Delaware Transactional Law Updates

With limited exceptions, the Delaware Court of Chancery will honor provisions of alternative entity agreements that contract away the default rules of statutes, so parties should take care that they understand all the implications of such agreements

by The Delaware Counsel Group | Dec 9, 2013 | Law Updates, LU13

Document: Huatuco v. Satellite Healthcare, Civil Action No. 8465-VCG (Del. Ch. Dec. 9, 2013) A member of a Delaware limited liability company (the “LLC”) filed a complaint seeking to judicially dissolve the LLC under the Delaware Limited Liability Company Act (the...

Directors of Delaware corporations should be aware that common stock must be issued pursuant to a properly executed written instrument or the Court of Chancery will treat the stock as void, even if this leads to an inequitable result

by The Delaware Counsel Group | Dec 2, 2013 | Law Updates, LU13

Document: Boris v. Schaheen, C.A. No. 8160-VCN (Del. Ch., December 2, 2013) The purported directors and majority stockholders of Corporations A and Corporation B signed written consents removing a third director from the board, after which they filed an action...

The dissolution scheme under the Delaware General Corporation Law (the “DGCL”) does not time-bar claims by third parties against the dissolved corporation after a 10-year period, despite provisions stating that the corporation must set aside assets for claims likely to arise within 10 years

by The Delaware Counsel Group | Nov 26, 2013 | Law Updates, LU13

Document: Anderson v. Krafft-Murphy Co. Inc., No. 85, 2013 (Del. November 26, 2013) Tort claimants sought the appointment of a receiver for a dissolved Delaware corporation. The Court of Chancery did not appoint the receiver and the Delaware Supreme Court reversed and...

If an agreement purports to curtail the rights that a party would ordinarily have, it is important that precise and detailed language be used

by The Delaware Counsel Group | Nov 7, 2013 | Law Updates, LU13

Document: Quadrant Structured Products Co., Ltd., v. Vertin No. 338, 2012 (Del., Nov. 7, 2013) A suit was filed by a company holding long-term notes in an allegedly insolvent Delaware corporation.  The controlling company argued that the suit should be dismissed...

If a provision of a company’s operating agreement addresses a specific type of transaction, any dispute over the transaction is purely a matter of contract

by The Delaware Counsel Group | Oct 31, 2013 | Law Updates, LU13

Document: AM General Holdings, LLC v. The Renco Group, Inc., C.A. No. 7639-VCN, 2013 Del. Ch. Lexis 266 (Del Ch. Oct. 31, 2013) The Delaware Court of Chancery denied AM General’s motion for summary judgment regarding one of the counts in an action that accused...

Board actions will not be viewed by the Delaware Courts in isolation if shareholders plead sufficient facts that they are interrelated

by The Delaware Counsel Group | Oct 28, 2013 | Law Updates, LU13

Document: TVI Corporation v. Bernard Gallagher, C.A. No. 7798-VCP (Del Ch. October 28, 2013) The Court held that shareholders’ claims were not subject to dismissal for failure to make a demand on the board because they had sufficiently pleaded facts that a majority of...