The 2024 Chambers Global Practice Guide for “Shareholders’ Rights & Shareholder Activism”, with contributions from Kai Liekefett, Derek Zaba, Ram Sachs, and Evan Grosch, is now available. The guide provides an overview of corporate governance and shareholder activism based on
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Equity Has Its Limits: Chancery Rejects Bid For An “Equitable Eraser”
It may seem obvious that “[e]quity cannot bless th[e] deliberate violation of an explicit statutory prohibition,” but in the recent Delaware Court of Chancery decision, TS Falcon I, LLC v. Golden Mountain Financial Holdings Corp., Vice Chancellor Lori Will reminded…
Watch What You Say: Disparaging Comments May Trigger Contractual Repurchase Rights Even If Shielded From A Defamation Claim
A recent Delaware decision has demonstrated the limits of the absolute litigation privilege, holding that it did not protect an LLC member from claims that his defamatory statements triggered contractual repurchase rights of his membership interests. Absolute litigation privilege, in…
Words Matter: Different Definitions of “Commercially Reasonable Efforts” Lead to Different Results in Drug-Development Earnout Disputes
Acquisitions of biotech companies with development-stage drug candidates often include earnout agreements. The buyer pays the seller’s stockholders with cash or stock upfront, and the seller’s stockholders are entitled to additional payments if the drug or drugs in development reach…
Eye Doctor With Blind Spot Loses LLC Manager Position
Last month, the Delaware Court of Chancery upheld an amendment of a Limited Liability Company agreement through a merger even when it had recently struck down a similar amendment in the same LLC agreement. In Campus Eye Management Holdings, LLC…
The Dog That Didn’t Bark: Court of Chancery Decision Reaffirms the Strength of the Demand Futility Standard
In July, in Vladimir Gusinsky Revocable Tr. v. Hayes, No. CV 2022‑1124‑MTZ (July 23, 2024), Vice Chancellor Zurn issued an opinion reiterating the high bar a plaintiff must overcome to excuse demand.
The post The Dog That Didn’t Bark: Court…
(Fear) the Reaper, LLC: Court of Chancery Clarifies LLC Governance Rights Upon Member Death
A recent decision from the Delaware Court of Chancery, Gurney-Goldman v. Goldman, C. A. 2023-1124-JTL (July 12, 2024), addressed a matter of first impression: What is the power of an estate’s executor to exercise an LLC member’s corporate governance rights…
In Case of First Impression, Court of Chancery Awards Expenditures Incurred in Third-Party Litigation as Breach of Contract Damages
On remand from the Delaware Supreme Court, the Court of Chancery has awarded XRI more than $6 million in litigation expenses and recoupment of fees advanced to a former LLC member who breached the governing LLC Agreement. XRI Inv. Holdings…
Chancery, Affirmed: Delaware is ‘Contractarian,’ So Please Read The Fine Print
Chancery Court Reminds Bricklayers of Sturdy Foundation Required to Plead Demand Futility for Caremark Claims
Last month, in Bricklayers Pension Fund of Western Pennsylvania v. Brinkley, Delaware’s Court of Chancery dismissed a stockholder plaintiff’s derivative suit against the directors and officers of Centene Corporation for purported breaches of fiduciary duty in connection with their…