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…)
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Andrew W. Sternhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngAndrew W. Stern2022-10-24 11:09:122023-09-08 10:46:19In Musk-Twitter Sideshow, Stockholder Standing To Sue for “Lost Premium” Damages Makes Appearance
In the recent podcast episode with The Deal, Derek Zaba, co-chair of Sidley’s Shareholder Activism and Corporate Defense practice, explains why an insurgent investor might be more willing to push for M&A than seek out an operational thesis in today’s volatile markets.
In Samuel J. Heyman 1981 Continuing Tr. v. Ashland LLC (Sep. 12, 2022), the Delaware Supreme Court recently resolved a contractual dispute over potentially massive liability for cleaning up the Arthur Kill waterway in New Jersey. The contract at issue was a stock purchase agreement (SPA) in which Ashland LLC purchased 100% of the stock of an entity owned by a set of trusts affiliated with the Heyman family, but then immediately transferred back a particular property in Linden, New Jersey, to another entity affiliated with the Heyman parties. (more…)
The Delaware Court of Chancery recently interpreted the Delaware Limited Liability Company Act’s (“LLC Act”) provision for service on any “person” who “participates materially in the management” of a Delaware LLC as sufficient to support implied consent to Delaware jurisdiction by a Delaware LLC’s general counsel. In past cases, the Delaware Court of Chancery found that this material-participation standard applies to LLC officers who hold the title of president and perform functions customarily associated with that role. But in In re P3 Health Group Holdings, LLC, No. 2021-0518-JTL, Vice Chancellor Laster considered the plain meaning of “participates materially” and those words’ “natural habitat” in other statutes like the federal tax code and Delaware General Corporation Law’s (“DGCL”) consent-to-jurisdiction statute for corporate officers, and held that the LLC Act’s consent-to-jurisdiction statute extends to any person who holds a “C-suite” position in a Delaware LLC, including an LLC’s general counsel. C-suite executives of Delaware LLCs should thus anticipate that they may be subject to jurisdiction in Delaware for claims involving their actions as senior officers of a Delaware entity going forward.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Robert S. Velevishttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngRobert S. Velevis2022-10-05 10:49:302023-09-08 10:48:09General Counsel’s Natural Habitat: Delaware Court of Chancery Court Holds that LLC Act’s Consent-to-Jurisdiction Statute Extends to a Delaware LLC’s General Counsel
Holly J. Gregory, co-chair of Sidley’s global Corporate Governance practice, sat down with WIRED to look at the business deals featured on HBO’s hit show “Succession.” In this video interview, she breaks down the deals and gives the inside scoop on everything from loan covenants to corporate mergers.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Holly J. Gregoryhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngHolly J. Gregory2022-09-28 09:16:032023-09-08 10:51:26Holly Gregory Breaks Down Succession Business Deals
Delaware law is often selected as governing law by contracting parties, but will Delaware courts automatically accept the parties’ choice-of-law selection?
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Alex J. Kaplanhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngAlex J. Kaplan2022-09-19 10:26:012023-09-08 10:54:00Oklahoma Law Cannot Supplant a Delaware Choice-of-Law Provision…This Time
In 1996, the Delaware Court of Chancery issued its seminal decision in In re Caremark International Inc. Derivative Litigation, which establishes the framework for director oversight liability under Delaware law. Over time, Delaware courts frequently observed that this type of claim was “possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment,” and these claims rarely advanced beyond the motion-to-dismiss stage. However, in a three-year span beginning in 2019, Delaware courts denied motions to dismiss Caremark claims in five cases, leading some to question whether the Caremark standard has been relaxed. A recent Court of Chancery decision issued earlier this summer provides an important counterpoint to this recent commentary, while underscoring that boards must exercise rigorous oversight over “mission critical” risks.
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…)
Andrew W. Stern
New York
astern@sidley.com
Connor Grant-Knight
New York
cgrantknight@sidley.com
Activist Investing Today: Zaba Sees M&A Activism Amid Uncertainty
In the recent podcast episode with The Deal, Derek Zaba, co-chair of Sidley’s Shareholder Activism and Corporate Defense practice, explains why an insurgent investor might be more willing to push for M&A than seek out an operational thesis in today’s volatile markets.
Derek Zaba
Palo Alto, New York
dzaba@sidley.com
Delaware Courts Closely Examine Indemnification Claims for Attorneys’ Fees, “Whether or Not” the Parties Intend
In Samuel J. Heyman 1981 Continuing Tr. v. Ashland LLC (Sep. 12, 2022), the Delaware Supreme Court recently resolved a contractual dispute over potentially massive liability for cleaning up the Arthur Kill waterway in New Jersey. The contract at issue was a stock purchase agreement (SPA) in which Ashland LLC purchased 100% of the stock of an entity owned by a set of trusts affiliated with the Heyman family, but then immediately transferred back a particular property in Linden, New Jersey, to another entity affiliated with the Heyman parties. (more…)
Heather Benzmiller Sultanian
Chicago
hsultanian@sidley.com
General Counsel’s Natural Habitat: Delaware Court of Chancery Court Holds that LLC Act’s Consent-to-Jurisdiction Statute Extends to a Delaware LLC’s General Counsel
The Delaware Court of Chancery recently interpreted the Delaware Limited Liability Company Act’s (“LLC Act”) provision for service on any “person” who “participates materially in the management” of a Delaware LLC as sufficient to support implied consent to Delaware jurisdiction by a Delaware LLC’s general counsel. In past cases, the Delaware Court of Chancery found that this material-participation standard applies to LLC officers who hold the title of president and perform functions customarily associated with that role. But in In re P3 Health Group Holdings, LLC, No. 2021-0518-JTL, Vice Chancellor Laster considered the plain meaning of “participates materially” and those words’ “natural habitat” in other statutes like the federal tax code and Delaware General Corporation Law’s (“DGCL”) consent-to-jurisdiction statute for corporate officers, and held that the LLC Act’s consent-to-jurisdiction statute extends to any person who holds a “C-suite” position in a Delaware LLC, including an LLC’s general counsel. C-suite executives of Delaware LLCs should thus anticipate that they may be subject to jurisdiction in Delaware for claims involving their actions as senior officers of a Delaware entity going forward.
(more…)
Robert S. Velevis
Dallas
rvelevis@sidley.com
Barret V. Armbruster
Dallas
barmbruster@sidley.com
Holly Gregory Breaks Down Succession Business Deals
Holly J. Gregory, co-chair of Sidley’s global Corporate Governance practice, sat down with WIRED to look at the business deals featured on HBO’s hit show “Succession.” In this video interview, she breaks down the deals and gives the inside scoop on everything from loan covenants to corporate mergers.
Holly J. Gregory
New York
holly.gregory@sidley.com
Oklahoma Law Cannot Supplant a Delaware Choice-of-Law Provision…This Time
Delaware law is often selected as governing law by contracting parties, but will Delaware courts automatically accept the parties’ choice-of-law selection?
(more…)
Alex J. Kaplan
New York
akaplan@sidley.com
Alex B. Porter
Board’s Good-Faith Oversight of “Mission Critical” Risks Insulates Directors from “Caremark” Claim
In 1996, the Delaware Court of Chancery issued its seminal decision in In re Caremark International Inc. Derivative Litigation, which establishes the framework for director oversight liability under Delaware law. Over time, Delaware courts frequently observed that this type of claim was “possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment,” and these claims rarely advanced beyond the motion-to-dismiss stage. However, in a three-year span beginning in 2019, Delaware courts denied motions to dismiss Caremark claims in five cases, leading some to question whether the Caremark standard has been relaxed. A recent Court of Chancery decision issued earlier this summer provides an important counterpoint to this recent commentary, while underscoring that boards must exercise rigorous oversight over “mission critical” risks.
(more…)
Nilofer Umar
Chicago
numar@sidley.com
Neil H. Conrad
Chicago
nconrad@sidley.com
Caroline Wong
Chicago
caroline.wong@sidley.com
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Andrew W. Stern
astern@sidley.com
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Jim Ducayet
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Yolanda C. Garcia
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James Heyworth
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Alex J. Kaplan
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Jodi E. Lopez
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Jon Muenz
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Ian M. Ross
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Hille R. Sheppard
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Heather Benzmiller Sultanian
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Robert S. Velevis
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Robin E. Wechkin
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