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.
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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.
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Recent Blog Posts

  • Delaware Supreme Court Clarifies Confidentiality Order Requirement in Books and Records Action In the recent decision of Tiger v. Boast Apparel, Inc., No. 23, 2019 (Del. Aug. 7, 2019), the Delaware Supreme Court held that conditioning the inspection of documents pursuant to a demand under 8 Del. C. § 220 on the demanding party entering into a confidentiality agreement should be viewed as the exception, not the rule, and that the corporation must provide justification for confidentiality in order for such a condition to be upheld by the Court. As stated by the Delaware High Court: We... More
  • United States Supreme Court Holds that an “Objective Analysis” Applies to Determine Whether Civil Contempt is Appropriate for a Creditor’s Violation of a §524(a)(2) Discharge Order Stephanie Slater writes: The United States Supreme Court granted certiorari to determine the applicable legal standard for holding a creditor in civil contempt when a creditor attempts to collect a debt that falls within an issued bankruptcy discharge order.  In Taggart v. Lorenzen, 139 S.Ct. 1795 (2019), the Court unanimously decided to adopt an “objective standard,” holding that a court has permission to issue civil contempt sanctions against a creditor where there is “not a fair ground of doubt” in determining whether... More
  • Chancery Grants Inspection of Books and Records to Facebook Investors Concerning Data Breach On May 31, 2019, the Court of Chancery issued a 57-page memorandum opinion ordering Facebook Inc. to provide certain corporate books and records to various plaintiff investors, in the case of In re Facebook Inc. Section 220 Litigation, Consol. C.A. No. 2018-0661-JRS (Del. Ch. May 31, 2019), in a dispute filed under Section 220 of the Delaware General Corporation Law (“DGCL”). Plaintiffs’ books and records demand was brought following “one of the sharpest single-day market value declines in history when [Facebook’s] stock price... More
  • Delaware Supreme Court Reverses Chancery Judgment, Awards Wind Farm Investor $126 million in Damages In the recent Delaware Supreme Court decision of Leaf Invenergy Co. v. Invenergy Renewables, LLC, No. 308, 2018 (Del. May 3, 2019), the High Court found that a nominal damages award of $1 by the Court of Chancery in a suit over a multi-billion dollar sale of a portion of  defendant/appellee Invenergy Wind LLC (“Invenergy”), a wind farm developer, should be reversed because the sale violated the consent rights of the plaintiff/appellant investor, Leaf Invenergy Co. (“Leaf”), warranting $126 million in damages. The... More
  • Advancement Awarded to Delaware LLC Member by Court of Chancery In a recent opinion issued by the Delaware Court of Chancery, Freeman Family LLC v. Park Avenue Landing LLC, C.A. No. 2018-0683-TMR (Del. Ch. Apr. 30, 2019), Vice Chancellor Montgomery-Reeves granted advancement to a member of a Delaware LLC.  In the case, plaintiff Freeman Family LLC (“Plaintiff”), a member of defendant Park Avenue Landing LLC (“LLC” or “Defendant”), requested advancement under the terms of the LLC’s operating agreement.  The operating agreement provides that members shall receive advancement if they are made party to an... More
  • Delaware Supreme Court Overturns Chancery’s Aruba Appraisal Decision On April 17, 2019, the Delaware Supreme Court reversed a significant appraisal decision from the Delaware Court of Chancery in Verition Partners Master Fund, Ltd. v. Aruba Networks, Inc., No. 368, 2018 (Del. Apr. 17, 2019).  In Aruba, the Supreme Court reversed the trial court’s fair value award of $17.13 a share, directing the Court of Chancery to enter judgment at the deal price (minus synergies value) of $19.10 per share. In so doing, the High Court found that the Court of Chancery improperly... More
  • Chancery Applies Rule 15(aaa) to Action Transferred from Superior Court In the recent decision of Otto Candies, LLC v. KPMG, LLP, C.A. No. 2018-0435-MTZ (Del. Ch. Apr. 25, 2019), the Delaware Court of Chancery found that Rule 15(aaa) applied to a case transferred from the Superior Court when plaintiffs, faced with a motion to dismiss for failure to state a claim under Rule 12(b)(6), declined to amend their complaint in lieu of filing an answering brief.  Court of Chancery Rule 15(aaa) provides that if a party declines to either amend their... More
  • Court of Chancery Finds Personal Jurisdiction Lacking under the Implied Consent Statute of the LLC Act In the recent decision of CelestialRX Investments, LLC v. Krivulka, C.A. No. 11733-VCG (Del. Ch. Mar. 27, 2019), the Delaware Court of Chancery addressed whether certain named defendants were subject to jurisdiction in Delaware under the implied consent statute of 6 Del. C. § 18-109(a).  That statute provides a statutory basis for “managers” (as defined in the LLC Act), and those who otherwise participate materially in the management of the LLC, to be subject to personal jurisdiction in Delaware, provided that... More
  • Delaware Supreme Court Finds Ambiguity in Contract Terms; Overturns Lower Court’s Granting of Summary Judgment In the recent Delaware Supreme Court decision of Sunline Commercial Carriers, Inc. v. CITGO Petroleum Corp., No. 185,2018 (Del. Mar. 7, 2019), at issue between the parties to two related contracts was the computation of the termination date.  The parties had contracted for defendant/appellee CITGO to ship oil using the trucking company of the plaintiff/appellant Sunline.  The Delaware Superior Court granted summary judgment in favor of CITGO, finding dispositive a provision in one of the agreements that specified a one year... More
  • Section 220 Books and Records Demand Denied by Court of Chancery In the recent decision of Hoeller v. Tempur Sealy Int’l Inc., C.A. No. 2018-0336-JRS (Del. Ch. Feb. 12, 2019), the Court of Chancery adjudicated a books and records dispute brought pursuant to Section 220 of the Delaware General Corporation Law (“DGCL”).  In a very careful and thoughtful memorandum opinion, Vice Chancellor Slights denied plaintiff’s books and records demand, finding that a proper purpose had not been stated. Plaintiff’s demand letter alleged that misconduct or wrongdoing occurred in light of defendant’s loss of a... More
  • Books and Records Action Dismissed in Light of Parallel Plenary Proceeding In the recent decision of CHC Investments LLC v. Firstsun Capital Bancorp, C.A. No. 2018-0610-KSJM (Del. Ch. Jan. 24, 2019), the Court of Chancery dismissed a books and records action brought pursuant to Section 220 of the Delaware General Corporation Law (“DGCL”), in light of a parallel pending plenary action.  The Court stated that seeking inspection under Section 220 of the DGCL to investigate pending claims is problematic for a number of reasons. First, Vice Chancellor McCormick noted that plenary and Section... More
  • Mattress Firm Files Chapter 11 Bankruptcy in Delaware – Commercial Landlords Take Notice Earlier this month, Mattress Firm, Inc., and its affiliated debtors (collectively, “Mattress Firm”) filed for chapter 11 protection in the United States Bankruptcy Court for the District of Delaware.  Through the bankruptcy, Mattress Firm expects to complete a prepackaged restructuring within 45 to 60 days. Commercial landlords need to pay close attention to this bankruptcy.  Mattress Firm has already filed court motions for approval to reject up to 700 leases and will begin to close roughly 200 stores in the next few... More
  • Delivery Agent Preference Actions Filed in Delaware Starting on September 14, 2018, George Miller, as Chapter 7 Trustee of the DA Liquidating Corporation, f/k/a Delivery Agent, Inc., et al. (“Debtors”) filed approximately 84 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547 and 550 of the Bankruptcy Code. Delivery Agent and its affiliated debtors filed voluntary petitions for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on September 15, 2016.  Delivery Agent had originally filed for Chapter 11 protection... 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
  • 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