On July 5, 2024, the Delaware Supreme Court affirmed a Court of Chancery decision in REM OA Holdings, LLC v. N. Gold Holdings, LLC that serves as a warning for parties entering a contract or other binding document to diligently review each term of the agreement, including by proactively seeking out, reviewing, and analyzing any documents incorporated by reference.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/12/MN-18360_Updated-Enhanced-Scrutiny-Blog-imagery_833x606_13.jpg606833Jodi E. Lopezhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngJodi E. Lopez2024-08-19 09:02:462025-09-30 14:25:39Chancery, Affirmed: Delaware is ‘Contractarian,’ So Please Read The Fine Print
Last month, in Bricklayers Pension Fund of Western Pennsylvania v. Brinkley, Delaware’s Court of Chancery dismissed a stockholder plaintiff’s derivative suit against the directors and officers of Centene Corporation for purported breaches of fiduciary duty in connection with their oversight of company compliance with Medicaid laws and regulations. The Court concluded that the plaintiff failed to establish demand futility pursuant to Court of Chancery Rule 23.1. Put another way, the plaintiff failed to demonstrate that it had standing to pursue claims on behalf of Centene.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Vincent J. Margiottahttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngVincent J. Margiotta2024-08-15 09:02:382024-08-14 10:32:52Chancery Court Reminds Bricklayers of Sturdy Foundation Required to Plead Demand Futility for Caremark Claims
Texas’ new business courts are one month away from opening their doors on September 1. Over the last few weeks, Texas has been preparing for that day. Texas Governor Greg Abbott recently appointed the inaugural set of business court judges, and the Texas Supreme Court finalized the business court’s rules and filing fees. Companies that do business in or that otherwise have ties to Texas should also start planning now for the strategic questions that may arise when business courts become an option in just a few short weeks.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2023/05/MN-18360_Updated-Enhanced-Scrutiny-Blog-imagery_833x606_32.jpg606833Angela C. Zambranohttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngAngela C. Zambrano2024-08-08 09:01:482024-08-07 16:04:29Strategic Questions to Consider as Business Courts Open in Texas
Prince Rogers Nelson – better known by the mononym Prince, or for a time by a really cool symbol – was a world-famous musician, known for playing up to 27 instruments. He wrote dozens of hit songs: Purple Rain, When Doves Cry, Little Res Judicata, er, Red Corvette, the list goes on. But as discussed in McMillan v. Nelson, a recent decision from the Delaware Court of Chancery, what he did not write was a will.
In City of Sarasota Firefighters’ Pension Fund v. Inovalon Holdings, Inc., the Delaware Supreme Court provided additional guidance on the contours of the MFW framework and its application – a timely reminder that stockholders (and courts) are looking at the big picture when assessing disclosures in the MFW context.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2024/07/MN-18360_Updated-Enhanced-Scrutiny-Blog-imagery_833x606_31.jpg606833Ian M. Rosshttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngIan M. Ross2024-07-31 09:02:232024-07-30 14:43:46Look at the Big Picture: A Message to Boards Seeking Business Judgment Rule Protection
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.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Kedrick Glinskihttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngKedrick Glinski2024-07-18 09:02:162025-09-30 14:26:27The Delaware Court of Chancery Undertakes Exacting Calculations of Equitable Damages and Will Award Tens of Millions of Dollars? Yes, It Does That, Too.
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.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2023/05/MN-18360_Updated-Enhanced-Scrutiny-Blog-imagery_833x606_11.jpg606833Beth E. Berghttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngBeth E. Berg2024-07-15 14:34:212025-09-30 14:27:23Sunshine Breaking Through the Clouds: Delaware Supreme Court Sheds Light on Standard of Review for Challenges to Advance Notice Bylaws
Chancery, Affirmed: Delaware is ‘Contractarian,’ So Please Read The Fine Print
On July 5, 2024, the Delaware Supreme Court affirmed a Court of Chancery decision in REM OA Holdings, LLC v. N. Gold Holdings, LLC that serves as a warning for parties entering a contract or other binding document to diligently review each term of the agreement, including by proactively seeking out, reviewing, and analyzing any documents incorporated by reference.
(more…)
Jodi E. Lopez
Los Angeles
jlopez@sidley.com
Maseeh Moradi
Chicago
mmoradi@sidley.com
Chancery Court Reminds Bricklayers of Sturdy Foundation Required to Plead Demand Futility for Caremark Claims
Last month, in Bricklayers Pension Fund of Western Pennsylvania v. Brinkley, Delaware’s Court of Chancery dismissed a stockholder plaintiff’s derivative suit against the directors and officers of Centene Corporation for purported breaches of fiduciary duty in connection with their oversight of company compliance with Medicaid laws and regulations. The Court concluded that the plaintiff failed to establish demand futility pursuant to Court of Chancery Rule 23.1. Put another way, the plaintiff failed to demonstrate that it had standing to pursue claims on behalf of Centene.
(more…)
Vincent J. Margiotta
New York
vmargiotta@sidley.com
Andrew W. Stern
Strategic Questions to Consider as Business Courts Open in Texas
Texas’ new business courts are one month away from opening their doors on September 1. Over the last few weeks, Texas has been preparing for that day. Texas Governor Greg Abbott recently appointed the inaugural set of business court judges, and the Texas Supreme Court finalized the business court’s rules and filing fees. Companies that do business in or that otherwise have ties to Texas should also start planning now for the strategic questions that may arise when business courts become an option in just a few short weeks.
(more…)
Angela C. Zambrano
Dallas
azambrano@sidley.com
Natali Wyson
Dallas
nwyson@sidley.com
Chelsea A. Priest
Dallas
cpriest@sidley.com
Purple Rain on Non-Managing LLC Members’ Parade
Prince Rogers Nelson – better known by the mononym Prince, or for a time by a really cool symbol – was a world-famous musician, known for playing up to 27 instruments. He wrote dozens of hit songs: Purple Rain, When Doves Cry, Little Res Judicata, er, Red Corvette, the list goes on. But as discussed in McMillan v. Nelson, a recent decision from the Delaware Court of Chancery, what he did not write was a will.
(more…)
Jon Muenz
New York
jmuenz@sidley.com
Look at the Big Picture: A Message to Boards Seeking Business Judgment Rule Protection
In City of Sarasota Firefighters’ Pension Fund v. Inovalon Holdings, Inc., the Delaware Supreme Court provided additional guidance on the contours of the MFW framework and its application – a timely reminder that stockholders (and courts) are looking at the big picture when assessing disclosures in the MFW context.
(more…)
Ian M. Ross
Miami
iross@sidley.com
Natalie A. Piazza
Dallas
npiazza@sidley.com
Arthur E. Adler
New York
aadler@sidley.com
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.
(more…)
Kedrick Glinski
Summer Associate
kedrick.glinski@sidley.com
Alex J. Kaplan
New York
akaplan@sidley.com
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.
(more…)
Beth E. Berg
Chicago
bberg@sidley.com
Charlotte K. Newell
New York
cnewell@sidley.com
Loren Braswell
Arthur E. Adler
New York
aadler@sidley.com
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