchase agreement. The seller and its subsidiary later filed a lawsuit in Texas state court seeking rescission of the supply agreement. The buyer and the Company then brought this action asking the court to apply the forum selection provision in the stock purchase agreement to the claims implicating the supply agreement. The Court of Chancery granted the request for an anti-suit injunction against the seller and against a non-signatory signatory, holding that an injunction was warranted. View "Florida Chemical Company, LLC v. Flotek Industries, Inc." on Justia Law

The Court of Chancery granted Defendants' motion to dismiss this amended complaint brought by Plaintiff seeking a determination that Defendants - the City of Wilmington, the Wilmington Police Department, and the mayor of the City - breached the collective bargaining agreement between the police union and the City when he was terminated for an alleged violation of the City's resident requirement, holding that this Court lacked subject matter jurisdiction.Specifically, the Court of Chancery held that Plaintiff's claims fell within the grievance procedure and were therefore subject to arbitration, and where Plaintiff did not follow the grievance process that was provided in the collective bargaining agreement, a complete remedy otherwise existed in the form of the grievance process outlined in the agreement. View "Kroll v. City of Wilmington" on Justia Law

The Court of Chancery held that it lacked subject matter jurisdiction to dissolve or to declare the proper managers of a foreign entity.This dispute involved a company formed by two friends - a sweat equity partner and a financial partner - that was converted to a Puerto Rican limited liability company in 2018. When the financial member leveraged its majority interest to unilaterally amend the operating agreement and remove the sweat equity partner from his managerial role the sweat equity member challenged its dilution, the conversion, and the partner's removal from management. The sweat equity member further requested an order dissolving the company. The Court of Chancery held (1) the company's conversion to a Puerto Rican entity stripped the Court of Chancery of statutory jurisdiction to declare the company's present managers and to order judicial dissolution; and (2) the Court was without subject matter jurisdiction to work an equitable dissolution of a Puerto Rican entity. View "In re Coinmint, LLC" on Justia Law

The Court of Chancery granted in part and denied in part Defendants' motion to dismiss Plaintiffs' action seeking to hold Exela Technologies, Inc. and its subsidiaries liable for an appraisal judgment, holding that Plaintiffs' claim for reverse veil-piercing was viable as a matter of Delaware law.Plaintiffs, former stockholders of SourceHOV Holdings, Inc., were awarded an appraisal judgment reflecting their shares were worth in excess of what they were offered in SourceHOV Holdings' merger with Exela. The court entered a charging order against SourceHOV Holdings' interests in its subsidiaries to facilitate the payment of the judgment, but the judgment remained unsatisfied. Plaintiffs, in a parallel action, sought to hold Exela and its affiliated entities accountable for the appraisal judgment. The Court of Chancery dismissed Plaintiffs' claim for unjust enrichment for failure to state a claim but denied Defendants' motion to dismiss the reverse veil-piercing claim, holding that this equitable remedy was viable. View "Manichaean Capital, LLC v. Exela Technologies, Inc." on Justia Law

The Court of Chancery granted Defendants' motion for judgment on the pleadings in this action seeking to draw or claw back several million dollars in cash, holding that Defendants were entitled to the motion.Seller sold all outstanding shares of its wholly owned subsidiary (together, with its subsidiaries, Target) to Buyer (together with Target, Defendants). All of Target's assets, except for those excluded by the parties' purchase agreement, were transferred in the stock transaction (the disputed cash). After the transaction closed, millions of dollars in cash remained in Target's bank accounts. Seller asked Buyer to return the disputed cash but Buyer refused. Seller then brought this complaint. Defendants sought judgment on the pleadings in their favor. The Court of Chancery granted the motion, holding that no material issue of fact existed and that Defendants were entitled to judgment as a matter of law. View "Deluxe Entertainment Services Inc. v. DLX Acquisition Corp." on Justia Law

In this expedited contractual dispute, the Court of Chancery granted summary judgment in favor of defendant Ripple Labs, Inc., holding that Ripple was entitled to summary judgment.Ripple, an enterprise blockchain company, executed a stockholders' agreement with Tetragon Financial Group, Ltd., an investment company that held a majority of Ripple's Series C preferred stock, memorializing Tetragon's investment and status as "Lead Purchaser." Pursuant to the agreement Tetragon had a reception right that was triggered upon a "Securities Default," upon which Tetragon may demand redemption of its shares via a "Redemption Request." At issue was whether certain actions by the SEC constituted a "Securities Default" under the agreement. The Court of Chancery granted summary judgment for Ripple, holding that certain SEC processes satisfied the definition of "Securities Default." View "Tetragon Financial Group Limited v. Ripple Labs Inc." on Justia Law

The Court of Chancery held that this dispute with Defendant, a Delaware member corporation that governed the townhome and condominium development in which Plaintiff owned several properties, was an appropriate case for awarding expenses and that Plaintiff was entitled to $12,697, the amount he identified in his opening brief.Defendant fined Plaintiff for failing to remove a mounting bracket left on the roof after a satellite dish ordered by one of Plaintiff's tenants was left on the roof. Plaintiff filed this lawsuit to invalidate the charges and sought to recover his expenses. Defendant mooted the underlying dispute by clearing Plaintiff's account of the charges. The Court of Chancery held that Defendant was entitled to his expenses under the enforcement provision of the Delaware Uniform Common Interest Ownership Act. View "Bragdon v. Bayshore Property Owners Association, Inc." on Justia Law

The Court of Chancery granted Plaintiffs' motion to compel the production of documents and denied Defendants' motion for a retroactive extension in the time to respond, holding that Defendants are required to product all documents responsive to the requests for production of documents within fourteen days.Through Heartland Family Group, LLC, Alexander Burns controlled Southport Lane, L.P. and its affiliates (the Southport Entities). Plaintiffs sued Burns and Heartland, arguing that certain transactions rendered two companies acquired by the Southport Entities insolvent. Plaintiffs served requests for production of documents on Defendants. In response, Defendants invoked the Fifth Amendment. Plaintiffs then moved to compel the production of documents and responses to interrogatories. Defendants moved for a retroactive extension. The Court of Chancery granted Plaintiffs' motion to compel and denied the motion for a retroactive extension, holding that Defendants' invocation of the Self-Incrimination Clause is overruled. View "Wood v. U.S. Bank National Ass'n" on Justia Law