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Theranos Headquarters

Delaware Court Blocks Theranos Tender Offer Ahead of Fraud Trial

By Tom McParland |

The Delaware Court of Chancery has stopped for now a tender offer that investors said would allow Theranos Inc. to "insulate itself" and hinder their ability to claw back a $96 million investment in the embattled blood-testing company.

Bouchard Tosses 'Unocal' Arguments in Merger Challenge, Favoring Business Judgment Rule

By Tom McParland |

The Delaware Court of Chancery has dismissed a lawsuit by former stockholders of Paramount Gold and Silver Corp., who had tried to sidestep the court's high bar for post-closing merger challenges.

Judge Sue Robinson from the District of Delaware

Judge Tosses Challenge to Chemours' Post-Spinoff Separation Plan

By Tom McParland |

A Delaware federal judge has dismissed a class action lawsuit from former employees of The Chemours Co. who said they were duped into taking a less generous buy-out deal as the chemical firm downsized after its spinoff from DuPont.

Judge Recommends Transfer of Farmers' Pesticide Case vs. Occidental

By Tom McParland |

A U.S. magistrate judge in Delaware has recommended that the court transfer a suit against Occidental Chemical Corp. related to toxic pesticide exposure to New York federal court, finding a lack of jurisdiction in Delaware.

Tamika Montgomery-Reeves.

Chancery Court Tosses Derivative Suit Over Loans to LLC

By Tom McParland |

The Delaware Court of Chancery on April 14 dismissed a derivative lawsuit by a creditor of a limited liability company, who tried to dissolve the firm in connection with allegations that its managing members had defrauded lenders and drained the company's assets.

Albert Manwaring of Morris James

Stockholder Vote Enjoined Over Banker's Financial Interest in Merger

By Albert H. Manwaring IV |

Investment bankers play a central role in the exploration, evaluation, selection and implementation of strategic alternatives for Delaware companies.

Francis G.X. Pileggi

Removal of Director, Members of Nonstock Corporation Invalid

By Francis G.X. Pileggi, Justin M. Forcier and Alexandra Rogin |

The Delaware Court of Chancery recently held that a pro se defendant was not effectively removed as a director, officer or member of a Delaware nonstock corporation, Rainbow Mountain Inc.

Rite Aid Not Required to Fund Ex-GC's Bid to Overturn Conviction

By Tom McParland |

The Delaware Supreme Court has rejected a former Rite Aid Corp. executive's bid to use a collateral attack on a final ruling to extend the period in which he could recover attorney fees from his former employer.

Lawyer Wins Skirmish in War Over Pinterest Concept

By Andrew Denney |

A lawyer who claims the concept for the popular web application Pinterest was stolen from him has won a preliminary ruling—extinguishing a cause of action advanced by his adversary—in his legal battle with an early investor in the idea-sharing platform. But the federal judge in the case called the skirmish a "lightweight exhibition" match and noted the main event in the litigation—a trade secrets lawsuit against the investor—lies ahead.

Philip R. Shawe is an owner and the innovation behind the largest translation company TransPerfect. (wikimedia)

Attorneys to Seek Shareholder Meeting to Resolve TransPerfect Conflict

By Tom McParland |

Attorneys for Philip R. Shawe are preparing to ask the Delaware Court of Chancery to order a shareholder meeting to elect a new slate of directors for TransPerfect Global Inc., to avoid a court-ordered sale of the profitable translation-service company, Shawe's lawyer said on Thursday.

Del. Supreme Court Upholds ETE's Exit From Williams Merger

By Tom McParland |

Over a strong dissent from its chief justice, the Delaware Supreme Court late Thursday upheld a vice chancellor's decision to allow Energy Transfer Equity to walk away from a once-promising merger with The Williams Cos. Inc. by a 4-1 vote.

Vice Chancellor Sam Glasscock III.

Glasscock Sends Question of Advancement Rights to Arbitration

By Tom McParland |

The Delaware Court of Chancery has sent to arbitration an advancement dispute stemming from the messy wind down of a hedge fund during the 2008 financial crisis, finding an agreement between the firm and its investors had overcome the presumption that the court should decide the matter of substantive arbitrability.

Kimberly A. Brown

Bankruptcy Court Upholds the Sanctity of the Final Order

By Kimberly A. Brown |

The U.S. Bankruptcy Court has denied a request by an Official Committee of Unsecured Creditors and its affiliated debtors-in-possession to reconsider and modify a final cash collateral order almost one year after its entry.

Justices Weigh Whether Company Must Pay for Ex-GC's Collateral Attack on Conviction

By Tom McParland |

In a long-standing row over indemnification, the Delaware Supreme Court is considering whether a collateral attack after a final ruling on direct appeal extended the period in which a former executive could seek attorney fees from his former employer.

U.S. Supreme Court Justice Stephen Breyer

Why Patent Ruling That 'Ignored' Supreme Court Precedent May Stand

By Ben Hancock |

The justices have shown no great deference to the Federal Circuit in recent years. Yet, they sound reluctant to overrule a 1990 decision that led to a crush of filings in the Eastern District of Texas.

Robert B. Little and Louis J. Matthews

Supreme Court Suggests Caution for MLPs in Conflicted Transactions

By Robert B. Little and Louis J. Matthews |

The Delaware Supreme Court recently reviewed the limited partnership agreement of a master limited partnership in the context of a conflicted transaction.

Corporate Franchise Tax Bill Rivals Carney's Proposal

By Tom McParland |

A group of Democratic lawmakers is seeking a steep increase to Delaware's corporate franchise tax, in a bill seemingly at odds with a plan championed by Gov. John Carney in his first budget proposal.

Questions Over Energy Company's Partnership Unit Issuances Headed to Trial

By Tom McParland |

Vice Chancellor Sam Glasscock III is leaving for trial open questions regarding the propriety of partnership unit issuances Energy Transfer Equity made in the run-up to its since-scuttled merger with The Williams Cos. Inc.

New FINRA Rules Address Financial Exploitation of Senior Investors

By Evan Charkes |

In recent years the SEC and FINRA have taken leadership roles in seeking to help senior investors become more cognizant of the dangers of financial exploitation and fraud.

Barry M. Klayman and Mark E. Felger

Dollar Cap on Committee Professional Fees Under Confirmed Plan

By Barry M. Klayman and Mark E. Felger |

U.S. Bankruptcy Judge Christopher S. Sontchi has held that absent specific language in a debtor-in-possession financing order, a carve-out for a fixed dollar amount for professional fees does not serve as a cap on the amount of fees to which a professional may be entitled once a Chapter 11 plan is confirmed.

Barry M. Klayman and Mark E. Felger

Dollar Cap on Committee Professional Fees Under Confirmed Plan

By Barry M. Klayman and Mark E. Felger |

U.S. Bankruptcy Judge Christopher S. Sontchi has held that absent specific language in a debtor-in-possession financing order, a carve-out for a fixed dollar amount for professional fees does not serve as a cap on the amount of fees to which a professional may be entitled.

Brian Arbetter and Samantha Beltre

Employer Tips for Minimizing Risks of Independent Contractors

By Brian Arbetter and Samantha Beltre |

In today's varying economic climate, many employers are using and misusing the concept of independent contractor to engage individuals to perform services.

P. Clarkson Collins Jr.

Del. Justices Award Attorney Fees Under Promissory Note Fee-Shifting Provisions

By P. Clarkson Collins Jr. |

Persuaded by the arguments of the appellant noteholders, the Delaware Supreme Court ruled that two fee-shifting provisions in the promissory notes entitled them to recover attorney fees the noteholders incurred filing suit to secure warrants issuable under the notes.

gavel

Merger Wipes Out Ex-Shareholder's Right to View Books and Records

By Tom McParland |

A former stockholder in Monster Worldwide Inc. lost standing to inspect corporate books and records, when the job-search service was acquired by a global human resources firm, the Delaware Court of Chancery ruled Monday.

Joseph M. McLaughlin and Yafit Cohn

Director Independence to Consider Pre-Suit Demand

By Joseph M. McLaughlin and Yafit Cohn |

A recent Delaware decision again signals those courts will closely scrutinize personal and business relationships that are asserted as compromising a director's ability to consider a pre-suit demand impartially.

patent stamp

Eastern Texas Still Patent Case Champ, According to Lex Machina Data

By Ben Hancock |

Overall patent filings dropped in 2016, a trend analysts attributed to a change in federal pleading requirements in December 2015.

DuPont Delays Close of Merger With Dow, Amid Deal With FMC

By Tom McParland |

DuPont on Friday announced it would buy FMC Corp.'s health and nutrition business and sell its own crop protection unit to the company in order to win European approval for its merger with Dow ChemicalCo., delaying the closing of the blockbuster deal.

Bill O'Reilly.

Derivative Litigation Over O'Reilly Seen as Longshot

By Tom McParland |

The reported $25 million parachute payment Bill O'Reilly received this week upon his ouster from Fox News in the wake of sexual assault allegations has generated plenty of headlines and public outcry. However, it was unlikely to expose the network's parent company to any significant liability from shareholder derivative suits, observers said on Friday.

Patricia A. Winston and Edward McNally, of Morris James

The Perils of Advancement

By Edward M. McNally and Patricia A. Winston |

There is perhaps one single obligation that most aggravates corporate boards of directors: Paying your opponent's legal fees when you are convinced he has done you wrong. How then is that not just possible, but a regular occurrence?

J. Travis Laster.

Laster Says Surveillance Docs Must Be Produced in Suit Over Control of Energy Co.

By Tom McParland |

Vice Chancellor J. Travis Laster on Monday panned as "not credible" William I. Koch's attempts to avoid turning over documents in a pitched battle over the future of Koch's Oxbow Carbon and ordered the billionaire to produce surveillance records and other information to minority investors fighting to sell their holdings.

James L. Hallowell and Lauren M. Sager

Justice Holland's Lasting Imprint on Corporate Law

By James L. Hallowell and Lauren M. Sager |

In early February, Justice Randy Holland, the longest-tenured member of the Delaware Supreme Court, announced his plans to retire at the end of March.

gavel and money

Ousted General Partner Not a Limited Partner After Ouster, Del. Supreme Court Says

By Tom McParland |

The Delaware Supreme Court ruled March 10 that a former general partner did not convert to a limited partner when forced out of a limited partnership, and was only entitled to a fraction of the compensation it sought from the company in a buyback of its interest.

Brett McCartney

Chancery Appoints Custodian to Dislodge Board Deadlock

By Brett M. McCartney |

Delaware law entrusts the management of a corporation to its board of directors. Not surprisingly, circumstances arise where a consensus among directors cannot be reached on major decisions impacting a company.

LONDON - MAY 21: IBM logo on the IBM Client Centre building on May 21, 2013 in London, UK. IBM is an American multinational technology and consulting corporation.

Federal Circuit Upholds Dismissal of Infringement Case Against IBM

By Tom McParland |

The U.S. Court of Appeals for the Federal Circuit has upheld a Delaware judge's ruling that a lack of clarity in claims for a patent covering anti-malware software doomed a company's infringement case against IBM.

Slights Green Lights Shareholder Suit That Alleged Board Conflict in Sale

By Tom McParland |

The Delaware Court of Chancery has allowed a former Saba Software Inc. stockholder to proceed with claims that the company rushed into a conflicted sale amid a regulatory crackdown, finding the director defendants were not entitled to the business-judgment deference, even though investors voted to approve the deal.

Stephen Plotnick and Alexander Malyshev.

New York's LLC Law Fosters Greater Certainty for Members and Their Rights

By Stephen M. Plotnick and Alexander G. Malyshev |

The LLC form is often favored because it offers a great deal of flexibility in how a business is to be governed and operated day-to-day.

Lewis H. Lazarus

Court Gives Great Weight to Pre-Merger Negotiations

By Lewis H. Lazarus |

Contract interpretation is a staple of litigation in the Delaware Court of Chancery. Disputes over the meaning of commercial contracts, foundational documents such as certificates of incorporation or bylaws or agreements governing alternative entities such as limited liability companies or limited partnerships require the court to interpret language in contracts. So too do merger, stock purchase or sale of asset agreements. With the expansion of jurisdiction under Section 111(a)(2) of the Delaware General Corporation Law (DGCL) in 2016, disputes over the interpretation of agreements arising out of stock purchase and asset sale agreements may be expected to increase the number of cases requiring the court to interpret parties' agreements. The recent case of Shareholder Representative Services v. Gilead Sciences, C. A. No. 10537-CB (March 15), illustrates the methodology the court uses to interpret a contract and provides a primer for litigants seeking guidance on how the Court of Chancery resolves contract disputes.

Judge Tosses Derivative Suit Over 'Excessive' Director Compensation

By Tom McParland |

The Delaware Court of Chancery has dismissed a derivative suit accusing Investors Bancorp Inc. directors of giving themselves a "grossly excessive" compensation hike following the firm's mutual-to-stock public offering.

Barry M. Klayman and Mark E. Felger

Delaware's Anti-SLAPP Statute Limited to Land Use Disputes

By Barry M. Klayman and Mark E. Felger |

In a rare case involving resort to a Delaware statute's legislative history, Vice Chancellor J. Travis Laster held that Delaware's anti-SLAPP statute is to be construed narrowly so as to be applicable only to public petition and participation in land use proceedings, and is not a broad legal protection against defamation claims.

Nova Presses Challenge to $2.5M Fee Award to Dow Chemical

By Tom McParland |

A lawyer for Nova Chemicals Corp. on Thursday asked the U.S. Court of Appeals for the Federal Circuit to undo a $2.5 million award of attorney fees to Dow Chemical Co., its opponent in a long-running patent dispute, which the Canadian plastics and chemicals firm had accused of perpetrating fraud against the court.

Strine Approves Attorney Fees for Aggrieved Noteholders

By Tom McParland |

The Delaware Supreme Court on Monday ruled noteholders who had secured warrants after an issuer defaulted on the debt are entitled to attorney fees. In so holding the high court reversed the Delaware Court of Chancery.

Court Rules That Professional Fees May Not Be Capped by Standard Carve-Out Provisions

By John C. Tishler and Tyler N. Layne |

Secured creditors and debtor-in-possession (DIP) lenders that rely on standard carve-out provisions to limit the impact of bankruptcy professional fees on their collateral would be well-advised to take notice of a U.S. Bankruptcy Court decision from earlier this year.

Del. Supreme Court Revives Challenge to $1B Pipeline Buyback

By Tom McParland |

The Supreme Court of Delaware Monday, in a decision reversing the Delaware Court of Chancery, rejected its own rigorous bad-faith pleading standard in a case involving a plaintiff's challenge to a conflicted transaction by a master limited partnership.

Teva Pharmaceuticals.

Stark Green Lights Infringement Claims Against Teva

By Tom McParland |

Teva Pharmaceuticals could not escape a patent infringement suit Monday, after a Delaware federal judge found there was enough evidence to suggest that the Israel-based generic drugmaker had tried to usurp the market for treating a disease without the proper approval.

Verizon headquarters

Court Finds Verizon's Insurers Liable for Up to $48M in Legal Fees

By Greg Land |

A ruling unsealed by a Delaware judge says that Verizon Communications is due what it claims are more than $48 million in attorney fees and expenses accrued successfully defending a lawsuit filed against the telecom giant after it spun off a subsidiary that later went bankrupt.

And Then There Were Three: Del.'s Judge Robinson Set to Retire

By Alan R. Silverstein and Stephanie E. O'Byrne |

On Feb. 3, Judge Sue L. Robinson, the longest-serving member of the U.S. District Court for the District of Delaware (and the district judge with the second-highest number of patent cases assigned on a per judge basis in the country) acquired another title—that of senior judge.

Vice Chancellor Joseph Slights.  Courtesy photo

Slights Awards Former CFO $1.8M in Indemnification Suit

By Tom McParland |

The Delaware Court of Chancery on March 3 awarded a former officer of OptimisCorp $1.8 million to cover the cost of successfully defending allegations that he had plotted to remove a physical services company's chief executive back in 2012.

Office Depot employee Derek Richardson straightens shelf items in the company's Tallahassee, Fla. store, Thursday, July 27, 2006.

Court Tosses Challenge to Del. Unclaimed Property Collection

By Tom McParland |

A Delaware federal judge has once again dismissed a challenge to the state's method for collecting unclaimed property, saying a company could not plausibly claim the scheme was pre-empted by federal law.