Delaware Court of Chancery Dismisses Derivative Complaint Alleging Stock Option Backdating

In Recent Opinions, the Delaware Court of Chancery Has Denied Motions to Dismiss Stockholder Complaints that Directors Who Approved Backdated or Spring-Loaded Options Had Breached Their Fiduciary Duties to their Corporations and Stockholders. The Authors Discuss These Cases and Review Other Possible Challenges to Option Grants under Delaware Law.…

The Delaware Bankruptcy Court may have the occasion to consider additional reclamation-related issues in the AMS case. The court recently approved the debtors’ request for certain uniform procedures for its consideration of all reclamation claims, pursuant to which the debtors are required to file a written report with the court proposing specific treatment for each…

Some have argued recently that Delawareis no longer the “knee jerk” forum of choice for bankruptcy filings. The argument is that recent Third Circuit rulingson substantive consolidation, the absolute priority rule and “deepening insolvency” make the Southern District of New York the better venue choice over Delaware. As discussed below, these criticisms fail to carefully analyze…

Litigating solvency can be a complicated endeavor. This article provides a general road map for proving solvency in the defense of preference and fraudulent transfer litigation. The three common measures of solvency are discussed: the “balance sheet” test; the “unreasonably small capital” test; and the “ability to pay debts” test. The article also provides practical suggestions…

Delaware Bankruptcy Court Denies Reclamation Claimant’s Request for Temporary Restraining Order Due to Lender’s Lien on Reclaimed Goods

The purpose of this article is to provide an overview of (i) the basic concepts of an Asset Protection Trust and (ii) the possible planning opportunities that may exist in creating such a Trust. Given our experience with the Delaware Qualified Dispositions in Trust Act (the “Act”) and the many unique advantages of Delaware law, we…

Deepening insolvency first appeared as a theory of damages. It rapidly expanded into an independent cause of action that threatened directors and officers of insolvent companies. Then, almost as rapidly, many courts abandoned it. Once seen as a potent plaintiff device for suits against officers and directors,1 deepening insolvency—in the latest stage of its evolution—has faded…

In the last few months, the United States District Court for the District of Delaware has issued a number of decisions of note in the intellectual property area.

In Stone v. Ritter, the Delaware Supreme Court affirmed the Court of Chancery’s dismissal of a complaint bringing a stockholders’ derivative action against fifteen current and former directors of AmSouth Bancorporation (“AmSouth”), a Delaware corporation.