Justia Delaware Court of Chancery Opinion Summaries

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

The Court of Chancery granted summary judgment to Plaintiffs in this case involving the removal of one plaintiff from an LLC's board of managers, holding that Plaintiffs were entitled to summary judgment and that Defendants were not entitled to summary judgment.Plaintiffs filed a complaint under 6 Del. C. 18-110 seeking an injunction preventing Lorenzo Roccia's removal from the Skyline Renewables LLC board of managers and a declaration that his purported removal was void. Defendants argued that the removal of Roccia was valid and binding. Both parties filed motions for summary judgment. The Court of Chancery granted summary judgment for Plaintiffs, holding that the individual who removed Roccia was not authorized to do so. View "Roccia v. Mugica" on Justia Law

The Court of Chancery granted Defendants' motion to dismiss Harley Franco's action filed under 6 Del. C. 18-110 and 6 Del. C. 18-111 seeking a declaration that because Franco no longer agreed to Doug Houghton's continued service on the Avalon Freight Services LLC Board of Directors, Houghton must be removed from the Board, holding that section 3.1 of the Avalon LLC Agreement did not empower Franco to unilaterally remove Houghton from the Board.Franco interpreted section 3.1's requirement that the fifth director of the Avalon Board - Houghton - be mutually agreement upon and appointed by Franco and one other director to mean that if Franco no longer agreed to houghton's continued service, Houghton must be removed from the Board. The Court of Chancery dismissed the action, holding that that Franco may not unilaterally remove Houghton from the Avalon Board. View "Franco v. Avalon Freight Services LLC" on Justia Law

In this case involving the validity of an agreement (the Omnibus Agreement) between Stream TV Networks, Inc., its two secured creditors, and fifty-two of its stockholders, the Court of Chancery denied Stream's motion for a preliminary injunction and granted SeeCubic Inc.'s motion for a preliminary injunction, holding that the Omnibus Agreement was valid.In the Omnibus Agreement, Stream agreed to transfer all of its assets to SeeCubic, an entity controlled by Stream's secured creditors. Stream argued that the agreement was invalid and sought a preliminary injunction to prevent SeeCubic from taking any action to enforce it. SeeCubic, on the other hand, argued that the agreement was valid and sought a preliminary injunction preventing Stream or any third-party defendants from taking any action to interfere with it. The Court of Chancery granted SeeCubic's motion, holding that none of Stream's arguments against the validity of the agreement had merit and that SeeCubic was entitled to a preliminary injunction. View "Stream TV Networks, Inc. v. SeeCubic, Inc." on Justia Law

The Master of Chancery determined that Meghan Kelly's complaint against Donald Trump, in his individual capacity and in his official capacity as President of the United States, must be dismissed as legally frivolous under 10 Del. C. 8803(c).In her complaint, Kelly brought three counts alleging that Trump violated her religious freedom. Among other relief, Kelly sought relief permanently enjoining and restraining Trump from forcing religious views or sponsoring religion and from persecuting those with diverse religious beliefs while he serves as President of the United States. Kelly's primary claim was that, through Trump's deception, he was misleading people, deceiving them to sin, and dooming them to hell, and therefore, Kelly will not be able to love them for eternity. The Master in Chancery recommended that the Court dismiss the complaint as legally frivolous, holding that the complaint failed to state a claim upon which relief may be granted. View "Kelly v. Trump" on Justia Law

The Court of Chancery granted Hightower Holdings, LLC's motion to dismiss this action under Rule 12(b)(3) based on the doctrine of forum non conveniens, holding that Hightower carried its burden to show that it would suffer overwhelming hardship from being forced to litigate this action in Delaware under the circumstances presented.This litigation arose when Scott Holsopple left his employment with Focus Operating, LLC (Focus Sub) and took a job with Hightower Holdings, LLC. Focus Financial Partners, LLC (Focus Parent), the publicly traded parent company of Focus Sub, filed this lawsuit against Holsopple and Hightower. Five days later, Holsopple and Hightower filed an action against Focus Parent in a California court, seeking declarations that restrictive covenants and Delaware-forum and Delaware-law provisions in a unit agreement Holsopple signed when joining Focus Sub were invalid and unenforceable under California law. Focus Parent then filed a second amended complaint asserting, among other things, claims for breach of the Delaware-forum provisions. Hightower moved to dismiss this action under the doctrine of forum non conveniens. Holsopple was subsequently dismissed from the lawsuit. The Court of Chancery granted the motion, holding that, under the circumstances, it would impose overwhelming hardship if Hightower were forced to litigate a less advanced case in this jurisdiction. View "Focus Financial Financial Partners, LLC v. Holsopple" on Justia Law

The Court of Chancery granted Defendants' motion to dismiss this derivative action under Rule 23.1 on the grounds that Plaintiff failed to demand that the Facebook board of directors (the Board) pursue the litigation and did not establish that demand was futile.At the request of Mark Zuckerberg, the Board pursued a reclassification of Facebook's shares, the result of which would be to shift two-thirds of Facebook's economic value to the non-voting stock and enable Zuckerberg to transfer the bulk of his economic ownership in Facebook without giving up voting control. After a lawsuit, the Board withdrew the reclassification. Plaintiff then filed a derivative action against Zuckerberg and Board members that approved the reclassification, claiming that the pursuit of the reclassification constituted a breach of duty and that Facebook was harmed as a result. Plaintiff chose not to make a pre-suit demand. Defendants moved to dismiss the action under Rule 23.1. The Court of Chancery granted the motion, holding that demand was not excused on the grounds that the directors were incapable of making an impartial decision regarding whether to institute such litigation. View "United Food & Commercial Workers Union v. Zuckerberg" on Justia Law