The Court of Chancery Prunes Back the Limits of Its Jurisdiction

The Delaware Court of Chancery is one of limited jurisdiction, accessible only when complete relief at law is unavailable. On March 4, 2024, in Graciano v Adobe Healthcare, Inc., Vice Chancellor Glasscock continued a trend from other recent cases toward guarding the limits of the Court of Chancery’s equitable jurisdiction, when he concluded that a claim for release of funds in escrow established through an M&A transaction was not equitable in nature—even though framed as a request for specific performance—because a declaratory judgment was the only judicial action required to afford the Plaintiff relief.


Corporate Personal Jurisdiction, Mallory, and Forum-Shopping: What’s Next for Multistate or International Corporations?

A new federal court decision, Madsen v. Sidwell Air Freight1,  addresses the scope of general personal jurisdiction over corporations after the Supreme Court’s 2023 decision in Mallory v. Norfolk Southern Railway2.  Madsen suggests that many states’ laws stop short of asserting the kind of registration-based jurisdiction that Mallory approved. This decision highlights key arguments that in-house litigators should bear in mind if their companies do business in multiple states.


Securities Litigation Against Life Sciences Companies: 2023

Securities class actions against life sciences companies are mostly second-order problems. The first-order problem is a business or regulatory setback that, when disclosed by the company or a third party, triggers a stock price decline. Following the decline, plaintiffs’ class-action attorneys search the company’s previous public statements and seek to identify inconsistencies between past positive comments and the current negative development. In most cases, plaintiffs’ attorneys then seek to show that any arguable inconsistency amounts to fraud — that is, they will claim that the earlier statement was knowingly or recklessly false or misleading. When the challenged statement appears in a public offering document (that is, a registration statement or prospectus), plaintiffs need only show that the statement was materially false or misleading, not that it was made with scienter or caused their losses.


The Powers That Be: Supreme Court Holds That Non-Voting Stockholder Classes Cannot Invoke the “Powers, Preferences or Special Rights” Exception in Section 242, to Vote on Charter Amendments to Exculpate Officers From Duty of Care Breaches

Following amendments in August 2022 to Section 102(b)(7) of the Delaware General Corporate Law (“DGCL”) to allow corporations to include provisions in their respective charters exculpating officers for breaches of the duty of care, a number of corporations naturally took steps to add such provisions.  Stockholder challenges followed in In re Fox Corp./Snap Section 242 Litigation, No. 120, 2023, 2024 WL 176575 (Del. Jan. 17, 2024), as revised (Jan. 25, 2024), which involved parallel lawsuits contesting the manner in which two separate corporations with multi-class capital structures adopted amendments providing for officer exculpation.  The Delaware Supreme Court ultimately affirmed a lower court decision in favor of the corporations, holding that, consistent with their respective charters, the corporations validly obtained approval from stockholder classes permitted to vote and validly excluded from the vote non-voting stockholder classes.


Carvana SLC Drives Away Derivative Case

On March 27, 2024, Chancellor McCormick granted the Carvana Special Litigation Committee’s motion to dismiss after finding no wrongdoing by the Company’s controlling stockholders in connection with its March 2020 direct offering and the controlling stockholders’ subsequent sale of Company stock for over US$1 billion. See


Delaware Court of Chancery Says It’s Game Over on Massive Fees for “Miniscule” Work

Last month, in an oral ruling likely to bring great joy to the Delaware defense bar, Vice Chancellor Zurn issued an atypical “Statement of the Court” in Garfield v. Getaround that swiftly rejected an $850,000 fee request in a derivative action.  Plaintiff sought the fee for its  efforts in prompting Defendant Getaround Inc. to make changes to its voting structure.  Calling attention to the slew of similar actions by stockholders following Garfield v. Boxed, Vice Chancellor Zurn said the “game is over” for attorneys’ “making a literal fortune off of a minuscule number of hours of work.”


Voting Commitments Matter and Will Be Enforced: Delaware Supreme Court Affirms Chancery Decision Holding Activist Stockholders to Their Bargain

When companies settle proxy contests with activist stockholders, the activists generally give up stockholder-level influence in exchange for board-level influence.  In a typical agreement in this setting, activists gain board seats in exchange for a commitment to vote their shares with the board’s recommendation on proposals put to stockholders.  Activists also agree to standstill periods in which they refrain from taking actions opposed to the board, and from increasing their holdings above a specified cap.




Meet the Team

<a target=‘_blank’ href="">Andrew W. Stern</a>

Andrew W. Stern

New York
<a target=‘_blank’ href="">Charlotte K. Newell</a>

Charlotte K. Newell

New York
<a target=‘_blank’ href="">Elizabeth Y. Austin</a>

Elizabeth Y. Austin

<a target=‘_blank’ href="">Jaime A. Bartlett</a>

Jaime A. Bartlett

San Francisco
<a target=‘_blank’ href="">Jim Ducayet</a>

Jim Ducayet

<a target=‘_blank’ href="">Yolanda C. Garcia</a>

Yolanda C. Garcia

<a target=‘_blank’ href="">James Heyworth</a>

James Heyworth

New York
<a target=‘_blank’ href="">Alex J. Kaplan</a>

Alex J. Kaplan

New York
<a target=‘_blank’ href="">Jodi E. Lopez</a>

Jodi E. Lopez

Los Angeles
<a target=‘_blank’ href="">Jon Muenz</a>

Jon Muenz

New York

<a target=‘_blank’ href="">Ian M. Ross</a>

Ian M. Ross

<a target=‘_blank’ href="">Hille R. Sheppard</a>

Hille R. Sheppard

<a target=‘_blank’ href="">Heather Benzmiller Sultanian</a>

Heather Benzmiller Sultanian

<a target=‘_blank’ href="">Robert S. Velevis</a>

Robert S. Velevis

<a target=‘_blank’ href="">Robin E. Wechkin</a>

Robin E. Wechkin



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