The Delaware Court of Chancery Undertakes Exacting Calculations of Equitable Damages and Will Award Tens of Millions of Dollars? Yes, It Does That, Too.

The Delaware Court of Chancery is of course a court of equity, focusing often on governance and contractual rights. The Court of Chancery also periodically issues damages opinions, and on May 28, 2024, Vice Chancellor Lori Will did just that in Brown v. Matterport, Inc.  At issue in Matterport was whether the plaintiff stockholder—following an earlier trial ruling that the defendant corporation had wrongfully (albeit in good faith) prohibited the stockholder from selling his shares—was entitled to damages and, if so, the proper method for computing damages. Vice Chancellor Will held that damages were appropriate based on the facts at issue, and in issuing a damages award of approximately $79 million, the Court undertook a rigorous approach in determining both the appropriate method to compute damages as well as the inputs for that calculation.


Sunshine Breaking Through the Clouds: Delaware Supreme Court Sheds Light on Standard of Review for Challenges to Advance Notice Bylaws

On Thursday, the Delaware Supreme Court issued a long-awaited decision regarding the validity and enforceability of certain provisions in a company’s advance notice bylaws.  The Kellner v. AIM Immunotech Inc. decision clarifies how the Delaware courts will evaluate claims challenging an advance notice bylaw.  Critically, it confirms that different standards attach when a plaintiff challenges (i) the language of a company’s bylaw (a so-called facial or validity challenge) in the abstract, absent a proxy contest versus (ii) a board’s decision to adopt, amend, or enforce an advance notice bylaw during a proxy contest (a so-called as applied challenge).  This decision provides helpful guidance to practitioners and will hopefully limit the wave of facial challenge litigation that followed the Kellner trial court ruling.


Kitchen-Sink Pleading Will Not Fly In Delaware

Vice Chancellor Glasscock recently affirmed in BV Advisory Partners, LLC v. Quantum Computing Inc., C.A. No. 2022-0719-SG, that more is not always better when it comes to pleading claims.  In ruling on motions to dismiss filed by all defendants, the Court dismissed six Defendants for failure to plead personal jurisdiction under Rule 12(b)(2), and also dismissed eight of ten causes of action pled against the remaining Defendants for failure to state a claim under Rule 12(b)(6).  In each of the Court’s holdings dismissing both Defendants and causes of action (summarized below), the Court identified the various ways in which Plaintiff relied to its detriment on conclusory allegations and impermissible bootstrapping.  This ruling serves as a reminder to litigants that the Court of Chancery is well-equipped to strip down complaints bloated by tangential claims and theories of liability that are not sufficiently supported by alleged facts.


Director Wins In Claim of Improper Removal – But Still Loses

In Barbey v. Cerego, Inc., the Delaware Supreme Court affirmed a post-trial judgment denying relief to the plaintiffs in a Section 225 action, despite what the court called the “unusual and troubling circumstances of [the] case.”  The Supreme Court’s decision illustrates the limitations of Section 225 proceedings.  The underlying Court of Chancery decision shows that voiding board actions may in some cases have no practical effect, even when a board acts in the context of entity-altering corporate transactions.


Sidley Perspectives on M&A and Corporate Governance

Sidley is pleased to share the June 2024 issue of Sidley Perspectives on M&A and Corporate Governance, a quarterly newsletter designed to keep you current on what we consider to be the most important legal developments involving M&A and corporate governance matters.


Five Delaware Cases All Venture Capital Players Should Know

Now and then this blog publishes compendiums of bedrock decisions and key principles of which M&A and Corporate Governance practitioners, and their clients, should be aware (e.g., here and here).  This post takes the opportunity to highlight five relatively recent and important decisions that have shaped Delaware legal practice and discourse involving venture capital investment.  Counsel representing investors and other players in emerging growth companies should familiarize themselves with this digest.


Even After Multiplan, Pleading Standards Still Have Teeth in SPAC Cases

In 2022, the Delaware Court of Chancery decided In re MultiPlan Corp. S’holders Litig., 268 A.3d 784 (Del. Ch. 2022) (“Multiplan”), a landmark case setting the legal framework for assessing claims that the directors of a Special Purpose Acquisition Company (“SPAC”) breached their fiduciary duties in connection with “de-SPAC” mergers. Given the popularity of de-SPAC mergers, in which the SPAC merges with a private target company and takes it public, the Delaware courts have been faced with a series of cases initiated by public stockholders who did not redeem their shares at the time of the merger but became unhappy when the post-merger public companies underperformed. The focus of those cases is the redemption right: whether stockholders in the SPAC were properly informed when they made the critical decision at the time of the merger to either redeem their shares or remain invested in the newly public company.




Meet the Team

<a target=‘_blank’ href="">Andrew W. Stern</a>

Andrew W. Stern

New York
<a target=‘_blank’ href="">Charlotte K. Newell</a>

Charlotte K. Newell

New York
<a target=‘_blank’ href="">Elizabeth Y. Austin</a>

Elizabeth Y. Austin

<a target=‘_blank’ href="">Jaime A. Bartlett</a>

Jaime A. Bartlett

San Francisco
<a target=‘_blank’ href="">Jim Ducayet</a>

Jim Ducayet

<a target=‘_blank’ href="">Yolanda C. Garcia</a>

Yolanda C. Garcia


<a target=‘_blank’ href="">James Heyworth</a>

James Heyworth

New York
<a target=‘_blank’ href="">Alex J. Kaplan</a>

Alex J. Kaplan

New York
<a target=‘_blank’ href="">Jodi E. Lopez</a>

Jodi E. Lopez

Los Angeles
<a target=‘_blank’ href="">Jon Muenz</a>

Jon Muenz

New York
<a target=‘_blank’ href="">Ian M. Ross</a>

Ian M. Ross

<a target=‘_blank’ href="">Hille R. Sheppard</a>

Hille R. Sheppard

<a target=‘_blank’ href="">Heather Benzmiller Sultanian</a>

Heather Benzmiller Sultanian

<a target=‘_blank’ href="">Robert S. Velevis</a>

Robert S. Velevis

<a target=‘_blank’ href="">Robin E. Wechkin</a>

Robin E. Wechkin



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