Tornetta v. Musk: The Delaware Court of Chancery Reviews Executive Compensation to Controlling Stockholders
In Tornetta v. Musk, the Delaware Court ofChancery, addressing “issues of first impression inDelaware,” held that the rigorous entire fairnessstandard of review applies to a board’s executive compensationdecisions in respect of a controlling stockholder,absent compliance with the so-called MFWprocedural protections. Those protections involveconditioning a controlling stockholder transaction,at the outset of negotiations, on the obtainment of…
U.S. Department of Labor Issues Final Overtime Rule
The U.S. Department of Labor recently announced a final rule that updates the earning thresholds necessary to exempt executive, administrative, and professional employees from the Fair Labor Standards Act’s minimum wage and overtime requirements. It also allows employers to count certain nondiscretionary bonuses and incentive payments (including commissions) to satisfy a portion of the required salary…
Limited Liability Company Agreement for a Delaware Limited Liability Company with Protected Series
Advance Notice Bylaws: Who Will Suffer the Consequences of Stockholder Noncompliance?
In a recent decision, Bay Capital Finance v. Barnes and Noble Education, C.A. No. 2019-0539-KSJM (Del. Ch. Aug. 14, 2019) (transcript), the Delaware Court of Chancery interpreted and analyzed the effect of stockholder noncompliance with the express requirements of an advance notice bylaw. In its decision, the Court of Chancery closely scrutinized the particular facts and…
Death by a Thousand Cuts-Using Pretrial Motions to Gain Trial Advantage in Trade Secrets Litigation
In the English language, the phrase “death by a thousand cuts” is an idiom that refers to a series of bad events, none of which is devastating on its own but, when added together, result in disaster. In many large trials, this idiom is an appropriate metaphor for the use of pretrial motions. This is particularly…
Delaware Court of Chancery Addresses Director Questionnaire Requirements in Advance Notice Bylaws
In Saba Capital Master Fund, Ltd. v. BlackrockCredit Allocation Income Trust, the Delaware Courtof Chancery held that the failure by a shareholderseeking to nominate a competing slate of directors ina proxy contest to timely complete and return directorquestionnaires pursuant to the board’s requestfor additional information regarding the nomineesunder the company’s advance notice bylaw couldnot serve as…
Liquidated Damages in Delaware Real Estate Purchase and Sale Agreements
Most contracts for the purchase and sale of commercial real property include among the remedies for breach a provision for the seller to receive or retain the contract deposit as liquidated damages for the purchaser’s breach. At times, the contract will also provide for other remedies, whether damages or equitable relief (e.g., specific performance), in addition…
Judge Davis Dismisses Implied Covenant Claim, but Allows Contract Claims to Proceed Despite the Contract’s Purported Limitation on Damages
In WSFS Financial Corporation and Wilmington Savings Fund Society, FSB v. Great American Insurance Company, C.A. No. N18C-09-088 EMD [CCLD], Judge Davis granted in part and denied in part the defendant’s partial motion to dismiss the plaintiffs’ breach of contract and implied covenant of good faith and fair dealing claims. The action arose from an insurance…
Jury Awards $82.1 Million in Damages for Fraudulent Inducement in M&A Transaction
On June 24, 2019, Judge Carpenter (formerly one of the four CCLD panel members) concluded a jury trial in Bracket Holding Corp. v. Express Scripts, Inc., C.A. No. N15C-02-233 WCC CCLD. The genesis of the instant dispute began in 2012 when Express Scripts, Inc. expressed interest in acquiring United BioSource LLC. In 2013, Parthenon Capital Partners,…