U.S. Bankruptcy Judge Mary Walrath of the District of Delaware followed a growing line of precedent in ordering Wilmington Savings Fund Society FSB, as successor collateral and administrative agent under a term loan facility with TSA Stores Inc. and certain of its affiliates (the debtors), to produce documents in the possession of its predecessor agent.
In a case characterized as a "matter of great local interest," Bankruptcy Judge Kevin Gross determined a question of much wider interest to practitioners: whether a contract was void ab initio because the Delaware limited liability company that executed it had not yet been formed.
This article focuses on filings in the grocery and food distribution sector as companies struggle in the face of pricing fluctuations and increasing online competition. The column delves into the bankruptcy proceedings of Central Grocers, Rupari Food Services and Marsh Supermarkets.
The seemingly endless war between certain types of patent owners (often socalled "nonpracticing entities" or NPEs) and certain types of defendants (typically corporations perceived to have deep pockets) has been fought on many fronts over the last decades.
Two recent decisions of the Delaware Court of Chancery separated by only two weeks took seemingly contradictory positions regarding the extent to which corporate disclosures must be made clear in proxy statements and other SEC filings.
When is an extended family a control block? The Delaware Court of Chancery acknowledged that while familial relations among a group of stockholders are not per se sufficient to establish a controlling stockholder block, a family that regularly refers to itself as a single unit may constitute a controlling stockholder block.
Until the Delaware Supreme Court provides definitive word, managers and stockholders of Delaware corporations must make strategic decisions based on conflicting guidance on whether successive stockholders are barred from seeking to relitigate demand futility allegations.
The predominant approach in most jurisdictions to determine whether the dismissal of a derivative action based on the failure to adequately plead demand futility bars re-litigation of this issue in a subsequent derivative action brought by a different stockholder plaintiff is to apply the traditional legal test for issue preclusion.
In order for a creditor who supplies goods to a debtor within 20 days before the bankruptcy petition is filed to recover the value of the goods as a priority administrative expense under Section 503(b)(9) of the Bankruptcy Code, the debtor must have had physical possession of the goods and not merely constructive receipt.
In a case of first impression, Vice Chancellor Joseph R. Slights III of the Delaware Court of Chancery ruled that Section 204 of the Delaware General Corporation Law cannot be used to validate an "unauthorized" corporate act.
Companies often defend against stockholder requests to inspect books and records by contending that the plaintiff stockholder lacks a proper purpose or that his or her stated purpose is not the real purpose.
Sometimes more is not a good idea. That is the case when a complaint alleges multiple bases to invoke the jurisdiction of the Delaware Court of Chancery, but still fails to sustain that subject matter jurisdiction.
In In re Appraisal of PetSmart, one of Delaware's largest appraisal litigations in history, the Delaware Court of Chancery held that the deal price in PetSmart Inc.'s going-private transaction was the best evidence of fair value.
Mezzanine Debt versus Preferred Equity: which investment structure is utilized by the subordinate capital provider is often determined by the regulatory and other circumstances and objectives of the senior lender and not the preferences of the subordinate capital provider.
In a highly anticipated opinion that many observers expect will have a significant impact on patent litigation, the U.S. Supreme Court unanimously ruled that a domestic corporation resides only in its state of incorporation for purposes of patent venue.
Under a Delaware Supreme Court's decision, business judgment review applies to cleanse a fiduciary challenge to a noncontrol transaction that was approved by an uncoerced, fully informed, disinterested stockholder vote.
Under the Delaware Supreme Court's decision in Corwin v. KKR Financial Holdings, 125 A.3d 304 (Del. 2015), business judgment review applies to cleanse a fiduciary challenge to a noncontrol transaction that was approved by an uncoerced, fully-informed, disinterested stockholder vote.
In a recent unanimous decision that is still reverberating throughout the patent litigation world, the U.S. Supreme Court reversed the U.S. Court of Appeals for the Federal Circuit's broad interpretation of the patent venue statute, limiting a corporation's residence for the purpose of venue in patent cases to "only the state of incorporation."
Stockholders who believe that a board breached its fiduciary duties in connection with information provided to stockholders asked to vote for a merger transaction can either seek to enjoin the transaction or seek damages post-closing.
Franchising columnist Rupert M. Barkoff writes: There are many situations today where a group or a constituency wants to make sure that it has a voice at the decision-making table by having a representative on its franchisor's board of directors—a so-called "constituency director." Is this a good or bad idea?
By Jennifer H. Rearden, Jefferson E. Bell and Michael Marron
In a recent decision, the Delaware Supreme Court considered the "fundamental question" of whether "Delaware courts are required to treat insurance contracts that are part of a broad insurance program as legal documents with meaning that varies substantially based on where each claim happens to arise."
In a recent opinion, U.S. Bankruptcy Judge Christopher Sontchi of the District of Delaware addressed the interesting issue of the applicability and scope of the sovereign immunity of Indian tribes in the context of preference actions brought by a Chapter 11 trustee.
By Christopher B. Chuff, Joanna J. Cline, Douglass D. Herrmann and James H.S. Levine
A recent decision by the Delaware Court of Chancery serves as a reminder that boards of directors of Delaware corporations should consider amending their company's director compensation plans to include specific limits on the amount of compensation that a director may be awarded in a given year.
The U.S. Supreme Court will soon decide whether the plain language of the patent venue statute—or the Federal Circuit's 27-year-old deviation from it—will dictate the appropriate venue for patent infringement litigation.
The D.C. District Court potentially has upended an assumption in bankruptcy courts, suggesting that in many cases, they lack that authority under Article III of the U.S. Constitution to enter a final order granting non-debtor, third-party releases, at least without the affected party's consent.
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.
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.
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.
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.
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.