The Right to Remove Directors “With or Without Cause” Cannot Be Contractually Eliminated But For Two Limited exceptions

by VeloCap Media | Jan 27, 2016 | Law Updates, LU16

In In re Vaalco Energy Shareholder Litigation., a bench ruling, the Court of Chancery invalidated provisions found in the certificate of incorporation and bylaws of a Delaware corporation that permitted directors to be removed only “for cause”.  Generally, the...

The Proper Way to Draft “Put Right” Provisions and Foreclose Valuation Challenges

by VeloCap Media | Dec 30, 2015 | Law Updates, LU15

PECO Logistics, LLC v. Walnut Investment Partners, L.P., C.A. No. 9978-CB (December 30, 2015) The Court of Chancery was asked to interpret a “Put Right” provision (the “Put Right”) in an LLC Operating Agreement, which provided: “During the period that is between 30...

Bad Business: The Term “Business” in an Indemnification Provision is Only as Broad as its Definition

by VeloCap Media | Dec 23, 2015 | Law Updates, LU15

Tulum Management USA LLC v. Casten, C.A. No. 11321-VCN (December 23, 2015) The Court of Chancery examined the following indemnification language in an LLC Operating Agreement: The Company shall “indemnify each Manager for all costs, losses, liabilities and damages...

Buyers Beware: A closing conditioned on the absence of threatened litigation Does Not protect from the reservation of potential litigation

by VeloCap Media | Dec 3, 2015 | Law Updates, LU15

Rexam v. Berry Plastics Corporation, C. A. No. 10596-VCN (December 3, 2015) The Court of Chancery examined a closing condition that there be “no pending or threatened legal or administrative action” related to an Equity Purchase Agreement pursuant to which the buyer...

Protect against fraud claims related to transaction documents

by VeloCap Media | Nov 24, 2015 | Law Updates, LU15

Prairie Capital III, L.P. v. Double E Holding Corp., C.A. No. 10127-VCL (November 24, 2015) The Court of Chancery dismissed claims of fraud in connection with the sale of a portfolio company from one private equity firm to another.  The buyer claimed that the seller...

Contractual Advancement Claims are Second to None

by VeloCap Media | Nov 20, 2015 | Law Updates, LU15

Tulum Management USA LLC v. Casten, C.A. No. 11321-VCN (November 20, 2015) The Delaware Court of Chancery weighed the policy of resolving all claims related to a dispute in the court in which an action is first filed against Delaware’s policy of summarily resolving...