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

  • Court of Chancery Weighs Terminating M&A Deals Under Material Adverse Effect Clauses The COVID-19 pandemic is shaking up M&A transactions and the Court of Chancery has seen a sudden uptick in litigation. In a recently published article, two of my Fox Rothschild colleagues – Chaney Hall and Katelyn Crawford – note that buyers with cold feet are invoking their agreement’s material adverse effect clauses (MAE) to justify terminating or postponing the deal, sparking complaints primarily filed by sellers seeking specific performance to compel a buyer to close the deal. More
  • Delaware Supreme Court Validates Charter Provisions Requiring that Federal Securities Act Claims be Brought in Federal Court In the highly anticipated decision of Salzberg v. Sciabacucchi, No. 346, 2019, 2020 WL 1280785 (Del. Mar. 18, 2020), the Delaware Supreme Court held that a provision in several Delaware corporations’ charters, requiring that actions arising under the Securities Act of 1933 (the “Securities Act”) be brought in federal court, was valid and enforceable. Background/Court of Chancery Decision Appellee, Matthew Sciabacucchi, purchased shares in three Delaware corporations in their initial public offerings or shortly thereafter.   Each of these companies adopted a federal-forum... More
  • Court of Chancery Opinion Addresses the Equitable Dissolution of a Delaware LLC Section 18-802 of Delaware’s Limited Liability Act (“LLC Act”) provides a statutory basis for the Court of Chancery to dissolve a Delaware LLC.  The statute, which confers standing upon an LLC member of manager, states that the Court of Chancery “may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with a limited liability company agreement.”  6 Del. C. § 18-802. The question becomes, may the Court of Chancery dissolve a... More
  • Chancery Hearings and Trials to be Held Telephonically for 30 Days This morning, the Delaware Court of Chancery issued Standing Order No. 2 Concerning COVID-19 Precautionary Measures.  Pursuant to Standing Order No. 2, all Chancery hearings and trials will be conducted only telephonically for the next 30 days, absent a party requesting an in-person hearing and demonstrating imminent irreparable harm. Standing Order No. 2 replaces the Court of Chancery’s original standing order in its entirety, which was issued last week. A full list of the orders and related press releases can be found... More
  • The Delaware Judiciary’s Response to the Coronavirus (COVID-19) In light of the outbreak of the novel coronavirus (COVID-19), the Courts of the State of Delaware have issued various standing orders to institute precautionary methods in dealing with this worldwide pandemic.   A full list of the orders and related press releases can be found on the Delaware Judiciary’s website. A summary of the orders and press releases issued by each Delaware State Court is set forth below: Delaware Supreme Court Issued an Order dated March 13, 2020 declaring a Judicial Emergency, which... More
  • NantHealth Inc. Directors Dismissed from Suit, with Exception of Breach of Fiduciary Duty Claims Against Founder In the recent decision handed down by Chancellor Bouchard in the case of In re NantHealth, Inc. Stockholder Litigation, Lead C.A. No. 2018-0302-AGB (Del. Ch. Jan. 14, 2020), the Delaware Court of Chancery granted in part and denied in part a motion to dismiss filed by the director defendants of NantHealth, Inc. In this consolidated lawsuit, several NantHealth investors asserted that Patrick Soon-Shiong, a South African billionaire who invented the cancer fighting drug Abraxane, and two former executives and four directors, misled the public regarding... More
  • AmerisourceBergen Ordered to Produce Board Level Documents Relating to Opioid Investigations in Section 220 Books and Records Action In one of the more lengthy decisions issued in a books and records case commenced under 8 Del. C. § 220, Lebanon County Employees’ Retirement Fund, et al. v. AmerisourceBergen Corporation, Vice Chancellor Laster ordered  AmerisourceBergen Corporation (“AmerisourceBergen” or the “Company”) to make available for inspection board-level documents formally evidencing the directors’ deliberations and decisions and the materials that the directors formally received and considered (the “Formal Board Materials”) relating to whether AmerisourceBergen engaged in wrongdoing in connection with the distribution of opioids. ... More
  • Delaware Supreme Court Justices Confirmed by Delaware Senate The Delaware Senate recently confirmed Governor John Carney’s nominees to serve as the Chief Justice and Associate Justice of the Delaware Supreme Court.  In October of 2019, former Associate Justice Collins Seitz, Jr. was nominated by the Governor to replace Leo. E. Strine, Jr. as the Chief Justice,  in light of the latter’s retirement.  Tamika Montgomery-Reeves, who previously served as a Vice Chancellor of the Delaware Court of Chancery since 2015, was nominated to replace Seitz’s seat as an Associate... More
  • Chancery Approves Section 220 Books and Records Demand to Investigate Merger Process In the recent decision of Kosinski v. GGP, Inc., C.A. No. 2018-0540-KSJM (Del. Ch. Aug. 29, 2019), the Delaware Court of Chancery granted a stockholder’s books and records demand under Section 220 of the Delaware General Corporation Law (“DGCL”) to inspect the books and records of defendant GGP Inc. (“GGP”) in order to investigate potential mismanagement in connection with the merger of defendant corporation. Through the merger, GGP, a real estate company, was acquired by another real estate company owning roughly one-third of... More
  • 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
  • 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
  • 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
  • Liquidation Trustee’s Suit Against D&Os Falls Within Insured vs. Insured Exclusion In the recent decision of Indian Harbor Ins. Co. v. Zucker, 860 F.3d 373 (6th Cir. 2017), the Sixth Circuit Court of Appeals held that a liquidation trustee’s suit against the debtor’s former directors and officers (D&Os) falls within the “insured-versus-insured” exclusion in the debtor’s liability insurance policy. The liquidation trustee sued the D&Os for $18.8 million, alleging breach of fiduciary duties.  The insurance company filed a suit for a declaratory judgment that it had no obligation to cover any damages from... More
  • Samson Resources Preference Actions Filed in Delaware Starting on September 12, 2017, Peter Kravitz, as Settlement Trustee of the Samson Settlement Trust, filed approximately 293 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code. Samson Resources Corporation and its affiliated debtors filed voluntary petitions for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on September 16, 2015 under Chapter 7 of the Bankruptcy Code.  The Debtors were an onshore oil and gas exploration and... More