News

Investment Firm Says $25M AOL Appraisal Suit Belongs in Delaware

Tom McParland | March 14, 2019

The suit, filed by Verition Partners Master Fund, accuses Chicago-based litigation services firm Coherent Economics of failing to disclose disparaging remarks that expert witness W. Bradford Cornell made about the firm's appraisal claims in a suit over the fair value of AOL Inc. after it was acquired by telecommunications giant Verizon in a $4.4 billion deal in June 2015.

Commentary

Chancery Applies Flexible Approach to 'Line of Business' Test in Corporate Opportunities

Barry M. Klayman and Mark E. Felger| March 13, 2019

Central to this post-trial opinion is his discussion regarding the contours of the “line of business” test and the need to apply the concept flexibly and sensibly when determining whether a corporation has an interest in a line of business.

News

Investor Sues Over Bristol-Myers' $74B Deal to Buy Cancer Drug Maker

Tom McParland | March 12, 2019

According to the complaint, Celgene and its directors held the deal out as a premium to its stockholders, despite allegedly rejecting a previous offer from Bristol-Myers with an aggregate value of $110 per share.

News

11 Lawyers Named to Tort Claims Committee in Talc Supplier's Bankruptcy

Amanda Bronstad | March 07, 2019

Many of the committee's members, including plaintiffs' attorneys Mark Lanier and Ted Meadows, brought the largest number of nearly 15,000 talcum powder lawsuits against talc supplier Imerys and Johnson & Johnson.

Commentary

Del. Courts Highlight Risk of 'Void' Provisions in Alternative Entity Agreements

Nathaniel J. Stuhlmiller| March 06, 2019

These decisions highlight the powerful effect, and potentially unintended consequences, of using a “void” provision in the governing documents of Delaware alternative entities.

Commentary

Chancery Denies Books-and-Records Inspection Due to Lack of 'Credible Suspicion'

Lewis H. Lazarus| March 06, 2019

Stockholders who seek to inspect the books and records of a Delaware corporation to investigate mismanagement merely have to demonstrate a “credible suspicion” that officers or directors have breached their fiduciary duties.

News

Investors Sue Over Alleged Adviser Conflicts in $218M Tesla Acquisition

Tom McParland | March 05, 2019

The class-action complaint, filed by Maxwell investor Davis Rodden, targeted the company's board and sought additional discloses about Barclays Capital Inc.'s current and prior engagements outside of the all-stock deal, which was announced last month.

News

Chancery Court Tosses Claims Against Winklevoss Twins Over $1.3M Magazine Investment

Tom McParland | March 04, 2019

Friday’s ruling, from Vice Chancellor Joseph R. Slights III, came in the brother's Winklevoss Capital Fund's 2018 lawsuit accusing one-time partner Stephen Shaw of mismanaging Treats!, which operates a print and digital magazine depicting nude and semi-nude photography of models and celebrities.

News

New Schnatter Complaint Takes Aim at Papa John's Poison Pill

Tom McParland | February 28, 2019

In a court filing made public earlier this week, Papa Johns founder John Schnatter said the plan prevented him from talking to other stockholders regarding "critical corporate matters," including a scheduled vote on the board's slate of nominees at the company's annual meeting in April.

Expert or Arbitrator—Who Decides? Chancery Court Clarifies Issue in 'Ray Beyond'

Richard L. Renck | February 27, 2019

The Delaware courts have been asked several times in the last few years to interpret contracting parties’ intent when they have relegated certain disputes to “an expert, not an arbitrator” as a form of alternative dispute resolution.

News

Third Circuit Rules FTC Suit Can't Challenge Past Conduct at Shire

Tom McParland | February 26, 2019

A three-judge panel of the appeals court upheld a Delaware district court ruling, which found that the FTC's 2017 suit came too late under Section 13(b) of the Federal Trade Commission Act, which requires the agency to show that a defendant "is violating, or is about to violate," the law with excessive filings meant to improperly suppress generic competition.

News

New Chancery Court Suit Targets Dell Over Stock Conversion Plan

Tom McParland | February 21, 2019

The suit is the latest challenge to the transaction, which converted shares tied to Dell's interest in a valuable computer visualization firm into shares that tracked the business as a whole.

Analysis

Data Breaches: An Expanding Frontier in Securities Class Actions

Mark D. Harris and Margaret A. Dale| February 21, 2019

Corporate and Securities Litigation columnists Mark D. Harris and Margaret A. Dale write: So-called “event-driven” securities class actions are on the rise, with data breaches representing one of the most significant categories of events driving this trend. How the courts will treat the proposed settlements that arise in these cases remains to be seen.

Sharp, Vizio Escape Infringement Lawsuit After Source Code Barred From Evidence

Tom McParland | February 21, 2019

Chief Judge Leonard P. Stark of the U.S. District Court for the District of Delaware last week ruled that plaintiff Wi-LAN Inc. could not rely on source code for allegedly infringing parts that Sharp and Vizio had incorporated into their televisions after years of delay in bringing it forward.

News

Investment Fund Led by Ex-Panera Bread CEO in Row Over Chain's Noncompete Agreements

Tom McParland | February 21, 2019

Act III Management said St. Louis, Missouri-based Panera was improperly seeking noncompetition agreements with three Panera employees, in a hiring dispute that exposed the tensions between Panera and the man that oversaw much of the company's growth.

Commentary

Del. Supreme Court Finds Emails May Be Subject to Production in Books-and-Records Actions

Albert H. Manwaring IV| February 20, 2019

Section 220 of the Delaware General Corporation Law permits a stockholder to inspect the books and records of a corporation, provided that the demand for inspection meets certain form and manner requirements, and the inspection is sought for a proper purpose—e.g., one reasonably related to the interests of stockholders.

Commentary

Master in Chancery Finds an Enforceable Equitable Mortgage Despite Defects in Execution

Barry M. Klayman and Mark E. Felger| February 20, 2019

In a recent case, Master in Chancery Patricia W. Griffin recommended that the Court of Chancery grant a creditor’s motion for summary judgment and order the entry of personal and in rem judgments against its debtors based on a finding that the undisputed facts gave rise to an enforceable equitable mortgage.

News

Del. Supreme Court Upholds Dismissal in AbbVie Inversion Case

Tom McParland | February 19, 2019

A three-judge panel of the high court Monday upheld, by order, a Chancery Court decision from July that dismissed the suit on demand futility grounds, finding that the directors did not face a substantial risk of liability for their role in scuttling the $55 million deal.

Analysis

'Daimler' Strikes Again

David Paul Horowitz and Lukas M. Horowitz| February 19, 2019

In their Burden of Proof column, David Paul Horowitz and Lukas M. Horowitz discuss the recent decision in 'Aybar', in which the Second Department confronted the question of whether a foreign corporation’s registration to do business in New York under BCL §§1301(a) and 1304(a)(6) constitutes consent to general jurisdiction in New York. The decision effectively shuts the door, for now, to a New York court’s exercise of general jurisdiction over a corporate defendant which is neither incorporated, nor maintains it principal place of business, in New York.

News

Judge Tosses Tort Claims Stemming From Deadly Plane Crash in Africa

Tom McParland | February 14, 2019

In its complaint, Lima Delta attributed the crash to faulty breaks and alleged that Gulfstream Aerospace Corp., the Georgia-based aircraft-manufacturer, knew about the defect but failed to report it to federal aviation regulators.

News

Executive Order on AI Could Spur Law Firms to Take Note

Dan Clark| February 13, 2019

Jeremy Elman, a partner at Dorsey & Whitney in Palo Alto, said with federal guidance on how AI can be used law firms may be more likely to find ways to adopt the technology.

Commentary

Will 'Salzberg' Curtail Arbitration Provisions in Corporate Charters and Bylaws?

James L. Hallowell and Mark H. Mixon Jr.| February 13, 2019

The Court of Chancery’s holding in Salzberg offers what might seem to be a cautious interpretation of the reach of Delaware corporate law.

News

AbbVie Ordered to Quickly Produce Docs in Humira Infringement Suit

Tom McParland | February 11, 2019

The Feb. 8 ruling, from U.S. Magistrate Judge Richard A. Lloret, came in response to Boehringer’s second set of production requests pertaining to its "unclean hands" defense in Abbvie's infringement suit, which accuses the German drugmaker of trying to illegally capitalize on Humira's clinical success.

News

Alphabet Sued for Records Related to Data Breach, Alleged Sexual Misconduct at Google

Tom McParland | February 08, 2019

The lawsuit, made public late Thursday, alleged that there was a "credible basis" to suspect mismanagement at the Mountain View, California-based conglomerate, after a pair of news reports brought the controversies to light last October.

News

Jury Awards $155M in Damages for Infringement of Bayer Hemophilia Treatment

Tom McParland | February 07, 2019

According to court records posted Tuesday, the Wilmington jury rejected Baxalta's arguments that Bayer's patent was invalid after six days of trial in the case, which was filed in December 2016, when Baxalta was still owned by Irish biopharmacuetical firm Shire.

Commentary

Court of Chancery Reaffirms Directors’ Broad Books-and-Records Inspection Rights

James H. S. Levine and Douglas D. Herrmann| February 06, 2019

Section 220(d) of the Delaware General Corporation Law permits a director to inspect a company’s books and records for purposes reasonably related to the director’s position as a director.

Analysis

Can Employers Enforce Non-Competes Against California Employees?

Jeffrey S. Klein and Nicholas J. Pappas| February 05, 2019

Employment Law columnists Jeffrey S. Klein and Nicholas J. Pappas analyze 'NuVasive', and consider the extent to which §925 may provide employers with operations in California an opportunity to use the Represented Employee Exception to enforce non-competition agreements against California employees.

Commentary

Demystifying Phantom Stock: How It Works and the Best Way to Structure a Plan

Maxwell Briskman Stanfield| February 04, 2019

Despite the ghostly name, phantom stock is not quite as mysterious as it sounds. In essence, phantom stock is a deferred compensation plan that gives an employee a stake in a company’s success without conferring an actual ownership interest in the company.

News

Judge Says Facebook Provided 'Terrible Service to Its Customers' in Cambridge Analytica Snafu

Ross Todd | February 01, 2019

U.S. District Judge Vince Chhabria in San Francisco stopped short of saying whether he thought plaintiffs pursuing privacy claims against the company had viable claims.

News

Plaintiffs Get Second Chance in Derivative Case Stemming From California Oil Spill

Tom McParland | February 01, 2019

Vice Chancellor Tamika Montgomery-Reeves ruled Thursday that the complaint from investor Inter-Marketing Group USA failed to establish demand futility by alleging that a majority of the Plains board likely faced personal liability in connection with the spill.

News

Navient to Face Investor Claims Over Student Loan Reporting

Tom McParland | January 30, 2019

A Delaware federal judge ruled Tuesday that Navient Corp., one of that nation's largest servicers of student loans, must face claims that it had pumped up its stock price by hiding serious problems with its loan portfolio and other risks from investors.

Commentary

Equitable Defenses Fall Within Narrow Scope of Section 225 Actions and Must Be Considered

Justin T. Kelton| January 30, 2019

The Delaware Court of Chancery in Brown v. Kellar, recently issued a decision clarifying the scope of actions under 8 Del. C. Section 225, which provides a procedure to determine issues that pertain to actions to elect or remove a director or officer.

News

Palantir Must Turn Over Director Emails in Fight With Early Investor, Del. Supreme Court Rules

Tom McParland | January 29, 2019

In a 49-page opinion for a unanimous court, Chief Justice Leo E. Strine said that Palantir, which specializes in big data analytics, had a history of not observing corporate formalities and conducted most of its board-level business electronically, making the emails necessary to satisfy KT4's demand.

News

Ford Investor Sues for Access to Records on Employee Harassment Allegations

Tom McParland | January 29, 2019

The books-and-records suit, filed Monday afternoon in Delaware Chancery Court, alleged that Ford and its directors had failed to provide information related to allegations from Ford employees, which resulted in two multimillion settlements, including a $10.1 million payout in 2017 to resolve claims by women and black employees at its two Chicago plants.

Patent Law Forecast for 2019 and Beyond: Challenges and Opportunities

Ken Seddon| January 24, 2019

A new year brings with it inevitable changes, and along with those changes comes a degree of uncertainty, particularly given the volatility of the global economy. Trade disputes, posturing and market fluctuations all portend a 2019 that can have a significant impact on intellectual property.

News

Caterpillar Asks US Judge to Toss Suit Alleging Antitrust Scheme

Tom McParland | January 23, 2019

In a brief filed Tuesday in Delaware federal court, lawyers for Caterpillar Inc. said the four-year-old suit from International Construction Products had failed to make any specific allegations linking the Illinois-based manufacturer of construction and mining machinery to an alleged plot to suppress competition and fix prices.

Commentary

Court Rejects Use of the Implied Covenant of Good Faith and Fair Dealing to Preserve LLC Members’ Exit Sale Rights

K. Tyler O’Connell| January 23, 2019

The implied covenant of good faith and fair dealing inheres in all contracts governed by Delaware law. In some circumstances, the implied covenant may apply to fill “gaps” in an agreement consistent with the parties’ reasonable expectations at the time of contracting.

News

Chancery Court Approves $11M Settlement in Zynga Insider Trading Suit

Tom McParland | January 22, 2019

Chancellor Andre G. Bouchard on Jan. 18 approved the agreement, under which Zynga's insurers will pay the San Francisco-based firm $12 million on behalf of the defendants.

News

Del. High Court Overturns Forced Sale of William Koch's Oxbow Carbon

Tom McParland | January 17, 2019

The Delaware Supreme Court on Thursday reversed a Chancery Court decision forcing billionaire William I. Koch to sell his $3 billion energy company so that two private equity firms could recoup their investment in the company.

News

Moonves Plans to Battle CBS in Arbitration Over $120M Severance

Tom McParland| January 17, 2019

CBS said in a filing with the SEC that Moonves had informed the company Wednesday that he intended to use a binding arbitration provision in his contract to try to recover his "golden parachute" after the company determined there were grounds to fire him for cause.

Securities Litigation in 2019: Predictions and Speculations

John C. Coffee Jr.| January 16, 2019

In his Corporate Securities column, John C. Coffee Jr. writes: The results are now in for 2018, and, in terms of securities class actions, it was another near-record year with a bumper crop of lawsuits.

Commentary

Chancery Finds 'Mutual General Release' to Be Not All Encompassing

Barry M. Klayman and Mark E. Felger| January 16, 2019

A recent opinion by Vice Chancellor Tamika Montgomery-Reeves illustrates the pitfalls in not specifically addressing the scope of “mutual general releases” when agreeing to settle litigation.

News

Schnatter Granted Access to Papa John's Records Related to Ouster, Bouchard Rules

Tom McParland | January 15, 2019

Chancellor Andre G. Bouchard ruled Tuesday that John Schnatter, the company's largest stockholder, was entitled to books and records regarding the company's decision to terminate his employment last July, after Forbes reported that he had used the N-word during a company training call.

News

Chancery Court Blocks Direct Appeal of Directors' Liability for Insider Trading in Fitbit IPO

Tom McParland | January 14, 2019

In a 12-page order, Vice Chancellor Joseph R. Slights III stood by his Dec. 14 opinion, which found that two of Fitbit's outside directors could potentially face liability for suspicious stock sales made by venture capital funds under their control.

News

Nutrisystem Investors Sue for Details on $1.3B Sale to Health Company

Tom McParland | January 10, 2019

In an 18-page complaint, shareholders Thursday questioned analyses by Nutrisystem's Evercore Group financial advisers and said that the cash-and-stock deal, announced in December, had undervalued the company.

Analysis

Realignment of Corporate Defendant, Motion to Suppress, FTCA Action

Harvey M. Stone and Richard H. Dolan| January 10, 2019

In their Eastern District Roundup, Harvey M. Stone and Richard H. Dolan discuss three recent decisions, one which declined to realign a corporate defendant as a plaintiff in a diversity action; another which dealt with various issues in connection with a motion to suppress evidence in a criminal case; and the last which dismissed an action brought under the Federal Tort Claims Act relating to a murder in Panama.

Commentary

Court Rejects Fraud-Based and Uncapped Indemnification Claims of Great Hill Partners

Peter N. Flocos and Joanna Diakos| January 09, 2019

In a case arising out of the purchase by Great Hill Partners of Plimus (now known as BlueSnap, Inc.), the Delaware Court of Chancery, after a 10-day trial and extensive post-trial briefing and oral argument, recently rejected all of the fraud-based claims made by Great Hill against the two founders of Plimus.

News

Del. Judge Weighs Asking High Court to Eye Directors' Liability for Insider Trading in Fitbit IPO

Tom McParland | January 08, 2019

A Delaware judge is mulling a request that would fast-track state Supreme Court consideration of whether directors can be held liable in derivative litigation for trades that were executed by funds under their control.

News

High Court Asks SG to Weigh in on Hot-Button Patent Issue in HP Case

Scott Graham| January 07, 2019

The question in HP v. Berkheimer is whether patent eligibility is always a matter of law that can be resolved at an early, less costly stage of litigation.

News

Third Circuit Denies Bid to Fast Track Appeal in $1.2B Venezuela Arbitration Dispute

Tom McParland | January 03, 2019

Judge Luis Felipe Restrepo of the U.S. Court of Appeals for the Third Circuit on Wednesday ruled that oral argument on Petróleos de Venezuela S.A. appeal in the case would proceed normally.

Commentary

Defending Officers and Directors From a Lawsuit by the Company

Edward T. Kang| January 03, 2019

When a corporate director or officer is sued by a third party for alleged misconduct carried out in her capacity as director/officer, the company generally indemnifies the director/officer by defending her against the lawsuit.

Commentary

Highlights of Key Decisions From Delaware’s Supreme Court and Court of Chancery

Francis G.X. Pileggi and Chauna A. Abner| January 02, 2019

For the 14th year, we have created an annual list of important corporate and commercial decisions of the Delaware Supreme Court and the Delaware Court of Chancery.

Analysis

Recent Restructurings in the Pharmaceutical Industry

Edward E. Neiger| December 28, 2018

In this issue of the Bankruptcy Update, Edward E. Neiger focuses on recent restructurings in the pharmaceutical industry, including Aralez Pharmaceuticals, Egalet Corporation and Synergy Pharmaceuticals.

News

Shifting Appraisal Landscape Sets Up New Developments for 2019

Tom McParland | December 28, 2018

The Delaware Court of Chancery in 2018 sought to provide new guidance in appraisal litigation after two landmark rulings from the state's high court set a clear preference for deal price in determining fair value in corporate mergers.

News

Third Circuit Revives Investor Claims Against M&T Bank

Tom McParland | December 27, 2018

The panel found M&T Bank did not properly disclose issues surrounding consumer violations and its anti-money laundering compliance.

News

Google Settles Suit Alleging Age Bias in Hiring Practices

Erin Mulvaney | December 21, 2018

Google deems only 20.5 percent of onsite job candidates to be qualified for an employment offer, according to court filings in the case.

News

Laster Foils Corporations' Bid to Limit Forum in Securities Act Claims

Tom McParland | December 19, 2018

The decision was a win for plaintiffs, who will now have greater flexibility in deciding where to file lawsuits alleging fraud that occurred during companies' initial public offerings

Commentary

Chancery Refuses TRO That Would Act as Prior Restraint on Speech

Barry M. Klayman and Mark E. Felger| December 19, 2018

In CapStack Nashville 3 v. MACC Venture Partners, Vice Chancellor Sam Glasscock III considered whether equity had jurisdiction to entertain a temporary restraining order that would have the effect of a prior restraint on speech.

Commentary

Delaware Cracks Down on Discovery Abuse

Edward M. McNally| December 19, 2018

The Delaware Court of Chancery has now decided that its past guidance on how to conduct discovery has not cured this problem. It is time, instead, to impose increased sanctions for the most often repeated discovery abuses.

News

CBS' Denial of Moonves' $120M Severance Could Tamp Down Shareholder Litigation

Tom McParland | December 18, 2018

There remains the possibility that Moonves, who has been accused of forcing himself on women and retaliating against those who rebuffed his advances, could sue CBS to recover his "golden parachute."

News

Suit Accusing Fitbit Directors of Insider Trading Clears Hurdle in Del. Chancery Court

Tom McParland | December 14, 2018

The lawsuit alleges that Fitbit's brass discovered widespread issues with the San Francisco-based fitness company's heart-rate monitoring technology as early as January 2015 but failed to disclose the scope and severity of the problem before its IPO that November, which raised $416 million.

News

NYC Investment Firm Entitled to Insurance Payment on $14.5M in Legal Costs, Del. Court Says

Tom McParland | December 13, 2018

Judge William C. Carpenter said Wednesday that AR Capital, a New York-based investment and advisory firm, was covered under VEREIT's insurance policy for management services it had provided to VEREIT before the errors were discovered in late 2014.

News

Moore, Del. Supreme Court Justice and Seminal Voice on Corporate Law, Dies at 83

Tom McParland | December 13, 2018

Former state Supreme Court Justice Andrew G.T. Moore II, regarded as one of the seminal voices in Delaware corporate law, died Monday at the age of 83.

Analysis

Mootness Fees in Disclosure-Focused Deal Litigation

Joseph M. McLaughlin and Shannon K. McGovern| December 12, 2018

In their Corporate Litigation column, Joseph M. McLaughlin and Shannon K. McGovern write: “Mootness fees” to plaintiffs’ counsel after a voluntary dismissal have become a standard feature of deal litigation resolved before a stockholder motion to enjoin a transaction based on alleged proxy disclosure deficiencies is decided. The authors explain the important differences between disclosure-only settlements and mootness fees when resolving such litigation and discuss a recent relevant decision currently on appeal to the Seventh Circuit.

Commentary

Del. Courts Must Grapple With Efforts to Impose Fiduciary Duties on Investors Exercising Contractual Rights

Andrew W. Stern, James Heyworth and Benjamin F. Burry| December 12, 2018

The Chancery Court will continue to face novel theories of controlling stockholder liability based on contract rights, and Delaware’s ability to impose clear limits on when an investor’s contract rights render it a fiduciary to the company will have significant consequences for corporate finance and strategic investments under Delaware law going forward.

Commentary

Chancery Finds Inadequate Disclosure in Connection With a Tender Offer Prevents Dismissal of a Class Action Complaint

Lewis H. Lazarus| December 12, 2018

Once a transaction closes, if a stockholder cannot allege that a majority stockholder vote approving a transaction was uninformed or coerced, then the court will dismiss a complaint attacking the fairness of the transaction under the business judgment standard of review.

News

Massive Equifax Data Breach Was Preventable: Congressional Report

Dan Clark | December 11, 2018

Data privacy and cybersecurity attorneys interviewed Tuesday generally agreed that Equifax could have done more to prevent the 2017 data breach, but at least one prominent data privacy and data security lawyer said that the report was unfair because the government has done little to help protect U.S. companies and organizations from bad actors.

News

Del. Chancery Court Tosses $300M Biotech Lawsuit as Untimely

Tom McParland | December 10, 2018

Vice Chancellor Tamika Montgomery-Reeves said Monday that Newark-based biotech firm iBio Inc. had filed its suit against Fraunhofer-Gesellschaft zur Förderung der Angewandten Forschung outside of the three-year statute of limitations.

News

CBS Investors Scheduled to Meet as Moonves Report Looms

Tom McParland | December 07, 2018

The board of CBS Corp. is expected to receive a report detailing former CEO Les Moonves’ attempts to destroy evidence and mislead attorneys investigating allegations that he had sexually harassed and abused women for decades, according to The New York Times.

News

Del. Supreme Court Affirms Fresenius' Ability to Scrap $4.3B Deal Based on 'Adverse Change'

Tom McParland | December 07, 2018

The Chancery Court's Oct. 1 decision was the first in the state to allow a potential buyer to escape its merger obligations based on a finding that one had occurred.

News

Molina, Saul Ewing Associate, Named New Master in Chancery

Tom McParland | December 06, 2018

Selena E. Molina, a 2013 graduate of Widener University Delaware Law School, will replace Morgan T. Zurn, who was recently confirmed to fill one of two new judgeships on the Chancery Court.

News

Health Care Firm Says 'Adverse Change' Allows It to Walk Away From $4.3B Acquisition

Tom McParland | December 05, 2018

An attorney for Fresenius SE & Co. on Wednesday defended a landmark Chancery Court ruling that allowed the German health care firm to walk away from its $4.3 billion deal to buy generic drugmaker Akorn Inc. based on a material adverse change in Akorn's business, saying the decision was well-rooted in evidence presented during an expedited trial.

News

CEO Resigns in Wake of Court's Finding of Fraud in $115M Sale of Payment Processing Co.

Tom McParland | December 04, 2018

Isreali-based media firm Taptica International Ltd said late Monday that Hagai Tal was resigning after Vice Chancellor Sam Glasscock III in his opinion found that the executive had hidden key information from buyer Great Hill Equity Partners in order to position himself as chief executive of post-merger company BlueSnap Inc.

News

Venezuela Makes Initial Payment on $1.2B Arbitration Award

Tom McParland | December 03, 2018

Canadian mining company Crystallex said in a court filing last week that Venezuela on Nov. 23 completed an up-front payment of $425 million, on top of $75 million that it had already turned over, and plans to satisfy the rest of judgment by Jan. 10.

News

Third Circuit Says Bankruptcy Judge Lacked Power to Transfer Trustee's Claims to District Court

Tom McParland | November 30, 2018

In a precedential opinion, a three-judge panel of the appeals court rejected the trustee's argument that bankruptcy courts are included in the definition of "courts" under federal law.

News

Morrison & Foerster, Ashby Recover $31M in Universities' Royalty Spat

Scott Graham | November 28, 2018

The University of Wisconsin allocated Washington University 1 percent of a royalty stream on a kidney treatment the two schools patented. Apparently the figure should have been closer to 30 percent.

News

Skechers Investor Sues Board in Del. Faulting Disclosure of Costs

Tom McParland | November 28, 2018

A derivative suit filed Tuesday in Delaware federal court accused the directors of Skechers USA Inc. of hiding skyrocketing operational costs from investors at a time when the company was experiencing rapid growth in international sales.

Commentary

Delaware Takes the Lead in Litigation Reform

Edward M. McNally| November 28, 2018

The Delaware courts are leading the way to cure the problems that litigation critics complain of most. Recent Delaware Court of Chancery decisions are yet another example of that leadership. We begin to show how that is being done, by outlining the perceived problems.

Counsel’s Guide to AI in the Board Room

Jim Ryan and Tim Harris| November 27, 2018

While there are a myriad of legal issues that AI touches, from privacy to liability standards, the implementation of AI in the board room is fundamentally a question of corporate governance. It is therefore important for corporate counsel to keep a clear analytical framework in mind in order to facilitate their board’s responsible deployment of AI without simply throwing up road blocks.

News

Denn Sues to Shut Down LLCs Linked to Backpage.com Sex Trafficking

Tom McParland | November 26, 2018

The complaint, filed Nov. 19, asked the court to cancel the companies' certificates of formation using a new provision of Delaware's Limited Liability Company Act.

News

Slights Greenlights Shareholders’ Challenge to $256M Buyout of Telecom Firm

Tom McParland | November 21, 2018

The ruling refused the Tangoe board's motion to dismiss a shareholder class action from former Tangoe investors who claim they were shortchanged in the company's April 2017 sale to Marlin Equity Partners.

News

Qualcomm Avoids Ruling on Patent Exhaustion

Scott Graham | November 21, 2018

U.S. District Judge Gonzalo Curiel says he lacks jurisdiction to rule after Qualcomm promises not to sue over nine patents identified by Apple.

News

Investors Resist Facebook's Bid to Dismiss Cambridge Analytica Data Breach Suit

Tom McParland | November 20, 2018

In a Chancery Court filing made public Monday, plaintiffs argued that deep conflicts on Facebook exposed the Facebook directors to serious liability for their role in allegedly hiding from users, investors—and the U.S. Congress—Facebook’s practice of sharing private data with outside parties.

News

Investors Resist Facebook's Bid to Dismiss Cambridge Analytica Data Breach Suit

Tom McParland | November 20, 2018

Plaintiffs argue in a Chancery Court filing made public Monday that deep conflicts exposed the Facebook directors to serious liability for their role in allegedly hiding from users, investors—and the U.S. Congress—Facebook's practice of sharing private data with outside parties.

News

David's Bridal Taps Debevoise, Young Conaway to Handle Chapter 11 Bankruptcy

Tom McParland | November 19, 2018

The dress retailer filed for bankruptcy Monday morning in U.S. Bankruptcy Court for the District of Delaware, with a deal to keep its stores open during restructuring.

News

Spacecraft Builder Appeals Del. Ruling Upholding $4M Award in Contract Case

Tom McParland | November 19, 2018

Moon Express said last week in court papers that it was challenging the Oct. 15 decision from U.S. Chief Judge Leonard P. Stark.

News

Third Circuit Tosses Appeal in Challenge to Fannie, Freddie Bailout Repayment

Tom McParland | November 15, 2018

A federal appeals court has rejected a shareholder appeal in a lawsuit challenging the U.S. government’s ability to seize all of the quarterly profits generated by Fannie Mae and Freddie Mac after the companies’ bailout amid the 2008 financial crisis.

News

Bouchard Tosses Derivative Suit Over CEO's Stock Repurchases

Tom McParland | November 15, 2018

Chancellor Andre G. Bouchard said that while Richardson Electronics' board did mislead plaintiff Steven H. Busch in the run-up to the litigation, it was unclear whether Busch had actually relied on those representations in deciding whether to make a demand that the directors consider pursuing their own litigation.

Delaware Jury Hands Bio-Rad $24 Million Patent Infringement Verdict

Scott Graham| November 15, 2018

A Delaware jury found that 10x Genomics infringed all seven asserted claims related to droplet microfluidic technology.

Analysis

Dual Class Stock: The Shades of Sunset

John C. Coffee Jr.| November 14, 2018

Corporate Securities columnist John C. Coffee Jr. writes: The most important issue in corporate governance today is dual class capitalization, and the most important recent development is the petition submitted on Oct. 24, 2018 by the Council of Institutional Investors (CII) to both the New York Stock Exchange and Nasdaq, asking them to place a “sunset” on differentials in voting rights.

Commentary

Chancery Provides Further Guidance on the Measurement of Synergies in Appraisal Actions

P. Clarkson Collins Jr.| November 14, 2018

The Delaware Supreme Court’s two recent decisions in Dell and DFC strongly endorsed the application of market efficiency principles in appraisal actions, and gave virtually controlling weight to the deal price as the “best evidence” of a company’s fair value where a robust sales process was conducted against the backdrop of a well-functioning market for the target’s stock.

News

Federal Judge Approves $9M Settlement in Allergan 'Product-Hopping' Suit

Tom McParland | November 13, 2018

A federal judge in Delaware gave final approval Tuesday to a $9 million class-action settlement in Hartig Drug Co.'s antitrust suit against Allergan, after an appeals court in 2016 revived claims that Allergan had tried to suppress generic versions of its eye-care products.

News

Federal Circuit: No Assignor Estoppel in PTO Validity Proceedings

Scott Graham | November 09, 2018

In the Cisco-Arista feud, Chief Judge Sharon Prost rules that the equitable doctrine forbidding an inventor from selling a patent and then attacking its validity can't be squared with the America Invents Act.

You Can’t Unring the Bell: Costly Waivers in LLC Operating Agreements

Laura A. Colca and Ryan W. McNagny| November 09, 2018

In a recent decision, the Delaware Court of Chancery reaffirmed the policy of Delaware and many other states, including New York, of enforcing broad contractual waivers of fiduciary duties and demonstrated the importance of carefully negotiating contractual rights and obligations when forming or investing in a limited liability company.

Investor, Beware: Was Your Fund Really Formed in an Investor Friendly Forum?

Jeremy Deutsch| November 09, 2018

Few investors consider the legal implications associated with the investment managers’ choice of entity and the state in which that entity was formed and what all that might have to do with their investment. Those choices may have significant ramifications.

News

Del. Supreme Court Vacates $17M Judgment in Contract Dispute Over 'Metal Cards'

Tom McParland | November 08, 2018

A three-judge panel of the high court said that CompoSecure would have another chance to argue that its contract with CardUX was void and unenforceable under New Jersey law.

Commentary

When Noncompete Agreements Involve Competing Laws

Edward T. Kang and Kandis L. Kovalsky| November 08, 2018

These days, it is common for companies headquartered or principally located in one city and state to have multiple offices and employees throughout many cities and states in the country, and even the world.

Commentary

Adviser-Consultants Held Not 'Other Professionals' for Purposes of Section 327(a) of Bankruptcy Code

Barry M. Klayman and Mark E. Felger| November 07, 2018

Two recent decisions by separate judges of the Delaware Bankruptcy Court have addressed the question of whether persons providing services to debtors relating to the disposition and monetization of inventory, real estate, intellectual property and other estate assets are “professionals” and must be retained under the strictures of Section 327(a) of the Bankruptcy Code.

News

Investors Sue to Block Sonic's Proposed $2.3B Deal to Take Company Private

Tom McParland | November 05, 2018

A shareholder of Sonic Corp. has sued in Delaware federal court to halt the drive-in fast food company's $2.3 billion bid to take the company private, alleging that the board withheld key financial data about the deal.

News

Del. Judge Names Lead Plaintiff in Class Action Stemming From $2B Advance Auto Parts Deal

Tom McParland | November 02, 2018

A Mississippi retirement system on Friday won a three-way fight to serve as lead plaintiff in a securities class action against Advance Auto Parts Inc. stemming from its $2 billion purchase of General Parts in 2011.