Last month, Vice Chancellor Glasscock dismissed shareholder claims in Teamsters Local 443 Health Services & Insurance Plan v. John C. Chou (Del. Ch. Nov. 17, 2023) (“Teamsters II”) after finding that a single-member special litigation committee (“SLC”) had sufficiently investigated the stockholder’s allegations before recommending dismissal. Vice Chancellor Glasscock’s decision is not the first time that the Court of Chancery approved a single-member SLC’s motion to dismiss a derivative suit. For example, in April 2023, Vice Chancellor Lori W. Will granted a single-member SLC’s motion to terminate a shareholder action In re Baker Hughes Derivative Litig., 2023 WL 2967780 (Del. Ch. Apr. 17, 2023).
Sidley is pleased to share the December 2023 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.
Vice Chancellor Sam Glasscock III recently declined to grant a motion to dismiss in Paul Capital Advisors, L.L.C. et al. v. Holland, 2023 WL 5551017, C.A. No. 2022-0167-SG (Del. Aug. 29, 2023) (“Paul Capital”), which involved claims arising out of an intricate set of transactions intended to monetize certain illiquid assets. In sustaining the claims, the Court of Chancery colorfully outlined the challenges of deciphering a highly complex, “monkey’s fist of contracts” without accompanying provisions describing the purpose for such complexity in the first place, and encouraged practitioners to instead choose the path of simplicity.
Sidley is pleased to share the September 2023 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.
A recent Delaware Court of Chancery decision offers an important lesson on the limits of court review of an arbitration award, particularly when parties forego a fully reasoned award. Even though Vice Chancellor Glasscock found that “[t]he arbitration proceeding and the resulting award [were] flawed,” the court refused to overturn the award that appeared to find a contractual nonparty jointly and severally liable for breaches of the representations and warranties in a purchase agreement. The risk parties sometimes take when they contract for arbitration, the court found, is “receiving an arbitral decision that is questionable under the law and facts, but that is nonetheless—not coming within the narrow window of judicial oversight—not reviewable.”
In a recent decision, Chancellor Kathaleen McCormick of the Delaware Chancery Court examined what constitutes a sale of “substantially all” of a selling company’s assets for purposes of Section 271 of the Delaware General Corporation Law (DGCL), granting a company’s motion to dismiss a stockholder’s lawsuit alleging that a sale of the “crown jewel” of the company amounted to a sale of substantially all of its assets and accordingly required stockholder approval. Altieri v. Alexy, No. 2021-0946-KSJM (Del. Ch. May 22, 2023).
Last year we explained how a word as common as the conjunction “and” could be subject to different interpretations in a contract. See Grammarian’s Delight: It Depends On What The Meaning Of ‘And’ Is. The Delaware Supreme Court recently affirmed Vice-Chancellor Glasscock’s construction of the word “and” given the “range of possible interpretations” that courts have endorsed for the word—a good reminder for parties to exercise care when drafting agreements.
Sidley is pleased to share the March 2023 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.
Each quarter, Sidley publishes Sidley Perspectives on M&A and Corporate Governance, a newsletter designed to capture what we consider the more significant legal developments in M&A, corporate governance, and related areas. As we begin a new year, Sidley would like to share as a resource for our readers a hyperlinked list of Sidley-authored articles that were included or referenced in the newsletter during 2022. The list, available here, serves as somewhat of a year-in-review covering the key developments in 2022.
A recent Delaware Chancery Court decision addressed whether a restrictive covenant agreement was enforceable against a defendant who entered into that agreement willingly (and who waived his right to contest its reasonableness) as part of a sale of a business. Kodiak Building Partners, LLC v. Adams (Del. Ch. Oct. 6, 2022). The court held that the restrictive covenants were unreasonable in their geographic scope and scope of restricted activities because they were broader than necessary to protect the acquirer’s legitimate economic interests. This decision provides lessons for lawyers seeking to draft clear, effective and enforceable restrictive covenant provisions.