Branch Captive and Agency Captive Insurance Companies Now Expressly Permitted in Delaware
On Monday, May 3, 2010, Governor Markell of Delaware signed into law House Bill 314 amending the Delaware Revised Captive Insurance Company Act.
Delaware Proposes Significant Changes to Chronic Violator Law
Legislation was introduced on May 4, 2010 the Delaware General Assembly that would significantly revise the State's "chronic violator" enforcement program.
The Implied Covenant of Good Faith and Fair Dealing: Nemec v. Shrader
In Nemec v. Shrader, Nos. 305, 2009 & 309, 2009 (Del. Apr. 6, 2010), the Delaware Supreme Court, in a 3-2 split decision, affirmed the dismissal of a complaint by former officers against Booz, Allen & Hamilton Inc. and its board of directors for failure to state a claim, holding that the directors did not breach…
Fiduciary Duties to Preferred Stockholders in a Merger: LC Capital Master Fund, Ltd. v. James
In LC Capital Master Fund, Ltd. v. James, C.A. No. 5214-VCS (Del. Ch. Mar. 8, 2010), the Delaware Court of Chancery denied a preferred stockholder’s motion to enjoin the acquisition of QuadraMed Corporation by affiliates of Francisco Partners II, L.P., holding that the directors fulfilled the limited fiduciary duties owed to the preferred stockholders in approving…
The New Revlon: Court of Chancery Guidance Regarding Pursuit of Stockholder Litigation
In In re Revlon, Inc. Shareholders Litigation, Consol. C.A. No. 4578-VCL (Del. Ch. Mar. 16, 2010), the Court of Chancery replaced lead representative plaintiffs and their counsel after concluding that the plaintiffs and their counsel failed to litigate the case adequately and exaggerated their litigation efforts in filings submitted to the Court. The case arose after…
Special Litigation Committee Investigations: London v. Tyrell
In London v. Tyrell, C.A. No. 3321-CC (Del. Ch. Mar. 11, 2010), the Court of Chancery denied a special litigation committee’s (“SLC”) motion to dismiss, finding that there were material questions of fact regarding the SLC’s independence and the reasonableness and good faith of its investigation. This action, brought by two former directors individually and derivatively…
Insider Trading Fiduciary Duty Claims: Pfeiffer v. Toll
In Pfeiffer v. Toll, C.A. No. 4140-VCL (Del. Ch. Mar. 3, 2010), the Delaware Court of Chancery reaffirmed the right of a Delaware corporation, under Brophy v. Cities Service Co., 70 A.2d 5 (Del. Ch. 1949), to recover from its fiduciaries for harm caused by insider trading, and rejected the defendants’ position that Brophy…
2010 Amendments to the DGCL: Nonstock Corporations, Short Form Mergers, Indemnification and Other Changes
Nonstock Corporations The General Corporation Law of the State of Delaware (the “DGCL”) has long contained provisions for both corporations authorized to issue capital stock and corporations not authorized to issue capital stock (commonly known as nonstock corporations). Among the proposed 2010 amendments is a comprehensive revision of the DGCL intended to make consistent the DGCL’s…
Recent Delaware Corporate Law Decisions and 2010 Amendments to the DGCL
During the past few months, several cases in the Delaware courts have raised important issues for Delaware corporations and their advisors.
Preferred Stockholder Consent Rights: Fletcher International, Ltd. v. ION Geophysical Corp.
In Fletcher International, Ltd. v. ION Geophysical Corp., C.A. No. 5109-VCP (Del. Ch. Mar. 24, 2010), the Court of Chancery held that a company’s issuance of a promissory note convertible into common stock likely violated a contractual right of the company’s preferred stockholder to consent to the issuance of “any security,” but declined to issue a…