Archive:July 17, 2017

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COURT BALKS AT ARTFUL PLEADING: COURT OF CHANCERY LACKED SUBJECT MATTER JURISDICTION TO HEAR ACTION FOR COLLECTION OF DEBT
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Court of Chancery Denies Motion to Dismiss Claim Alleging that General Partner Breached Contractual Duty of Good Faith

COURT BALKS AT ARTFUL PLEADING: COURT OF CHANCERY LACKED SUBJECT MATTER JURISDICTION TO HEAR ACTION FOR COLLECTION OF DEBT

By Scott E. Waxman and Max E. Kaplan

In Yu v. GSM Nation, LLC, C.A. No. 12293-VCMR (Del. Ch. July 7, 2017), the Court of Chancery dismissed the complaint for lack of subject matter jurisdiction.  Looking at the complaint holistically, the Court found plaintiff’s nominal pleading of equitable claims and relief insufficient to create jurisdiction where the alleged non-repayment of debt could be adequately remedied at law.

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Court of Chancery Denies Motion to Dismiss Claim Alleging that General Partner Breached Contractual Duty of Good Faith

By: Scott Waxman and Zack Sager

In Morris vs. Spectra Energy Partners (DE) GP, LP, the Court of Chancery of the State of Delaware found that a limited partner adequately pled that the general partner of a master limited partnership breached its contractual duty to act in good faith in connection with a conflicted transaction between the master limited partnership and the indirect parent of the general partner.  The Court also dismissed claims for breach of the implied contractual covenant of good faith and fair dealing and tortious interference with a partnership agreement.

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