Justia Business Law Opinion Summaries

At issue in this case was the fair value of stock of ISN Software Corp. (Respondent) held by two minority stockholders, Polaris and Ad-Venture, (collectively, Petitioners) at the time of a merger by which the controller cashed out some, but not all, of the stock held by the minority. The Court of Chancery held (1) the method used by the controller to determine the fair value of the stock is unreliable; (2) a discounted cash flow analysis is the most reliable indicator of fair value; and (3) upon consideration of the expert opinions provided by Petitioners and Respondent, the statutory fair value is $98,783 per share. View "In re ISN Software Corp. Appraisal Litig." on Justia Law

In 2015, Plaintiff, a stockholder of Tradeworx, Inc., requested a declaratory judgment that shares issued in 2000 to WisdomTree Investments, Inc. were void because they were issued in exchange for future services, a practice that, at the time, was prohibited under certain provisions of the Delaware General Corporation Law and the Delaware Constitution. WisdomTree moved to dismiss the complaint for failure to state a claim. The Court of Chancery granted WisdomTree’s motion, holding that Plaintiff’s claim was barred under the doctrine of laches because the claim exceeded the analogous statutory limitations period by almost twelve years. View "Kraft v. Wisdomtree Invs., Inc." on Justia Law

Freestone Insurance Company was a Delaware-domiciled insurer that was placed in liquidation. The liquidation proceeding was governed by the Uniform Insurers Liquidation Act (the Uniform Act). The order that placed Freestone into liquidation contained an injunction (the Anti-Suit Injunction) barring third parties from pursuing claims against Freestone other than through the statutory process for receiving evaluating, and paying claims (the Claims Process). U.S. Bank National Association (the Bank) moved to lift the Anti-Suit Injunction, claiming that it wished to litigate against Freestone outside of the Claims Process and establish the amount of its claims and its status as a general creditor of Freestone. The Court of Chancery denied the Bank’s motion, holding that granting relief on the facts of this case would contravene the policies of the Uniform Act, interfere with the Claims Process, and impose unnecessary costs on Freestone and the Insurance Commissioner of the State of Delaware, who was serving as the receiver for Freestone. View "In re Liquidation of Freestone Ins. Co." on Justia Law

Plaintiffs and Defendants were members of Trinity School of the Bible, a Delaware not-for-profit corporation, and members of Trinity’s board. When disagreements arose among the Board members, Plaintiffs filed this complaint alleging a series of mismanagement claims against Defendants. Plaintiffs represented themselves in the matter. The Court of Chancery dismissed the complaint without prejudice, holding (1) Plaintiffs’ claims were derivative in nature and, therefore, belonged to Trinity; and (2) because a derivative plaintiff seeking to enforce rights on behalf of a corporation must be represented by counsel, the complaint is dismissed. View "Trinity Sch. of Bible Trustees v. Trinity Sch. of Bible Officers" on Justia Law

At issue in this case was a company that was acquired for $18 per share in an all-cash merger. Five months earlier, the target company declined an offer of $24 per share from the same acquiror. Plaintiffs, former public stockholders of the target company, sued the company’s board of directors and financial advisor, alleging that the board breached its fiduciary duties in approving the merger and that the financial advisor aided and abetted the breaches. The Court of Chancery granted Defendants’ motions to dismiss for failure to state a claim, holding that the business judgment rule standard of review applied to Plaintiffs’ allegations and insulated the merger. View "In re Volcano Corp. Stockholder Litig." on Justia Law

The court addressed the claim for advancement of expenses relating to the Preston Hollow Action. Both parties moved for summary judgment regarding advancement under the ORIX USA Charter, while only defendants have moved for summary judgment regarding the LLC Agreement. The court concluded that plaintiffs are entitled to advancement under the ORIX USA Charter for the expenses they incur based on their involvement in the Preston Hollow Action, but these expenses should not include any of Preston Hollow’s own litigation costs. In regard to the LLC Agreement, plaintiffs have raised a genuine question of fact as to whether they are threatened to be named defendants. Therefore, defendants’ motion for summary judgment must be denied. Decision is reserved on both parties’ motions regarding advancement for the withdrawn declaratory judgment claims in the Dallas Actions. View "Thompson v. ORIX USA Corp." on Justia Law

Tuscan filed suit against defendant, alleging conflict with and misconduct by defendant surrounding his termination from Tuscan. Defendant asserts Tuscan’s records indicate Tuscan’s majority stockholder and director, Anne Jacobi, misappropriated and misspent Tuscan’s funds. Defendant seeks leave to file a third party complaint against Jacobi, which in turn seeks an accounting, for Jacobi to repay any misappropriated funds to Tuscan, and for Jacobi to cause Tuscan to remit to defendant his share of Tuscan’s assets, or in the alternative to appoint defendant as Tuscan’s receiver. The court denied the motion. The court concluded that, because this case is still in the pleading stage and no immediate relief is sought, and Jacobi has not alleged any prejudice from joinder other than being forced to address the claims against her, it is hard to imagine any prejudice from consolidation. The court asked the parties to provide their positions on consolidating Tuscan v. Capaldi with the claims against Jacobi in letters of no more than two pages, to be submitted along with any exceptions to the draft report. View "Tuscan Construction, Inc. v. Capaldi" on Justia Law

Plaintiff, a stockholder, filed suit alleging corporate wrongdoing involving, among others, directors of BioScrip, Inc. Plaintiff made allegations intended to demonstrate that demand against the allegedly faithless directors would be futile. Before service of the complaint could be made, the anticipated change in board composition took place, such that the majority of the current directors are not the subject of the allegations of the complaint. Defendants moved to dismiss. The court agreed that, in these particular circumstances, plaintiff must demonstrate demand futility with respect to the new - that is, the current - board of directors. In light of this determination, which involves an application of the Delaware demand requirement to circumstances heretofore unlitigated, the court found it appropriate to defer a ruling on defendants’ motions to dismiss sufficient to allow plaintiff an opportunity to consider whether it should move to amend the complaint. View "Park Emp. and Retirement Bd. Emp. Annuity and Benefit Fund v. Smith" on Justia Law

In 2013, the Company completed a merger that gave rise to appraisal rights. Petitioners, owners of shares of common stock of the Company, seek appraisal. The court concluded that the fair value of the Company on the closing date was $17.62 per share; the legal rate of interest, compounded quarterly, shall accrue on this amount from the date of closing until the date of payment; the parties shall cooperate on preparing a final order for the court; and, if there are additional issues for the court to resolve before a final order can be entered, the parties shall submit a joint letter within two weeks that identifies them and recommends a schedule for bringing this case to conclusion, at least at the trial court level. View "In Re: Appraisal of Dell Inc." on Justia Law

The court reviewed letters submitted regarding the scope of issues to be tried during the trial scheduled in this matter. Plaintiffs contend that two issues related to Count I of their Verified Complaint should be decided at that trial. Issue No. 1: Does the Stockholders Agreement provide that the price to exercise the Option is the purchase price of a bona fide, third party purchaser . . . (assuming arguendo the Option still exists), or is it some lower formula price as Peter consistently has maintained? Issue No. 2: Have the statements or conduct of [Plaintiffs] or anyone at the Company breached the Stockholders Agreement (or induced such a breach)? The court agreed with defendants' contention that plaintiffs have mooted all of Count I by conceding via letter that the Option has not been triggered by any “act, event, or occurrence” to date. To the extent that plaintiffs seek reargument of the May 10 ruling, such a motion is untimely under Court of Chancery Rule 59(f). View "Edwards v. Edwards" on Justia Law