Justia Business Law Opinion Summaries

A question of Delaware law was certified from the United States Court of Appeals for the Ninth. The issue focused on whether under the "fraud exception" to Delaware's continuous ownership rule, shareholder plaintiffs may maintain a derivative suit after a merger that divests them of their ownership interest in the corporation on whose behalf they sue by alleging that the merger at issue was necessitated by, and is inseparable from, the alleged fraud that is the subject of their derivative claims. The Delaware Court answered that question in the negative. View "Arkansas Teacher Retirement System, et al. v. Countrywide Financial Corporation, et al." on Justia Law

Plaintiff appealed a Court of Chancery order that granted summary judgment and dismissed his suit on laches grounds. The underlying dispute arose over capital investments plaintiff made in two companies. Upon review, the Supreme Court concluded plaintiff's arguments made on appeal lacked merit, however, the Court reversed and remanded on different grounds. View "Levey v. Brownstone Asset Management, LLP, et al." on Justia Law

Defendant-appellant DV Realty Advisors LLC appealed a Court of Chancery declaratory judgment that plaintiffs-appellees properly removed DV Realty as the General Partner of Chicago-based Delaware limited partnership DV Urban Realty Partners I, L.P. In its two issues raised before the Supreme Court on appeal, DV Realty DV Realty argued: (1) the Court of Chancery improperly found that the Limited Partners believed in good faith that because of untimely delivered audited financial statements, removing DV Realty was necessary for the best interest of the partnership; and, (2) "Red Flag Issues" raised by an advisor were not sufficient to support a finding that the Limited Partners removed DV Realty in good faith. Upon review, the Supreme Court concluded that both of DV Realty's arguments were without merit. View "DV Realty Advisors LLC v. Policemen's Annuity & Benefit Fund of Chicago, et al." on Justia Law

The Court of Chancery dismissed a class action complaint that objected to the merger of a limited partnership with its general partner's controller. The plaintiff-limited partner's complaint alleged that the general partner (its controller) and its directors took actions during and preceding the merger negotiations that breached the contractual duties the partnership agreement. Upon review, the Supreme Court concluded that the plaintiff's allegations that the independent directors failed to negotiate effectively did not permit a reasonable inference that the independent directors breached their duty to act with subjective good faith. Therefore the Supreme Court affirmed dismissal of the complaint. View "Allen v. Encore Energy Partners, L.P., et al." on Justia Law

The issue before the Supreme Court in this case was whether an arbitration determination should have been vacated because the arbitrator refused to consider certain evidence. The arbitrator concluded he lacked authority to decide whether a particular issue was arbitrable. Because the Court of Chancery inconsistently resolved arbitrability questions that came before it, the matter was appealed to the Supreme Court. Upon further review, the Supreme Court concluded that in this case, the trial court was correct in holding that neither party's claim provided a good enough reason to vacate the arbitration determination. View "Viacom International Inc. v. Winshall" on Justia Law

In 2011, the Board of Cosmetology and Barbering suspended Petitioner Randall Richardson's license due to his leasing work space to his wife who Petitioner knew did not have a valid license. A Hearing Officer recommended a fine and a 90-day suspension of Petitioner's license. The Board voted to adopt the Hearing Officer’s recommendations. The Superior Court affirmed the Board’s decision. On appeal, Petitioner argued: (1) the Board failed to create a complete record for the Supreme Court to review on appeal; (2) the Board failed to properly appoint the Hearing Officer to his case; (3) the Board failed to consider exceptions to the Hearing Officer’s recommendation; (4) the Board erred in suspending Petitioner's license because he only violated the requirements of his Shop License; and (5) the Hearing Officer lacked statutory authority to conduct hearings involving potential license suspensions. Upon review, the Supreme Court concluded that the Hearing Officer had the authority to act and that the Board had the authority to suspend Petitioner's License. However, the Court agreed that the Board created an insufficient record for appellate review. Accordingly, the Superior Court's judgment was vacated and the matter remanded for further proceedings. View "Richardson v. Board of Cosmetology & Barbering" on Justia Law

Tenant-Defendant Bhole, Inc. terminated its commercial lease before the lease expired. Before the end of the lease, Plaintiff-landlord Shore Investments, Inc. filed suit to recover the entire unpaid rent for the balance of the term. The lease agreement did not contain an acceleration clause. Upon review of the matter, the Supreme Court found that though defendants breached the lease, the trial court erred by not considering the lease did not have an acceleration clause. The trial court's award of damages and attorney's fees was inappropriate, and its decision regarding the landlord's claim for tortious interference with the lease (with a punitive damages award) was also made in error. The Supreme Court reversed the trial court and remanded the case for further proceedings. View "Bhole, Inc., at al. v. Shore Investments, Inc." on Justia Law

Plaintiff Joel Gerber held limited partnership (LP) units in Enterprise GP Holdings, L.P. He sued on behalf of two classes of former public holders of LP units in Enterprise, challenging the sale of a subsidiary and a merger with another. Defendants successfully moved the trial court to dismiss Plaintiff's complaint, and Plaintiff appealed. Upon review, the Supreme Court concluded the trial court erred in dismissing the complaint. The Court affirmed in part, reversed in part, and remanded the case for further proceedings. View "Gerber v. Enterprise Products Holdings,LLC " on Justia Law

The issue before the Supreme Court in this case was whether the Court of Chancery erred in dismissing a derivative and class action complaint against the general partner and other managers of a limited partnership. The governing limited partnership agreement provided that appellees had no liability for money damages as long as they acted in good faith. The Court of Chancery dismissed the complaint because it failed to allege facts that would support a finding of bad faith. After remand, the Court of Chancery held that appellants waived their alternative claims for reformation or rescission. Upon review of the matter, the Supreme Court affirmed. View "Brinckerhoff v. Enbridge Energy Company, Inc." on Justia Law

Carlyle Investment Management L.L.C. (CIM) and TC Group, L.L.C. (collectively, Plaintiffs) filed suit against defendant-appellant National Industries Group (NIG). Plaintiffs sought a declaratory judgment to enforce the terms of a forum selection clause contained in a Subscription Agreement between Carlyle Capital Corporation, Ltd. (CCC) and NIG. Specifically, they sought an injunction against NIG from proceeding with litigation that it filed against CCC in Kuwait in December, 2009. The Court of Chancery entered a Default Judgment against NIG. As part of the Default Judgment, the Court of Chancery issued an anti-suit injunction. NIG filed a Motion to Vacate the Default Judgment and to Dismiss the Complaint approximately one year later. The Court of Chancery denied the motion. NIG raised several related issues on appeal to the Supreme Court: (1) that the Court of Chancery erred in refusing to vacate the Default Judgment because the Default Judgment was void due to lack of subject matter and personal jurisdiction; (2) that the Court of Chancery's limited subject matter jurisdiction did not encompass actions for which a remedy at law is available or from which no irreparable harm could result; and (3) that the Court of Chancery erred in refusing to vacate the Default Judgment because, in so doing, the court effectively denied NIG the opportunity to litigate its claims against Carlyle. Upon review, the Supreme Court concluded that all of NIG's claims of error were all without merit, and affirmed the Court of Chancery's judgment. View "National Industries Group v. Carlyle Investment Management, L.L.C." on Justia Law