Topic: Chancery Court Rule 56(c)

Director’s Breach of Contract Lawsuit Found to Violate the Underlying Contract’s Confidentiality Clause

By: David Forney and Benjamin Kendall

In Cappella Holdings, LLC v. Anderson, C.A. No. 9809-VCS (Del. Ch. Nov. 29, 2017), the Chancery Court dismissed a director’s breach of contract claims against his former employer relating to alleged violations of an anti-dilution provision in his employment agreement.  The Court instead found that the director’s initial complaint, which included highly sensitive information about the company, violated the confidentiality provision of the underlying contract on which his claims were based.

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Fiduciary and Contractual Claims Arising from LLC Management Dispute Survive a Motion to Dismiss

By Scott Waxman and Ryan Drzemiecki

In an ongoing dispute between the members of a Delaware limited liability company, Vice Chancellor Parsons was tasked with resolving pre-trial motions filed by both the managing member defendants and the non-managing member plaintiffs. Except for plaintiffs’ claim of waste, V.C. Parsons denied the defendants’ Rule 12(b)(6) motion to dismiss finding that, drawing all reasonable inferences in favor of plaintiffs, facts have been pleaded that make the defendants’ inappropriate at this stage of the litigation.  In addition, V.C. Parsons denied plaintiffs motion of summary judgment, which sought to remove the defendant LLC from its position as managing member, finding that the plaintiffs have not yet produced evidence sufficient to meet their burden of showing that they are entitled to judgment as a matter of law.

This case involves an ongoing dispute between the managing member and non-managing members of Dunes Point West, LLC, a Delaware limited liability company (the “Company”). The Company was formed in 2006 to acquire and operate an apartment complex in in the State of Kansas (the “Apartment Complex”). Presently, Louis Cortese and the 2009 Caiola Family Trust (“Plaintiffs”) collectively hold 90% of the membership interests in the Company. Defendants include the Company’s managing member and holder of 10% of its membership interests, PWA, LLC, a Kansas limited liability company (“PWA”) and Ward Katz, the managing member of PWA.

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