Third Circuit Rules On Important Parent/Subsidiary Privilege Issues

In the past few months, the Delaware courts have issued several opinions that raise important issues for Delaware corporations and their advisors.

In three recent cases, the Delaware Chancery Court provides significant guidance regarding the review and effectiveness of “go shop” provisions, which generally permit target boards of directors to solicit competing bids for a specified period of time following the execution of a merger agreement.…

Delaware Court of Chancery Enjoins Merger Vote Pending Supplemental Disclosure and Release of Competitor From Standstill to Permit it to Make a Competing Offer

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