Justia Business Law Opinion Summaries

This case concerned a dispute between a Netherlands holding company and an Italian businessman. The businessman made a loan to the holding company for a joint venture. The joint venture eventually went into bankruptcy and defaulted on its loan obligations, including the loan from the businessman. The businessman filed this action alleging, among other things, that the holding company induced him to make the loan by representing that it would support and continue to back the joint venture. The holding company denied making those representations or having any obligations to the businessman. The holding company moved for summary judgment on multiple grounds. The Court of Chancery (1) found the businessman's claims were not barred for lack of standing; (2) denied summary judgment on the ground of laches; (3) denied summary judgment on the holding company's English statute of frauds defense; (4) granted summary judgment in the holding company's favor on the businessman's Italian law claim for breach of implied or oral contract and his Dutch law claim; and (5) granted the holding company's motion for summary judgment regarding the businessman's claim for unjust enrichment. View "Vichi v. Koninklijke Philips Elecs., N.V." on Justia Law

This case began as a control dispute in which the managing member of Oculus Capital Group, LLC sought to block the non-managing member from attempting to take over the managerial role. After a stipulated order and assorted rulings, the control dispute was largely resolved. What remained were the non-managing member's counterclaims, which sought damages from the managing member and its human controller based on the actions they took that caused the relationship between the parties to deteriorate and led to the control dispute. The plaintiffs moved to dismiss the counterclaims. The Court of Chancery (1) granted the motion to dismiss the breach of contract claim in part; (2) granted the motion to dismiss the aiding and abetting the breaches of the operating agreement claim in part; (3) denied the motion on the breach of default of fiduciary duty claim as to one of plaintiffs and stayed the count as to the other plaintiff pending arbitration; (4) denied the motion to dismiss the gross negligence claim as to one of the plaintiffs and granted the motion as to the other plaintiff; and (5) granted the motion to dismiss the declaratory judgment. View "Feeley v. NHAOCG, LLC" on Justia Law

Shareholder sent Corporation a formal written demand requesting access to twenty-two categories of Corporation's books and records. Corporation rejected the demand. Shareholder subsequently brought a books and records action under section 220 of the Delaware General Corporation Law. Corporation disputed the propriety of the purposes advanced by Shareholder and the ultimate scope of any court-ordered inspection of its books and records. The Court of Chancery held (1) Shareholder demonstrated a proper purpose for some of its books and records requests and demonstrated that it was entitled to inspect some of those books and records in aid of its proper purposes; and (2) otherwise, Shareholder's application under section 220 was denied. View "Rock Solid Gelt Ltd. v. SmartPill Corp." on Justia Law

IQ Holdings, Inc. (IQ Holdings) filed a petition seeking appraisal of its shares in American Commercial Lines Inc. (American). Both of the parties engaged financial experts. IQ Holdings retained David Fuller, and American retained Melissa Knoll. Believing that IQ Holdings improperly revised and supplemented its expert report after the discovery cutoff, American moved to strike the revised portions and to preclude Fuller from testifying about them. The Court of Chancery concluded that Fuller's revised portion of his report was excluded and he was precluded from testifying about it, and ordered that IQ Holdings serve a revised expert report showing how returning the analysis to the original version changed Fuller's valuation. View "IQ Holdings, Inc. v. Am. Commercial Lines Inc." on Justia Law

Plaintiff Southeastern Pennsylvania Transportation Authority (SEPTA), a former stockholder of Defendant SRA International, Inc. (SRA), challenged the merger of SRA and affiliates of Defendant Providence Equity Partners LLC. SRA and several members of its board of directors (Individual Defendants) before the merger moved for judgment on the pleadings on Count IV of the complaint, which alleged that the merger was invalid and that by approving the invalid merger, the Individual Defendants breached their fiduciary duty of loyalty to the public stockholders of SRA. The Court of Chancery held (1) SEPTA's claim that the merger was invalid failed as a matter of law, as the merger was effectively deemed valid; but (2) at this stage, the Individual SRA Defendants were not entitled to judgment on SEPTA's claim that they breached their fiduciary duties, as the conduct of the fiduciaries who approved the merger may still be challenged on the basis that it was carried out in violation of SRA's certificate of incorporation. View "Se. Pa. Transp. Auth. v. Volgenau" on Justia Law

Two lawsuits alleging violations of the federal securities laws were filed against Hecla Mining Company in federal court. In this action, Plaintiffs, alleged holders of a number of Hecla shares, sued derivatively to recover on behalf of Hecla the damages that the Company had suffered and will suffer from the federal securities actions and the safety violations. Defendants, several individuals associated with the Company, moved to dismiss for failure to make demand or adequately plead demand futility. The Court of Chancery granted the motion and dismissed the complaint with prejudice and without leave to amend as to the named plaintiff, holding that Plaintiffs failed to provide adequate representation for Hecla. The Court noted, however, that the dismissal of Plaintiffs' complaint should not have preclusive effect on the efforts of other stockholders to investigate potential claims and, if warranted, to file suit. View "South v. Baker" on Justia Law

After a dispute resulting in a call for the resignation of several members of the Hockessin Community Center's board of directors, the Center filed a complaint seeking a determination of the lawful board of the Center. The complaint also sought damages and equitable relief under theories of breach of contract, breach of fiduciary duty, and secondary liability, based on Defendants' status as directors. The Court of Chancery named the lawful members of the board and the board president in its opinion, concluding (1) the disputed directors did not disqualify themselves and cease to be directors by failing to attend three board meetings in a row; (2) the disputed directors were not validly removed pursuant to a director-removal right in an agreement; (3) several of the defendant directors did not resign from the board; (4) although the Center failed to follow corporate formalities when adding certain directors, the directors validly served on the board as de facto directors; (5) a resolution adding five other non-defendants to the board was invalid; and (6) the actions taken at meetings at which the disputed directors reconstituted the board were partially valid. View "Hockessin Cmty. Ctr., Inc. v. Swift " on Justia Law

Plaintiff's complaint sought a judicial declaration that the individuals Plaintiff elected to the board of a corporation were invalidly elected and constituted the entirety of the corporation's board of directors. After Defendant Gary Loyd participated in the process for several months, and after resolution was impeded by delays, Loyd moved for judgment on the pleadings arguing that Plaintiff's complaint failed to state a claim against him because he did not purport to be a director, officer, or shareholder of the corporation. The Court of Chancery denied Loyd's motion, holding that the complaint stated a claim against Loyd, as the allegations in the complaint were well-pleaded and the evidence supported the allegation the Loyd had asserted direct or indirect control over the corporation. View "Aequitas Solutions, Inc. v. Anderson" on Justia Law

On this motion to dismiss, plaintiff stockholders argued that they stated a claim for breach of fiduciary duty because a controlling stockholder refused to consider an acquisition offer that would have cashed out all the minority stockholders of defendant Synthes, Inc. but required the controlling stockholder to remain as an investor in Synthes. Instead, the controlling stockholder worked with the other directors of Synthes and ultimately accepted a bid made by Johnson & Johnson for sixty-five percent stock and thirty-five percent cash, and consummated a merger on those terms. The controlling stockholder received the same treatment in the merger as the other stockholders. The Court of Chancery dismissed the complaint, holding that the facts pled did not support an inference that there was any breach of fiduciary duty on the part of the controlling stockholder or members of the board of directors. View "In re Synthes, Inc. S'holder Litig." on Justia Law

Allergan, Inc. entered into a settlement with the U.S. Department of Justice pursuant to which Allergan pled guilty to criminal misdemeanor misbranding and paid a total of $600 million in civil and criminal fines. Various specialized plaintiffs' law firms subsequently filed derivative actions in the Court of Chancery and in the California federal court. The California federal court dismissed an amended and consolidated complaint pursuant to Rule 23.1 with prejudice (the "California judgment"). One Stockholder, UFCW Local 1776 & Participating Employers Pension Fund (UFCW) later intervened in the action before the Court of Chancery, and the plaintiffs filed a verified second amended derivative complaint ("the complaint"). The defendants moved to dismiss the complaint. The Court of Chancery denied the defendants' motions, holding (1) the California judgment did not mandate dismissal with prejudice under the doctrine of collateral estoppel; (2) the complaint pled demand futility under Rule 23.1; an (3) the complaint stated a claim under Rule 12(b)(6). View "La. Mun. Police Employees Ret. Sys. v. Pyott" on Justia Law