By

Jon Muenz

27 July 2022

Delaware Chancery Court Addresses Insider Trading Claims Under Brophy

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This post continues our prior discussion of Vice Chancellor Laster’s motion to dismiss denial in Goldstein v. Denner.  “Part II” of that decision focuses on interesting – and rarely addressed – matters relating to Delaware law insider trading claims pursuant to Brophy v. Cities Service Co, 70 A.2d 5 (Del. Ch. 1949).

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29 June 2022

Delaware Chancery Court Examines Independence of Board Members Nominated by Activist Investors

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A recent Court of Chancery decision may signal increased scrutiny of the independence of directors repeatedly placed on boards by activist investors.

On May 26, 2022, Vice Chancellor Laster issued the first installment of a two-part decision denying the motions to dismiss filed in Goldstein v. Denner. The litigation is grounded in the decision made by the board of directors of Bioverativ, Inc. (the “Company”) to merge with Sanofi S.A (“Sanofi”). (more…)

27 September 2021

Bear Market For Plaintiffs’ Liquidity-Based Conflict Allegations

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In M&A litigation, plaintiffs’ lawyers see actual or perceived conflicts of interest as gold.  Conflict allegations can take many forms and arise in a variety of contexts: for example, a board member of a target company who is offered employment by the would-be acquirer, or a controlling stockholder who sits on both sides of a transaction.  Another common example, and the focus of this post, is a board member or stockholder whose financial interests are alleged to diverge from other stockholders because of a need or desire to quickly liquidate holdings (referred to as a “liquidity-based conflict”). (more…)

22 June 2021

The Court of Chancery Breaks New Ground in Allowing “Reverse” Veil Piercing

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In a matter of first impression, Vice Chancellor Joseph R. Slights III recently concluded in Manichaean Capital, LLC v. Exela Technologies, Inc. that Delaware law permits a claim for “reverse” veil-piercing — that is, going after the assets of a subsidiary as opposed to a parent corporation. The decision provides a limited yet potentially powerful tool for those seeking to enforce judgments in the context of complex corporate structures, particularly where a corporate family has taken steps to limit assets flowing through the subsidiary that is liable. It also provides occasion to remind business entities of the attendant risks of failing to respect corporate separateness and form.

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04 March 2021

Delaware Supreme Court Invalidates Board Meeting “Ambush”

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Alex Bäcker did not like to wait in line.  Nor did he want to give up control of the company he co-founded and led, QLess, which produces a “virtual queue management system that reduces the time that retail customers must wait in line for services.”  The Delaware Supreme Court’s rejection of Bäcker’s apparent subterfuge in an effort to maintain that control is a reminder that director actions are subject to equitable review.

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02 November 2020

Delaware Won’t Let Just Anybody In

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Perhaps because it addresses the usually unexciting topic of forum non conveniens, a recent decision by Vice Chancellor Laster has flown largely under the radar. In Focus Financial Partners, LLC v. Holsopple, C.A. No. 2020-0188-JTL (Nov. 2, 2020), the Court issued a characteristically in-depth analysis of that sleepy doctrine in a case involving claims relating to the enforcement of a noncompete.

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