Articles Posted in Delaware Court of Chancery

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The Court of Chancery granted Defendants’ motion to dismiss Plaintiff’s claims for breach of fiduciary duty, waste, and unjust enrichment and dismissed the complaint with prejudice as to the named plaintiff because the claims were released as a part of a settlement agreement. Plaintiff brought these claims derivatively on behalf of Viacom Inc. challenging Viacom’s payment of approximately $13 million of compensation to its founder and then-chairman from 2014 to 2016 when Viacom’s directors purportedly knew that he was incapacitated and incapable of doing his job. The Court of Chancery held that the plain terms of the release in the settlement agreement entered into by Viacom in 2016 barred litigation of the derivative claims asserted in this case. View "Feuer v. Dauman" on Justia Law

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Plaintiff, the owner of a commercial property, filed suit against Defendant, a special servicer that handled the default side of loan servicing for its affiliate, after Plaintiff unsuccessfully sought to purchase a loan taken out to refinance existing debt on its property in an effort to avoid default. Plaintiff sought specific performance of a pre-negotiation agreement and injunctive relief to enjoin Defendant from foreclosing on the property until good faith negotiations occur under the pre-negotiation contract. The Court of Chancery granted Defendant’s motion to dismiss the complaint for failure to state a claim for relief, holding that each count of the complaint failed to state a claim for relief. View "Windsor I, LLC v. CWCapital Asset Management LLC" on Justia Law

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The Delaware Court of Chancery granted in part a motion for summary judgment in a breach of contract dispute regarding Duffield's involvement in the design of a wastewater treatment system. The court granted the motion as to Count I against defendants Don Lockwood and John Stanton, holding them jointly and severally liable for the total amount of $82,153.17 plus pre- and post-judgment interest; imposed a constructive trust over the assets transferred to defendants, ordered a full accounting of the proceeds of the distributions, and ordered disgorgement of any profits or proceeds from the transfers; denied the motion as it related to Count I claims against Pamala Stanton; and held that the motion for rule to show cause was moot. View "Duffield Associates, Inc. v. Lockwood Brothers, LLC" on Justia Law

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Plaintiff loaned money to GSM Nation, LLC in a series of transactions. Plaintiff later filed a complaint against GSM Nation and others, alleging, among other claims, breach of contract for failure to repay the loans. Defendants moved to dismiss the case for lack of subject matter jurisdiction, arguing that the complaint merely sought to collect a debt, and damages provided an adequate remedy at law. The Court of Chancery granted the motion to dismiss for lack of subject matter jurisdiction, holding that the court lacked subject matter jurisdiction over Plaintiff’s claims because the complaint did not assert any equitable claims, and an adequate remedy existed at law. View "Yu v. GSM Nation, LLC" on Justia Law

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United BioSource LLC (UBC) and Bracket Holding Corp. entered into a securities purchase agreement (SPA) pursuant to which Bracket purchased all equity interests and ownership interests in three subsidiaries of UBC, including P-Star Acquisition Co. Section 2.6(e) of the SPA governed the handling of certain tax refunds relating to pre-closing periods that may be received after the transaction’s closing. UBC later filed this complaint asserting a claim for specific performance. The complaint asserted that Bracket breached section 2.6(e) of the SPA by failing to forward a Pennsylvania tax refund to UBC within fifteen days of P-Star’s receipt of the refund. The Court of Chancery granted UBC’s motion for summary judgment seeking an order requiring Bracket to immediately forward the tax refund to UBC, holding that UBC clearly established that Bracket breached section 2.6 of the EPA based on undisputed facts, and Bracket’s affirmative defenses failed as a matter of law. View "United BioSource LLC v. Bracket Holding Corp." on Justia Law

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This lawsuit involved a loan agreement between Lender and Borrowers. The agreement gave Lender an option to purchase the collateral for the loan - the famous ex-Presidential Yacht Sequoia. A valuation of the Sequoia for purposes of securing the loan was established via fraud on the part of Borrowers. The claims and counterclaims arising out of the loan agreement were eventually resolved by a settlement entered as a court order. The only issue remaining for the Court of Chancery was to oversee the computation of the amount due Borrowers from Lender should Lender elect to acquire the Sequoia. Lender agreed to a minimum option price of zero dollars. The Court of Chancery found the option price to be zero dollars. View "The Sequoia Presidential Yacht Group LLC v. FE Partners LLC" on Justia Law

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This letter opinion addressed Third-Party Defendants’ motions to dismiss Third-Party Plaintiffs’ amended third-party complaint. The Third-Party Defendants advanced four bases on which the amended complaint should be dismissed, including lack of personal jurisdiction, failure to state a claim, failure to comply with Court of Chancery Rule 23.1, and an unreasonable delay in bringing the amended complaint. The Court of Chancery granted the Third-Party Defendants’ motions to dismiss, holding that the Third-Party Plaintiffs’ claims were time-barred because the Third-Party Plaintiffs failed to identify a tolling doctrine or extraordinary circumstances sufficient to avoid application of laches. View "CMS Inv. Holdings, LLC v. Castle" on Justia Law

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The underlying action in this case took place in a California court and resulted in a jury award of compensatory damages of $22.3 million in favor of Sierra Railroad Company and against Patriot Rail Company LLC. The jury also awarded punitive damages and exemplary damages in favor of Sierra. Sierra moved to amend the California judgment to add Gary Marino, the former Chairman, President and CEO of Patriot Rail, as a judgment debtor. Marino subsequently commenced this action seeking advancements of attorneys’ fees and expenses for the claims asserted against him in the post-judgment motion. The Court of Chancery granted summary judgment in favor of Marino, holding that Marino was entitled to some, but not all, of the fees and expenses that he has and will incur defending against the post-judgment motion. View "Marino v. Patriot Rail Co. LLC" on Justia Law

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In 2011, Seller sold a Company to Buyer under an Agreement. The Agreement contained provisions relating to tax consequences of change-of-control payments and professional fees that would be incurred that would reduce the Company’s tax liability. Seller argued before the Court of Chancery that Buyer breached the Agreement by not paying to Seller the full value of the tax savings. The Court entered judgment in favor of Seller in the $1,557,171, together with post-judgment interest at the legal rate, holding that, according to the intent of the parties as expressed in the Agreement as well as extrinsic evidence, Buyer owes Seller the value of the tax savings. View "Cyber Holding LLC v. CyberCore Holding, Inc." on Justia Law

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Plaintiff sought a preliminary injunction against Defendant to secure its information rights under a governing agreement. The Court of Chancery denied the motion, concluding that there was not a sufficient showing of risk of irreparable harm to justify interim injunction relief. Plaintiff moved for reargument or reconsideration, arguing that the Court misapplied or misapprehended the law and the facts. The Court of Chancery denied Plaintiff’s motion for reargument, holding that Plaintiff failed to demonstrate that the Court’s decision regarding irreparable harm was the product of a misapprehension of the facts or a misapplication of the law. View "AM Gen. Holdings LLC v. Renco Group, Inc." on Justia Law