Jeff Mordock  | Thursday, May 23, 2013
Delaware Business Court Insider

Three Delaware Supreme Court justices Wednesday focused their questioning on allegations that misconduct had been committed by plaintiffs in a lawsuit filed against a Texas medical device manufacturer, despite efforts to frame the argument as centering on whether the Court of Chancery entered an improper sanction when it dismissed the case over defectively-notarized verifications.    read more >>

Jeff Mordock  | Wednesday, May 22, 2013
Delaware Business Court Insider

The Delaware Court of Chancery has ordered Wal-Mart to release internal documents detailing its directors' knowledge of allegations that the company's Mexican affiliate, Walmex, bribed government officials in order to obtain permits to build stores in specific locations.   read more >>

James L. Hallowell and Justin Nematzadeh  | Wednesday, May 22, 2013
Delaware Business Court Insider

In orders issued in two recent high-profile shareholder actions, the Delaware Chancery Court provided new guidance regarding lead plaintiffs' shareholdings in representative proceedings. Addressing organizational matters in separate actions arising from proposed corporate transactions involving Dell Inc. and NYSE Euronext, Chancellor Leo E. Strine Jr. ordered restrictions on lead plaintiffs' trading in the relevant shares during the litigation's pendency.    read more >>

Jeff Mordock  | Wednesday, May 22, 2013
Delaware Business Court Insider

In a case of first impression, the U.S. Court of Appeals for the Third Circuit has ruled that a company's status as a qualified subchapter S subsidiary, or QSub, is not property and, therefore, cannot be included as part of the company's bankruptcy estate. The appellate court's decision reversed the Delaware bankruptcy court's ruling that allowed the owner of an Indiana casino to include its status as a QSub as part of the bankruptcy estate.   read more >>

Ashley R. Altschuler, Matthew S. Connors and Robert S. Ruff III  | Wednesday, May 22, 2013
Delaware Business Court Insider

As we previously wrote in the December 27, 2012, edition of the Delaware Business Court Insider, the highly-publicized decision concerning the application of collateral estoppel to Delaware shareholder derivative litigation, Louisiana Municipal Police Employees' Retirement System v. Pyott, 46 A.3d 313 (Del. Ch. 2012) — commonly known as Allergan — was the subject of an interlocutory appeal before the Delaware Supreme Court. On April 4, the Supreme Court, in an en banc opinion in Pyott v. Louisiana Municipal Police Employees' Retirement System, --- A.3d ---, 2013 Del. LEXIS 179 (Del. Apr. 4, 2013), reversed the Court of Chancery, holding that a California federal court's dismissal with prejudice of a shareholder derivative complaint for failure to plead demand futility precluded other shareholders of the same corporation from bringing the same claims in a subsequent derivative action in Delaware.   read more >>

Jeff Mordock  | Wednesday, May 22, 2013
Delaware Business Court Insider

The number of entities that formed as either a Delaware corporation or alternative entity increased in 2012, according to a new report issued by the Delaware Division of Corporations.   read more >>

Cory D. Kandestin  | Wednesday, May 22, 2013
Delaware Business Court Insider

An inherent tension exists between the Bankruptcy Code and the common-law doctrine of constructive trust. On the one hand, the Bankruptcy Code provides a broad scheme for ratable distribution among creditors. On the other hand, constructive trust law allows a creditor to recover from outside that scheme — and often in full — while its peers receive cents on the dollar. Yet, unlike an express or "real" trust, a constructive trust is a mere fiction, a remedy that courts invent after the fact to redress cases of unjust enrichment. From a creditor's perspective, constructive trusts are a tantalizing remedy, so it is important for both debtors and creditors to know when this remedy can be imposed.   read more >>

Jeff Mordock  | Wednesday, May 22, 2013
Delaware Business Court Insider

The Delaware Court of Chancery has ruled that Calpers, the California Public Employees' Retirement System, breached its contractual duty of good faith and fair dealing when it objected to paying a $52 million incentive distribution to a commercial real estate investment fund.   read more >>