Since its founding, Richards, Layton & Finger has played a leading role in shaping Delaware’s corporate law. That role is based on the firm’s deep understanding of the statutory and common law governing Delaware corporations, its transactional expertise, and its familiarity with Chancery practice. Richards Layton’s corporate litigators have handled many of Delaware’s landmark corporate cases, among them well-known cases such as Lyondell, Disney, Mentor Graphics, Caremark, Pure Resources, Emerald Partners, Paramount/QVC, Paramount/Time, Frontier, Unocal, Moran v. Household, Siliconix, Barkan and Kahn v. Lynch.
But the firm’s Chancery Court litigation attorneys are not limited to corporate law. Richards Layton also handles a significant number of cases involving Delaware limited liability companies and Delaware limited partnerships. The firm’s Chancery expertise also leads to significant roles in major commercial litigation brought in Delaware’s other courts.
The attorneys at Richards Layton are fully versed in the complexities and nuances of Delaware law; they are also knowledgeable about the state’s courts and judges. Delaware enjoys a reputation of having the best and most effective court system in the country, with the Court of Chancery, the Superior Court and the Supreme Court each possessing excellent reputations. While Richards Layton’s corporate practice focuses on the Court of Chancery, the firm’s attorneys are equally at home in the Supreme Court and the Superior Court.
CASE STUDY: Deciding Fiduciary Duty Requirements in an Acquisition
- Issue: Our client, facing liquidity issues, was under pressure to find an acquirer to avoid filing bankruptcy. With only two bidders left, our client’s board chose the bidder with the lower but more certain bid and, as required by the merger agreement, secured stockholder consent for the merger within 24 hours of adopting the merger agreement.
- Challenge: Plaintiffs sued in the Delaware Court of Chancery, arguing that, in agreeing to the provision requiring stockholder consent within 24 hours, our client’s board had improperly contracted away its fiduciary duties in violation of Delaware law.
- Solution: We argued that Delaware law required no particular period of time between a board’s authorization of a merger agreement and the stockholder vote and that, in light of the company’s liquidity issues, the quick stockholder vote was necessary and advisable.
- Result: The Court of Chancery agreed and declined to enjoin the merger.
Areas of Focus
While the firm’s attorneys are involved in every aspect of corporate litigation in the Court of Chancery, we have extensive experience in litigating in three major areas:
- Mergers and acquisitions, where the firm’s attorneys have represented both buyers and sellers, as well as their boards and various special and transaction committees
- Corporate governance litigation, where the firm’s attorneys have represented corporations, their boards and special litigation committees in stockholder suits
- General commercial litigation involving Delaware entities, where the firm’s attorneys have represented both sides in major contractual or transactional litigation.
Corporate litigators at Richards Layton also handle many other types of corporate cases, including corporate disclosure cases, Section 145 indemnification/advancement cases, Section 220 cases involving books and records demands, and Section 225 cases involving contested elections of directors. Outside the courtroom, the firm’s attorneys put their experience to work in assisting committees of boards of directors formed to negotiate transactions or investigate alleged corporate wrongdoing. While the firm typically represents corporations and their elected representatives, Richards Layton also regularly represents large institutional investors as plaintiffs in suits against corporations and other Delaware business organizations.
CASE STUDY: Clarifying Fiduciary Duty Standards
- Issue: Our client’s board of directors approved a new president’s employment agreement that provided for a large severance payment when the president was later terminated by the company’s CEO.
- Challenge: Stockholders sued in the Delaware Court of Chancery, alleging that the board of directors had breached their fiduciary duty of care and had acted in bad faith.
- Solution: In a trial lasting over two months, we defended the directors, emphasizing that the board’s decision should be granted the presumption of the business judgment rule since the directors had followed the necessary decision-making process and had not consciously disregarded their fiduciary duties.
- Result: The Court of Chancery exonerated our client’s directors on all counts after trial, and we successfully defended that decision before the Supreme Court of Delaware.
Procedural Knowledge and Court Experience
Other firms may have Delaware offices, but Richards Layton’s exclusive focus on Delaware and its integral role in Delaware’s legal landscape provide our attorneys a deep, practical understanding of Delaware’s courts. The firm’s litigators are versed in the formal procedures and customary practices of the Court of Chancery and the other Delaware courts.
Judgments from the Court of Chancery and the Superior Court may be appealed directly to the Supreme Court, so the firm’s litigators regularly appear in the Supreme Court, representing appellees and appellants in the state’s most sophisticated and complex disputes. Each appeal in the Supreme Court is typically handled by the same Richards Layton attorneys who handled the case below, ensuring that the appeal is handled efficiently and effectively. For example, in a major fiduciary duty dispute, tried over a span of two and a half months (the second-longest Chancery Court trial on record), Richards Layton’s trial team successfully defended the Chancery Court’s judgment on appeal.
When necessary, our corporate litigators also represent the firm’s clients in other courtrooms around the country, as well as the federal courts in Delaware, including the Bankruptcy Court and the District Court for the District of Delaware.
CASE STUDY: Defining Financial Disclosure Requirements
- Issue: Our client acquired another company, whose board approved the transaction after considering a fairness opinion from its financial advisor.
- Challenge: Stockholders of the acquired company sued to stop the acquisition in the Delaware Court of Chancery, alleging that the financial projections used in preparing the fairness opinion should have been disclosed to the stockholders.
- Solution: We argued that the proxy statement adequately summarized the basis for the fairness opinion and that Delaware law required no more.
- Result: The Court of Chancery agreed and declined to enjoin the merger.
Summary: Deep Understanding
Our firm’s in-depth understanding of Delaware corporate law (and the courts that make it) is an advantage when our clients face complex litigation involving high stakes and novel issues of law. Our corporate litigators are recognized experts. They publish books and articles on these topics, and they are involved in shaping the law—through both the courts and the legislature. Richards Layton attorneys are known for their insight on Delaware law, and they require no learning curve to provide thorough analysis and innovative solutions more quickly and cost-effectively than other firms.
National and international businesses, and the law firms that represent them, seek Richards Layton’s advice in bet-the-company litigation. And our long history of successful results justifies their confidence.