Justia Business Law Opinion Summaries

The issue on appeal in this case came from a decision that dismissed a complaint against a foreign business entity for lack of personal jurisdiction. The foreign company allegedly conspired with other defendants to divest appellant of his interest in a lucrative joint venture. That plan was accomplished, in part, by causing the dissolution of a Delaware limited liability company co-founded by appellant. Under the "conspiracy theory" of personal jurisdiction, a plaintiff must allege facts from which one can infer that a foreign defendant knew or should have known that the conspiracy would have a Delaware nexus. The trial court found that the foreign company did not know about the Delaware connection until after the limited liability company had been dissolved. As a result, the trial court dismissed for lack of personal jurisdiction. Upon review, the Supreme Court reversed finding that the trial court's analysis was flawed in two respects: (1) the applicable standard is whether the foreign entity knew or should have known that it was conducting activity in Delaware (here, even if the record facts did not establish that appellee knew about the dissolution before it occurred, they established that appellee should have known that it was dealing with a Delaware company); (2) the conspiracy did not begin or end with the dissolution of the Delaware company (appellee learned that its business partner had been a Delaware entity shortly after the dissolution, and the alleged conspiracy continued long after that date). View "Matthew v. Flakt Woods Group SA" on Justia Law

In resolving this dispute between the controlling member–manager and the minority investors of a Delaware Limited Liability Company (LLC), the Supreme Court interpreted the LLC's governing instrument as a contract that adopted the equitable standard of entire fairness in a conflict of interest transaction between the LLC and its manager. The Court held that the manager violated that contracted-for fiduciary duty by refusing to negotiate with a third-party bidder and then by causing the company to be sold to himself at an unfair price in a flawed auction that the manager himself engineered. The Court affirmed the trial court's damages award solely on contractual grounds, and affirmed the court’s award of attorneys' fees. View "Gatz Properties, LLC v. Auriga Capital Corp., et al." on Justia Law

In this appeal, the issue before the Supreme Court was whether a contractor's bid was responsive to the Delaware Department of Transportation's (DelDOT) Request for Proposals (RFP). The contractor's bid did not include required paint certifications. In addition, the bid reflected the contractor's plan to use new steel beams, rather than refurbish the existing ones, as required by the RFP. The contractor chose to submit a bid that did not conform to the project specifications. The Supreme Court concluded that the contractor therefore did so at its own risk. DelDOT's decision that the bid was non-responsive was not arbitrary or capricious. Accordingly, the Court affirmed the trial court's entry of summary judgment in DelDOT's favor. View "Julian v. Delaware Dep't. of Transportation" on Justia Law

The Court of Chancery held that Defendants-Appellants, Americas Mining Corporation (AMC), a subsidiary of Southern Copper Corporation's (Southern Peru) controlling shareholder, and affiliate directors of Southern Peru, breached their fiduciary duty of loyalty to Southern Peru and its minority stockholders by causing Southern Peru to acquire the controller’s 99.15% interest in a Mexican mining company, Minera Mexico, S.A. de C.V., for much more than it was worth (at an unfair price). The Plaintiff challenged the transaction derivatively on behalf of Southern Peru. The Court of Chancery found the trial evidence established that the controlling shareholder through AMC, "extracted a deal that was far better than market" from Southern Peru due to the ineffective operation of a special committee. To remedy the Defendants' breaches of loyalty, the Court of Chancery awarded the difference between the value Southern Peru paid for Minera ($3.7 billion) and the amount the Court of Chancery determined Minera was worth ($2.4 billion). The Court of Chancery awarded damages in the amount of $1.347 billion plus pre- and postjudgment interest, for a total judgment of $2.0316 billion. The Court of Chancery also awarded the Plaintiff's counsel attorneys' fees and expenses in the amount of 15% of the total judgment, which amounts to more than $304 million. Defendants raised five issues on appeal pertaining to their perceived errors at trial, the valuation of the shares and companies involved and the awarding of attorneys fees. Upon review, the Supreme Court determined that all of the Defendants' arguments were without merit. Therefore, the judgment of the Court of Chancery was affirmed. View "Americas Mining Corp. v. Theriault Southern Copper Corp." on Justia Law

Defendant-Appellant Intel Corporation appealed a Superior Court order granting partial summary judgment in favor of Plaintiff-Appellee American Guarantee & Liability Insurance Co. (AGLI) in a dispute over the interpretation of an excess insurance policy under California law. AGLI sought and obtained a declaration from the Superior Court that AGLI had no duty to reimburse Intel for defense costs or indemnity claims in connection with Intel's defense of various antitrust lawsuits, because the underlying insurance policy limits of $50 million were not exhausted as required by the AGLI policy. Intel read the AGLI Policy to allow Intel to exhaust the limits of its underlying policy with XL Insurance Company by adding Intel's own contributed payments for defense costs to the amount of Intel's settlement with XL. Under Intel’s interpretation, the XL Policy was exhausted and AGLI's duty to defend was triggered. Upon review, the Supreme Court agreed with the Superior Court that AGLI's reading was the only reasonable reading, and accordingly, affirmed. View "Intel Corporation v. American Guarantee & Liability Insurance Co., et al." on Justia Law

This was an appeal from a post-trial decision and final judgment of the Court of Chancery that awarded more than $2 billion in damages and more than $304 million in attorneys' fees. The Court of Chancery held that defendants-appellants, Americas Mining Corporation (AMC), subsidiary of Southern Copper Corporation's (Southern Peru) controlling shareholder, and affiliate directors of Southern Peru (collectively, Defendants), breached their fiduciary duty of loyalty to Southern Peru and its minority stockholders by causing Southern Peru to acquire the controller’s 99.15% interest in a Mexican mining company, Minera Mexico, S.A. de C.V., for much more than it was worth (i.e., at an unfair price.). Plaintiff challenged the transaction derivatively on behalf of Southern Peru. The Court of Chancery found the trial evidence established that the controlling shareholder, Grupo Mexico, S.A.B. de C.V., through AMC, "extracted a deal that was far better than market" from Southern Peru due to the ineffective operation of a special committee. To remedy the Defendants’ breaches of loyalty, the Court of Chancery awarded the difference between the value Southern Peru paid for Minera ($3.7 billion) and the amount the Court of Chancery determined Minera was worth ($2.4 billion). Defendants raised five issues on appeal. Upon review, the Supreme Court determined that all of the Defendants' arguments were without merit. Therefore, the judgment of the Court of Chancery was affirmed. View "Americas Mining Corp. v. Theriault Southern Copper Corp." on Justia Law

Plaintiffs-Appellants WaveDivision Holdings, LLC and Michigan Broadband, LLC (collectively, "Wave") entered into two exclusive agreements with third-party Millennium Digital Media Systems, LLC ("Millennium") to purchase cable television systems from Millennium. Millennium terminated the agreements and pursued a refinancing with its note holders and senior lenders. In a separate proceeding, the Court of Chancery found Millennium liable to Wave for breach of contract and awarded Wave damages. Wave also brought an action in the Superior Court against Millennium's note holders and senior lenders, Defendant-Appellees Highland Capital Management L.P., Highland Crusader Funds, Highland Floating Rate Fund, Trimaran Capital Partners, L.P., and Pioneer Floating Rate Trust, (collectively, "Appellees"). Wave sought damages against Appellees, contending among other things, that the Appellees tortiously interfered with the Wave-Millennium contract. The Superior Court granted summary judgment to Appellees on this claim, concluding that any interference was justified under Delaware law and that Appellee Pioneer did not have actual or imputed knowledge of the underlying contract. Upon review, the Supreme Court agreed and affirmed the appellate court's decision. View "WaveDivision Holdings, LLC, et al. v. Highland Capital Management, L.P., et al." on Justia Law

Plaintiff Martin Marietta Materials, Inc. appealed a Chancery Court judgment granting Defendant Vulcan Materials Company relief on its counterclaims, and an accompanying injunction. The Chancery Court enjoined Martin for a four month period from continuing to prosecute its pending Exchange Offer and Proxy Contest to acquire control of Vulcan. That injunctive relief was granted to remedy Martin's adjudicated violations of two contracts between Martin and Vulcan: a Non-Disclosure Letter Agreement (the "NDA") and a Common Interest, Joint Defense and Confidentiality Agreement (the "JDA"). Finding that the Chancery Court did not abuse its discretion in holding that the equities favored Vulcan, the Supreme Court affirmed that court's decision. View "Martin Marietta Materials, Inc. v. Vulcan Materials Co." on Justia Law

Plaintiff Martin Marietta Materials, Inc. appealed a Chancery Court judgment granting Defendant Vulcan Materials Company relief on its counterclaims, and an accompanying injunction. The Chancery Court enjoined Martin for a four month period from continuing to prosecute its pending Exchange Offer and Proxy Contest to acquire control of Vulcan. That injunctive relief was granted to remedy Martin's adjudicated violations of two contracts between Martin and Vulcan: a Non-Disclosure Letter Agreement (the "NDA") and a Common Interest, Joint Defense and Confidentiality Agreement (the "JDA"). Finding that the Chancery Court did not abuse its discretion in holding that the equities favored Vulcan, the Supreme Court affirmed that court's decision. View "Martin Marietta Materials, Inc. v. Vulcan Materials Co." on Justia Law

Central Laborers instituted this action under Section 220 of the Delaware General Corporation Law, Del. Code Ann. tit. 8, section 220, to compel News Corp. to produce its books and records related to its acquisition of Shine. The court held that Section 220 permitted a stockholder to inspect books and records of a corporation if the stockholder complied with the procedural requirements of the statute and then showed a proper purpose for the inspection. Section 220 required a stockholder seeking to inspect books and records to establish that such stockholder had complied with the form and manner of making demand for inspection of such documents. Central Laborers had not made that showing. Because Central Laborers' Inspection Demand did not satisfy the procedural requirements of Section 220, it did not establish its standing to inspect the books and records of News Corp. On that basis alone, and without reaching the issue of proper purpose, the court affirmed the judgment. View "Central Laborers Pension Fund v. News Corp." on Justia Law