In a recent decision, the Delaware Court of Chancery held that a non-signatory subsidiary of one party to a contract could be bound by the forum selection clause in that contract where it directly benefited from the contract and it was clear from the circumstances surrounding the transaction that Continue Reading
Delaware Court of Chancery Declines to Apply Business Judgment Deference Due to Deficiencies in MFW Protections
On August 31, 2021, Vice Chancellor Sam Glasscock of the Delaware Court of Chancery declined to dismiss breach of fiduciary duty claims brought by a former minority stockholder of Isramco, Inc. (the “Company”), which challenged the Company’s take-private acquisition by Naphtha Israel Petroleum Corp. Continue Reading
Business Judgment Rule Applies Where Stockholder Failed to Plead Merger Was Interested Transaction
In Flannery v. Genomic Health, Inc., C.A. No. 2020-0492-JRS (Del. Ch. Aug. 16, 2021) (hereinafter Flannery), the Delaware Court of Chancery dismissed a complaint in which the plaintiff failed to adequately plead that a merger transaction was fundamentally unfair because it involved conflicted Continue Reading
New Federal “Mandates” for COVID-19 Vaccination: What Do Employers Need to Know Now?
On September 9, 2021, President Biden announced some sweeping changes in the way the federal government is combating the COVID-19 pandemic as part of the administration’s Path out of the Pandemic action plan. In addition to encouraging Americans to get vaccinated, the President announced the Continue Reading
Delaware Supreme Court Overrules Prior Precedent Regarding Stockholder Dilution Claims
The Delaware Supreme Court has overturned its long-standing decision in Gentile v. Rossette regarding “dual-natured” claims, undoing years of precedent regarding stockholder dilution claims that allowed stockholders to bring controller dilution claims directly. In Brookfield Asset Management Inc. Continue Reading
Disclaimed Traditional Fiduciary Duties in LLC Agreement Re-imposed on Manager by Contradictory Language in LLC Agreement
The Delaware Court of Chancery’s decision in Cadira Grp. Holdings, LLC Litig. reflects the importance of precision in addressing a manager’s fiduciary duties within the operating agreement of a Delaware limited liability company. In its latest decision concerning contractual fiduciary duties, the Continue Reading
Delaware Court of Chancery Endorses Reverse Veil-Piercing
The Delaware Court of Chancery has recognized, for the first time, that the equitable remedy of reverse veil-piercing is available under Delaware law. The court’s decision in Manichaean Capital, LLC v. Exela Technologies Inc., et al., 251 A.3d 694 (Del. Ch. May 25, 2021) (Slights, V.C.), endorsed Continue Reading
Approval of Conflicted Transaction by a Majority of LLC Members Does Not Disclaim Fiduciary Duties
The Delaware Court of Chancery reaffirmed a manager’s fiduciary duties of loyalty and care to members of a Delaware limited liability company in the absence of a clear and unambiguous disclaimer of fiduciary duties in the operating agreement. Under Largo Legacy Grp., LLC, a manager may be held Continue Reading
2021 Amendments to Delaware Corporate Law and Alternative Entity Statutes
The 2021 amendments to the Delaware General Corporation Law (the DGCL), the Delaware Revised Uniform Partnership Act (the DRUPA), the Delaware Revised Uniform Limited Partnership Act (the DRULPA), and the Delaware Limited Liability Company Act (the DLLCA and, together with the DRUPA and the DRULPA, Continue Reading
Massachusetts’ Strictest-in-the-Nation Definition of “Employee” May Encompass Franchise Operators
When a worker is classified as an employee, a panoply of local, state, and federal laws regulate many facets of the relationship between the worker and the person or entity the worker serves. When a worker is not an “employee,” on the other hand, government takes a much more hands-off approach, Continue Reading