Topic: Notice

In a $1.365 Billion Merger, the Target Company “Blindsided” the Proposed Buyer by Terminating the Merger Agreement and the Court Upheld the Termination; Court Requests Further Briefing re the $126.5 Million Reverse Termination Fee

By: Kevin Stichter and Tami Mack

In Vintage Rodeo Parent, LLC et al. v. Rent-A-Center, Inc., C.A. No. 2018-0927-SG (Del. Ch. March 14, 2019), the Delaware Court of Chancery (the “Court”) held that the target company Rent-A-Center, Inc. (“Rent-A-Center”) validly exercised its right to terminate the $1.365 billion merger under the merger agreement (the “Merger Agreement”) among Rent-A-Center and the proposed buyer Vintage Capital Management, LLC and certain affiliates (collectively, “Vintage”), despite Vintage’s claims that the term of the Merger Agreement had already been extended or, alternatively, that Rent-A-Center had not validly terminated.

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Chancery Court Enforces LLC Agreement, Further Demonstrating that LLCs are Creatures of Contract

By Scott E. Waxman and Priya Chadha

In A&J Capital, Inc. v. Law Office of Krug, C.A. No. 2018-0240-JRS (July 18, 2018), A&J Capital, Inc. (“A&J”) sought a declaratory judgment that it was improperly removed from its position as manager of LA Metropolis Condo, I LLC (the “Company”) because it was not given notice or an opportunity to be heard prior to removal.  Vice Chancellor Slights denied A&J’s motion for summary judgment, holding that A&J’s removal was proper under both the Company’s governing documents and common law.

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Strict Interpretation of Advance Notice Bylaws Guides Chancery Court in Issuing Preliminary Injunction and Partial Final Judgment Orders

By William Axtman and Ryan Drzemiecki

In the ongoing dispute of Opportunity Partners L.P. v. Hill International, Inc., Vice Chancellor J. Travis Laster granted plaintiff Opportunity’s motion for preliminary injunction with respect to an annual meeting of stockholders and defendant’s motion to enter the injunction order as partial final judgment for purposes of appellate review. In reaching its decision on the preliminary injunction, the Court relied on strict interpretation of defendant Hill’s advance notice bylaws.

Defendant’s advance notice bylaws provided that stockholders’ notice of business or nominees to be presented in an annual meeting must be furnished “not less than sixty (60) days nor more than ninety (90) days prior to the meeting,” with an exception that “in the event that less than seventy (70) days notice or prior public disclosure of the annual meeting is given or made to stockholders,” the stockholders’ notice would be considered timely if received “no later than the close of business on the tenth (10th) day” thereafter.

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