Another Musk-Twitter Sideshow Reminds That Which Email Address You Use Matters
The headline-generating Twitter-Musk saga has caused the Court’s rapid-fire issuance of more than 30 letters and memorandum opinions. Others have already been discussed on this blog. Another among them is notable for the Court’s consideration of whether Elon Musk waived privilege by sending and receiving otherwise privileged communications about the Twitter acquisition using his Tesla and SpaceX email addresses. This brief decision is an important reminder that yes, it does matter which email address you use to communicate about otherwise privileged matters. (more…)
In Musk-Twitter Sideshow, Stockholder Standing To Sue for “Lost Premium” Damages Makes Appearance
The on-then-off-then-on-again acquisition of Twitter, Inc. by Elon Musk has generated an unusual amount of attention for corporate litigation. Much of that has focused on the “main show” – the litigation commenced by Twitter seeking to compel Musk to close the transaction. Recently, however, the Delaware Court of Chancery issued a decision in a companion case, brought against Musk directly on behalf of a class of Twitter stockholders. (more…)
Combatting Allegations of “Divided Loyalty”: Important Lessons for Private Equity and Venture Capital Controlling Stockholders
Recently, the Delaware Court of Chancery issued another ruling regarding the sale of Authentix Acquisition Company, Inc. (“Authentix”) to Blue Water Energy LLP (“Blue Water”), which was approved in 2017 by Authentix’s Board of Directors (the “Board”) and its controlling stockholders. The June 3, 2022 decision (Manti Holdings, LLC v. Carlyle Group Inc., C.A. No. 2020-0657-SG, 2022 WL 1815759 (Del. Ch. June 3, 2022)) denied in part a motion to dismiss and held that the gravamen of the plaintiffs’ post-closing money damages complaint—allegations that the defendants breached fiduciary duties regarding the sale—sufficiently stated claims upon which relief could be granted. The ruling underscores the need for heightened care by target companies and their equity sponsors when contemplating a transaction supported by an equity sponsor, including in their communications (or lack of communications) with management and other shareholders.
To Bond Or Not To Bond: Enforceability Of Contractual Waivers Of Bond Requirements For Injunctive Relief
Parties to commercial agreements often include provisions that seek to remove or limit potential roadblocks to injunctive relief in the event of a breach. A recent decision from the Delaware Chancery Court shows that one such provision — the waiver of a bond requirement for a preliminary injunction — is not ironclad.
Grammarian’s Delight: It Depends On What The Meaning Of “And” Is
Readers who have been around for the past couple of decades will recall well a simpler time in our national politics, when the leader of the free world contended that he had not lied when telling aides, regarding a relationship with a White House intern, that “There’s nothing going on between us” because “It depends on what the meaning of ‘is’ is.”
Disinfecting with Sunlight: Vice Chancellor Laster on Attorney Misconduct in M&A Cases
Vice Chancellor Laster recently delivered a lecture at the University of Iowa College of Law focused on attorney ethics. As followers of this blog know, Vice Chancellor Laster has issued several M&A decisions that feature factual findings regarding attorney conduct. Three of them – the so-called “A-Trilogy” – were the subject of his presentation (AB Stable; Anthem; and Akorn). (more…)
Ten Questions To Ask Before Joining a Public Company Board of Directors
Being asked to join the board of directors of a public corporation is an honor. Board membership can be an enriching experience and an avenue for personal and professional growth. However, in an increasingly litigious, regulated and complex public company landscape, director candidates should conduct thoughtful and targeted due diligence on a company and its existing board practices before committing to a role that should be expected to extend over multiple years. The following are ten questions director candidates should ask themselves and the prospective company. The answers to many of these questions can be found in a company’s public disclosures. To demonstrate diligence and an earnestness in learning more about a company, a prospective board candidate may choose to start there before confirming the answers through conversations with current and former directors, senior management or a recruiter. (more…)
Sidley Perspectives on M&A and Corporate Governance
Sidley is pleased to share the March 2022 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. (more…)
Best Practices for Minute-Taking: Three Lessons from Recent Caremark Decisions
As has been frequently noted on this page, the Delaware Supreme Court’s landmark 2019 decision, Marchand v. Barnhill, marked the beginning of a series of cases in which Delaware courts refused to dismiss shareholder derivative actions alleging oversight breaches—so-called Caremark claims, which are often quoted as “possibly the most difficult theory in corporat[e] law” on which to bring a successful lawsuit. Typically following a books and records demand, these cases shine a spotlight not only on the oversight that boards perform, but also on the manner in which that oversight is documented in a company’s formal records. This post reviews, from a corporate record-keeping perspective, themes drawn from a selection of recent cases in which Delaware courts permitted cases to proceed on Caremark theories and implications for best practices in light of these themes. (more…)
Litigation Trends in Delaware and How Businesses and Boards Can Mitigate Risk
New structures, new rules? Delaware’s Chancery Court provides guidance on disclosure, conflicts, and risk allocation. We take a look at the latest Delaware rulings and what they say about SPAC directors’ fiduciary duty, as well as COVID’s effect on M&A deals, and how corporations and boards can mitigate their liability. Join host and Sidley partner, Sam Gandhi, as he speaks with two of the firm’s thought leaders on these subjects — Jim Ducayet and Charlotte Newell.
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