Blogs

Delaware Chancery Law Blog
The Delaware Court of Chancery is widely considered the preeminent forum for resolving disputes involving the internal affairs of the multitude of Delaware corporations and other business entities through which a vast amount of the world's commercial affairs is conducted. Join Carl as he helps guide you through the complex landscape of legal issues and analysis arising before this Court.
View Blog

Delaware Bankruptcy Update Blog
Carl shares his knowledge of Delaware bankruptcy proceedings in a blog entitled, "Delaware Bankruptcy Update." He offers his take on corporate bankruptcy proceedings not only in Delaware but throughout the United States, as well as industry insight on topics such as preference litigation, tenant bankruptcy and defending avoidance litigation.
View Blog

Recent Blog Posts

  • Chancery Dismisses Claims that are Duplicative of Breach of Contract Claim In the recent decision of Edinburgh Holdings, Inc. v. Education Affiliates, Inc., C.A. No. 2017-0500-JRS (Del. Ch. June 6, 2018), the Delaware Court of Chancery considered whether claims for breach of contract, breach of fiduciary duty and the implied covenant of good faith and fair dealing could be brought in relation to the same conduct. Background In Edinburgh, the dispute arose from the sale of a proprietary education business.  The Asset Purchase Agreement (“APA”) provided for earnout payments to the seller based upon the acquired... More
  • Chancery Denies Reargument of Aruba Appraisal Decision On May 21, 2018, the Delaware Court of Chancery denied Petitioners’ motion for reargument in the Aruba Networks appraisal litigation, styled as Verition Partners Master Fund Ltd. v. Aruba Networks Inc., C.A. No. 11448-VCL (Del. Ch. May 21, 2018).  In the Court’s post-trial memorandum opinion, dated February 15, 2018, Vice Chancellor Laster issued a ruling, setting the stock’s fair value at Aruba’s thirty-day average unaffected market price, which was $17.13 per share, which was significantly below the merger price of $24.67. In denying Petitioner’s motion for reargument,... More
  • Court of Chancery Examines Exceptions to the Attorney-Client Privilege The recent decision of Paul Morris v. Spectra Energy Partners (DE) GP, LP et al., C.A. No. 12110-VCG (Del. Ch. May 7, 2018) provides a helpful analysis of the attorney-client privilege in Delaware and certain exceptions thereto.  In this master limited partnership dispute, plaintiff asserted that the general partner’s conflicts committee acted in bad faith by knowingly approving a transfer of assets for approximately $500 million less than they were worth. A discovery dispute arose as to whether emails between counsel for the general... More
  • Chancery Finds that GP was Not Properly Admitted under LP Agreement In the recent decision of Eames v. Quantlab Group GP, LLC, C.A. No. 2017-0792-JRS  (Del. Ch. May 1, 2018), the Court considered an application under 6 Del. C. § 17-110 to determine the validity of the admission of a new general partner to Quatlab Group, LP (“Quantlab LP”), a Delaware limited partnership. Section 17-110 of the Delaware Revised Uniform Limited Partnership Act (“DRULPA”) provides that a partner may petition the Court of Chancery to, among other things, “determine the validity of any admission, election, appointment... More
  • Chancery Addresses Fraud Claims in the Inducement of a Merger In the recent decision of LVI Grp. Inv., LLC v. NCM Grp. Holdings, LLC, et al., C.A. No. 12067-VCG (Del. Ch. Mar. 28, 2018), the Court of Chancery considered fraud claims in the inducement of a merger.  In ruling on a motion to dismiss filed by certain principals, the Court addressed the scope of director consent statutes, and whether certain conspiracy claims were adequately pled. The litigation resulted from the combination of two large demolition firms—LVI Group Investments, LLC (“LVI”) and NCM Group... More
  • Corporate Waste Claim Survives Motion to Dismiss Recently, in the decision of Feuer v. Redstone, (Del. Ch. Apr. 19, 2018), the Delaware Court of Chancery considered a motion to dismiss brought in response to a derivative complaint against certain directors of CBS Corporation for excessive compensation paid to media titan, Sumner Redstone, at a time when plaintiff alleged he could no longer render meaningful services to the company.  The derivative plaintiff complained that his receipt of millions in salary from his “at will” employment since 2014 resulted in... More
  • Delaware Supreme Court Amends Rule 14(g)(i) to Allow for Fastcase Citations By order dated April 16, 2018, the Delaware Supreme Court has amended Delaware Supreme Court Rule 14(g)(i).  The amendments allow parties to cite to cases in Fastcase, a legal research system that members of the Delaware State Bar Association can access for free.  This is in addition to Westlaw and Lexis, which were already contemplated under Rule 14(g)(i). A copy of the Delaware Supreme Court’s order adopting the rule change can be found here, and the announcement by the Court can... More
  • VER Technologies Files for Chapter 11 Bankruptcy Protection On April 5, 2018, VER Technologies Holdco LLC, along with eight subsidiaries and affiliates (collectively, “VER”), filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (Case No. 18-10834). VER, based in Glendale, CA, is an engineering and equipment company that, among other things, lit the red carpet for the Academy Awards show.  VER filed for bankruptcy after negotiating a proposed restructuring deal with creditors. The Debtors listed $1 billion... More
  • Demand Not Excused When “Best Practices” Not Followed When a derivative lawsuit is brought on behalf of a company, the derivative plaintiff will often times attempt to argue that demand upon the board would be “futile” in order to excuse the demand requirement under Delaware Court of Chancery Rule 23.1.  The reason is that when a demand is in fact made upon the board, the propriety of the board’s refusal of the demand is governed by the “business judgment rule” — which is very unfavorable to the demanding... More
  • DGCL Section 223: Petitioning the Court to Fill Vacant Director Positions Section 223 of the Delaware General Corporation Law (the “DGCL”) provides an invaluable remedy to stockholders when there are no directors in office, or when, due to vacancies or newly created directorships, the directors in office constitute less than a majority of the board. Under Section 223(a) of the DGCL, when there are no directors in office, any officer or stockholder (of fiduciary of a stockholder) “may apply to the Court of Chancery for a decree summarily ordering an election as... More
  • Breach of Fiduciary Duty Does Not Always Lead to Damages It is not uncommon for the Court of Chancery to find that a fiduciary duty was breached, but to award only nominal damages or no damages as a result of such breach.  This is so because damages are not an element of a claim for breach of fiduciary duty under Delaware law.  Rather, the elements are that 1) a fiduciary duty exists, and 2) such duty was breached.  This was demonstrated in the recent decision of The Ravenswood Investment Company LP... More
  • Preference Actions filed in Hancock Fabrics On January 31, 2018, Hancock Fabrics Inc., the post-effective date debtor, filed approximately 68 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code. The Debtors filed voluntary petitions for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on February 2, 2016 under Chapter 11 of the Bankruptcy Code.  On June 20, 2017, the Court entered an order confirming the Debtors’ Second Amended Joint Chapter 11... More
  • Life Insurance Investment Company Files for Bankruptcy in Delaware On December 29, 2017, Life Settlement Absolute Return I, LLC (“LSAR”), along with Senior LS Holdings, LLC (“Senior LS”; collectively with LSAR, the “Debtors”), filed petitions for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case Nos. 17-13030 and 17-13031). According to the Declaration in Support of the First Day Motions of Robert J. Davey, III (“Davey Declaration”), LSAR was formed as a special purpose vehicle to invest in life insurance policies in the life settlement market. LSAR has comprehensive... More
  • Real Industry Inc. Files for Chapter 11 Bankruptcy Relief in Delaware On November 17, 2017, Real Industry, Inc., along with its subsidiaries and affiliates (collectively the “Debtors” or “Real Industry”), filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 17-12464). According to the Declaration in Support of First Day Motions of Michael J. Hobey, liquidity issues and certain singular negative events have led to Real Industry’s bankruptcy filing. The Debtors operate an aluminum recycling and alloy production company based in Beachwood, Ohio. Contemporaneously, Real Alloy... More
  • Digital Audio Files of the Delaware Bankruptcy Court Available Over the Internet Effective November 6, 2017, the U.S. Bankruptcy Court for the District of Delaware will start making audio recordings of certain proceedings available to the public through PACER, as well as the standard ECF notifications received by counsel.  The recordings themselves will be an attachment to a PDF document, and will be in MP3 format. Initially it will only be for proceedings before Judge Kevin J. Carey, although it may expand to other Judges in the future.  Click here for the notification posted... More