In Perry v. Neupert, the Delaware Court of Chancery found that it could exercise personal jurisdiction over a Liechtenstein entity under the conspiracy theory of jurisdiction. In reaching this conclusion, the Court analyzed the effects of an assignment by a sole member of a Delaware limited liability company of its entire limited liability company interest to a single assignee under the Delaware Limited Liability Company Act currently in effect and in effect prior to the 2016 amendments thereto.Read More
In Eagle Force Holdings, LLC v. Campbell, No. 10803-VCMR (Del. Ch. Ct. September 1, 2017), the Court of Chancery dismissed plaintiffs’ breach of contract and fiduciary duty claims against the defendant due to a lack of personal jurisdiction over the defendant. Plaintiffs argued the defendant consented to personal jurisdiction in Delaware by entering into the (1) Contribution and Assignment Agreement (the “Contribution Agreement) and (2) Amended and Restated Limited Liability Company Agreement (the “LLC Agreement,” and together with the Contribution Agreement, the “Transaction Documents”), but the Chancery Court found the Transaction Documents to be missing material terms and, thus, held them to be unenforceable.
In Terramar Retail Centers, LLC v. Marion #2-Seaport Trust U/A/D/ June 21, 2002, Civil Action No. 12875-VCL (Del. Ch. August 18, 2017), the Delaware Court of Chancery denied an out-of-state defendant’s motion to dismiss for lack of personal jurisdiction, finding that defendant’s trustor was actively involved in negotiating both the underlying business deal and the terms of the operating agreement of the Delaware limited liability company at issue. Read More
By order dated August 4, 2017, Vice Chancellor Slights dismissed the complaint seeking to enforce non-compete and non-solicitation provisions in a stockholders’ agreement in EBP Lifestyle Brands Holdings, Inc. v. Boulbain, C.A. No. 2017-0269-JRS (Del. Ch. Aug. 4, 2017), finding that the Delaware Chancery Court lacked personal jurisdiction over the defendant. Specifically, the Court held that defendant’s execution of a stockholders’ agreement governed by Delaware law and concerning a Delaware corporation was insufficient to satisfy the statutory and constitutional requirements to establish personal jurisdiction over an individual not resident or transacting business in Delaware.
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.
The Delaware Court of Chancery held that it lacked personal jurisdiction over the defendant because the allegations failed to show that the defendant possessed the necessary “control” or “decision-making” capability required for “material participation” under the Delaware Limited Liability Company Act’s (the “LLC Act”) implied consent provision.
In Konstantino v. AngioScore, Inc. v. Quattro Vascular PTE Ltd, et al., the Delaware Court of Chancery reviewed a motion to dismiss filed by three Singapore entity defendants seeking dismissal of a third party claim brought by AngioScore, Inc. (“AngioScore”) for lack of personal jurisdiction and by the Singapore entity defendants and a Delaware entity defendant for failure to state a claim for contribution and tortious interference with contract in connection with the manufacture and sale of a competing product. The Court of Chancery denied the third party defendants’ motion in part, holding that the Court had personal jurisdiction over the three Singapore entity defendants under the conspiracy theory of jurisdiction, and that AngioScore stated a claim for contribution from all of the third party defendants, and granted the motion in part, holding that AngioScore had not stated a claim for tortious interference with contract.
Lucas v. Hanson involves two procedural questions – standing and personal jurisdiction – with respect to the plaintiff’s claims for declaratory and injunction relief against the forced distribution of assets of a limited partnership, Covenant Investment Fund LP (“Covenant”), to its limited partners. Prosapia Capital Management LLC (“Prosapia Capital”) is the general partner and limited partner of Covenant, and a wholly owned subsidiary of Prosapia Financial LLC (“Prosapia Financial”). The plaintiff, Alan Lucas, is a member of Prosapia Financial and the manager of both Prosapia Capital and Prosapia Financial. The defendants are limited partners of Covenant, none of whom are residents of Delaware or involved in the management of Covenant. Following Mr. Lucas’ criminal conviction in Iowa for theft involving expenditures and the liquidation of Covenant’s funds and assets, the Iowa courts declared that the cash held in Covenant’s accounts was the property of its limited partners and should have been distributed to the defendants.