Shareholders’ derivative claims will survive a merger that extinguishes their ownership only if the merger’s sole purpose was to extinguish the derivative claims

by VeloCap Media | Sep 10, 2013 | Law Updates, LU13

Document: Arkansas Teacher Retirement System v. Countrywide Financial Corp. No. 14, 2013 (Del. September 10, 2013) The U.S. 9th Circuit Court of Appeals certified a question to the Delaware Supreme Court on the whether the fraud exception to Delaware’s...

If more than one provision in an operating agreement addresses an issue, which provision controls, and/or how the provisions work together must be clearly stated

by VeloCap Media | Sep 5, 2013 | Law Updates, LU13

Document: Edmond Costantini, et al. v. Swiss Farm Stores Acquisition LLC, C. A. No. 8613–VCG (Del. Ch. September 5, 2013) In this case, plaintiffs sought indemnification after Swiss Farm sued them for breach of fiduciary duty and lost the case based on laches. While...

In determining whether a case should be dismissed based on the equitable doctrine of laches, Delaware courts will not use the statute of limitations to define unreasonable delay if unusual conditions or extraordinary circumstances are present

by VeloCap Media | Aug 27, 2013 | Law Updates, LU13

Document: Levey v. Brownstone Asset Management LP, No. 551, 2012 (Del. August 27, 2013) The Delaware Supreme Court reversed the Court of Chancery, finding that, in the interest of justice, the doctrine of laches by analogy to the statute of limitations should not be...

An unfair process will not cause a deal to fall short of the entire fairness standard as long as the price is adequate

by VeloCap Media | Aug 16, 2013 | Law Updates, LU13

Document: In re Trados Incorporated Shareholder Litigation Consol. C.A. No. 1512–VCL (Del. Ch. August 16, 2013) Vice Chancellor Travis J. Laster found the 2005 sale of Trados Inc. entirely fair even though the directors’ failed to follow a fair process and the common...

A party’s waiver of claims cannot be considered “success” for indemnification purposes before a final decision in the case

by VeloCap Media | Aug 12, 2013 | Law Updates, LU13

Document: Huff v. Longview Energy Co., C.A. No. 8453–CS (Del. Ch. August 12, 2013) Chancellor Leo E. Strine, Jr., dismissed a complaint seeking indemnification because the claim was not yet ripe. Plaintiffs sought indemnification from Longview, a Delaware corporation...

The Court’s analysis highlights two important points that must be considered when preparing an LLC agreement: 1) if you want the payment of capital contributions to be tied to the percentage of ownership, you must specifically state this in the agreement; 2) your agreement should expressly modify fiduciary duties owed by the managing members — as permitted by the LLC Act — to avoid the application of corporate-like fiduciary duties.

by VeloCap Media | Aug 8, 2013 | Law Updates, LU13

Document: Grove v. Brown, C.A. No. 6793–VCG (Del. Ch. August 8, 2013) In Grove, a dispute arose among the four members of a limited liability company (“LLC”), who split into two camps. Camp A effected a freeze-out merger based on its belief that it owned a majority...