Recently, the Delaware Supreme Court issued its much-anticipated decision in In re Match Group, Inc. Derivative Litigation, No. 368, 2022 (April 4, 2024), in which the Court reaffirmed certain venerable teachings on the standards of review that the Delaware courts will employ to review challenged transactions involving a controlling stockholder—including when and how controlling
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And . . . Yet Another Minute About Minutes
Over the years we have used this blog to highlight Delaware case law where the topic of corporate minutes has played a material role in the way the court has reviewed the actions of a board of directors. Those posts can be found here under the tag “minutes.”
Recently, The Honorable Leo E. Strine, Jr.…
A Searching Obligation of Disclosure Must Be Satisfied to Obtain MFW Deal Protection
On Monday in City of Dearborn Police and Fire Revised Retirement System (Chapter 23) v. Brookfield Asset Management Inc., the Delaware Supreme Court reversed the Court of Chancery in a case challenging a squeeze-out merger. The Court of Chancery had dismissed on the basis of the MFW cleansing, ruling that an effective special committee…
Directors Must Exercise Independent Business Judgment or Risk Losing Business Judgment Rule’s Protection
Much ink will be spilled in the circles of corporate law about Chancellor McCormick’s blockbuster opinion in Tornetta v. Musk, C.A. No. 2018-0408-KSJM (Del. Ch. Jan. 31, 2023), in which the Court invalidated a CEO’s executive compensation package worth $55 billion. A full discussion of the over-200-page opinion is beyond the scope of this…
Circle of Trust: When can a Corporate Director Share Confidential Documents with a Stockholder-Plaintiff?
Stockholders who suspect mismanagement or other fiduciary misconduct generally begin by investigating via a books-and-records demand in order to articulate the allegations for the complaint in a so-called “plenary” action. But, what happens if the stockholders have allies on the board itself? In Icahn Partners LP et al. v. Francis deSouza et al., C.A.…
Chancery Acknowledges Non-Competes Treated More Skeptically in Recent Decisions
The case Sunder Energy, LLC v. Jackson, C.A. No. 2023-0988-JTL relates to non-compete covenants contained in an LLC operating agreement. In November, the Court of Chancery denied a preliminary injunction enforcing the covenants. In Delaware, appeals to the Supreme Court are as-of-right, but only when a case is fully decided — a party…
Duty of Oversight of Officers–Post-McDonald’s Action in Court of Chancery
Nearly one year ago we reported in this blog on the Court of Chancery’s decision in In re McDonald’s Corp. S’holder Litigation, 289 A.3d 343 (Del. Ch. 2023), in which the court affirmatively held that officers of Delaware corporations owe duties of oversight (often called, Caremark duties), and specifically for matters that would fall within…
Twice-Tested Corporate Democracy
In late June, the Delaware Supreme Court issued in its decision in the second appeal of Coster v. UIP Companies, 2023 WL 4239581 (Del. June 28, 2023). As with their prior decision (255 A.3d 952 (Del. 2021)), the Court was reviewing a judgment in favor of the defendants on a challenge…
Court of Chancery: Taking a Public Stance is a Business Decision
This past Tuesday, the Court of Chancery held that causing a corporation to take a public stance on a matter of public controversy is a business decision for which the Board of Directors is protected by the business judgment rule in Simeone v. The Walt Disney Company, C.A. No. 2022-1120-LWW (Del. Ch. June 27,…
More on the Enforceability of Anti-Suit Covenants
We wrote about Vice Chancellor Laster’s decision in New Enterprise Associates 14, L.P. v. Rich, C.A. No. 2022-0406-JTL a few weeks ago. For a more comprehensive discussion of this landmark decision, please find a full Alert on the Duane Morris website.