Archive: July 24, 2017

CHANCERY COURT VACATES ORDER OF DEFAULT JUDGMENT DUE TO LACK OF SUBJECT MATTER JURISDICTION

By: Annette Becker and Nolan Thomas
 
In Organovo Holdings, Inc., v. Georgi Dimitrov, C.A. No. 10536-VCL (Del. Ch. June 5, 2017), the Delaware Court of Chancery granted the defendant’s motion to vacate the entry of a default judgment entered against him, holding that the Court did not have subject matter jurisdiction over the case since the remedies sought by plaintiff were not equitable remedies that provided a basis for subject matter jurisdiction. The Court analyzed the means by which the Court of Chancery, a court of equity, could exercise subject matter jurisdiction over a case, and held that none of those existed in this case.

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Court of Chancery Dismisses Complaint Seeking to Enforce a Stockholder’s Section 220 Demand to Inspect the Books and Records of Fannie Mae on Issue Preclusion Grounds

By: David L. Forney and David Valenti

In Pagliara v. Federal National Mortgage Association, C.A. No. 12105-VCMR (Del. Ch. May 31, 2017) the Court of Chancery dismissed a complaint brought by a preferred stockholder of Federal National Mortgage Association (“Fanny Mae”) seeking to enforce his rights under Section 220 of the Delaware General Corporation Law to obtain documents (“Section 220 Demand”) to investigate certain actions of Fannie Mae on issue preclusion grounds.  The Court of Chancery ruled that a prior judgment of the Eastern District of Virginia was preclusive on the dispositive issue of whether Fannie Mae stockholders retained the right to obtain the corporate books and records of Fannie Mae under the Housing and Economic Recovery Act of 2008 (the “HERA”).

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