The COVID-19 pandemic is shaking up M&A transactions and the Court of Chancery has seen a sudden uptick in litigation. In a recently published article, two of my Fox Rothschild colleagues – Chaney Hall and Katelyn Crawford – note that buyers with cold feet are invoking their agreement’s material adverse effect clauses (MAE) to justify
Mergers and Acquisitions
Chancery Addresses Fraud Claims in the Inducement of a Merger
By Carl Neff on
Posted in Case Summaries, Mergers and Acquisitions
In the recent decision of LVI Grp. Inv., LLC v. NCM Grp. Holdings, LLC, et al., C.A. No. 12067-VCG (Del. Ch. Mar. 28, 2018), the Court of Chancery considered fraud claims in the inducement of a merger. In ruling on a motion to dismiss filed by certain principals, the Court addressed the scope of…
Pre-Merger Suit Deemed Premature by Chancery, Dismissal Granted
By Carl Neff on
Posted in Mergers and Acquisitions
In a recent decision by the Delaware Court of Chancery, In re Straight Path Commc’ns Inc. Consol. S’holder Litig., Civil Action No. 2017-0486-SG (Del. Ch. Nov. 20, 20107), Vice Chancellor Glasscock stayed consideration of a pre-merger complaint brought by a stockholder, alleging claims that the controlling shareholder obtained a side deal at the expense…
Delaware Supreme Court Addresses the Implied Covenant of Good Faith and Fair Dealing
By Carl Neff on
Posted in Case Summaries, Mergers and Acquisitions
In a very recent Delaware Supreme Court decision, Dieckman v. Regency GP LLC, et al., No. 208, 2016 (Del. Jan. 20, 2017), the High Court reversed the Court of Chancery and upheld claims based upon breach of the implied covenant of good faith and fair dealing. The decision is noteworthy because the limited partnership…
Business Judgment Rule Applied When Disinterested Majority Approved Merger In Fully-Informed and Uncoerced Vote
By Carl Neff on
Posted in Mergers and Acquisitions
As set forth in the Delaware Supreme Court decision of Corwin v. KKR Fin. Holdings LLC, 125 A.3d 304 (Del., 2015), a board’s decision to approve a merger transaction is subject to business judgment rule presumption when the merger was approved by a disinterested majority of the company’s stockholders in a fully-informed and…
Chancery Dismisses Complaint Alleging Breach of Duty of Disclosure Regarding Short-Form Merger
By Carl Neff on
Posted in Appraisal Actions, Mergers and Acquisitions
In the first Chancery opinion of 2017, Vice Chancellor Montgomery-Reeves granted dismissal of a class action complaint which alleged breach of the duty of disclosure in connection with a short-form merger, in the decision of In re United Capital Corp. S’holders Litig., Cons. Case Nos. 11619-VCMR (Del. Ch. Jan. 4, 2017).
Lead Plaintiff Louis…
Mootness Fee Awarded for Helpful Disclosures that Provided Benefit to Stockholders
By Carl Neff on
Posted in Derivative Actions, Mergers and Acquisitions
In 2016, beginning with In Re Trulia Inc. Stockholder Litigation, C.A. No. 10020-CB (Del. Ch. Jan. 22, 2016) (see blog post here), the Court of Chancery has issued a wave of decisions analyzing the granting of fees in the context of disclosures. In Trulia, the Court of Chancery set forth the standard that…
Chancery Discusses Valuation Methods
By Fox Rothschild LLP on
John O’Toole writes:
In In re Appraisal of DFC Global Corp., the Court of Chancery conducted an in-depth analysis of three common valuation methodologies—discounted cash flow analysis, multiples-based comparable company analysis, and deal price. After discussing how each methodology was and should be applied, Chancellor Bouchard ultimately determined that although “all three metrics…
Chancery: § 251(h) Tender Offers Get Irrebuttable Business Judgment Review
By Fox Rothschild LLP on
John O’Toole writes:
In In re Volcano Corporation Stockholder Litigation, the Court of Chancery held that stockholders’ acceptance of tender offers as part of mergers accomplished under § 251(h) of the Delaware General Corporation Law (“DGCL”) “has the same cleansing effect as a stockholder vote in favor of a transaction.” C.A. No. 10485-VCMR, 2016…
Fee-Shifting Ban May Put Delaware’s Corporation-Friendly Status in Question
By Carl Neff on
Delaware, a state often considered an incorporation “mecca” with its favorable tax laws, preeminent business court and unified body of corporate law, has recently enacted a controversial statute that may call the state’s corporation-friendly reputation into question. On June 11, 2015, the Delaware General Assembly approved legislation to effectively prohibit fee shifting bylaw provisions in…