Tag: Aiding and Abetting

Court of Chancery Hesitates to Dismiss Lawsuit, Stays Litigation Pending Texas Lawsuit

By: Scott E. Waxman and Marissa Leon

In EnVen Energy Corporation v. David M. Dunwoody, Jr., et al. (C.A. No. 2019-0579-KSJM), the Delaware Court of Chancery (the “Court”) stayed litigation pending the outcome of a separate lawsuit filed in Texas to give deference to a plaintiff’s chosen forum, to avoid wasting judicial resources and to foreclose potential conflicting rulings.

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Court Reviews Fiduciary Disclosure Obligations in Connection with Seeking Investments

By Annette E. Becker and Samira F. Torshizi

In Clark v. Davenport, C.A. No. 2017-0839-JTL (Del. Ch. July 18, 2019), the Delaware Court of Chancery ruled on a motion to dismiss claims brought by Plaintiff Kenneth Clark (“Clark” or “Plaintiff”) against former officers, directors, and controlling stockholders of a now-defunct Basho Technologies Inc. (“Basho”) by an investor, who accused defendants of violating their fiduciary duties and committing fraud by inducing plaintiff to invest millions in what defendants knew was a failing enterprise.  The motions to dismiss were granted in part and denied in part dependent on the involvement of the particular defendant in the scheme. 

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Activist Stockholder Aided and Abetted a Board’s Breach of Fiduciary Duties but the Court Finds No Damages

By: Jill B. Louis and Alexander J. Chern

In In re PLX Technology, Inc. Stockholders Litigation, C.A. No. 9880-VCL (Del. Ch. October 16, 2018), the Delaware Chancery Court found that the actions of an activist stockholder in the context of a sale transaction aided and abetted the defendant board of directors in a breach of its fiduciary duty of disclosure but that there was insufficient evidence that the breach ultimately resulted in damages.

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CHANCERY COURT EVALUATES OBJECTIVE FACTORS TO DETERMINE PARTNERS’ SUBJECTIVE BELIEFS

By: Scott Waxman and Hillary Dawe

Dieckman v. Regency GP LP, et al. came before the Delaware Court of Chancery as a dispute over a merger between Energy Transfer Partners, L.P. (“ETP”) and Regency Energy Partners LP (“Regency”) for an exchange ratio of 0.4066 and a cash payment of $0.32 per common unit of Regency (the “Merger”).

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MULTI-BILLION DOLLAR INVESTMENT MANAGER AND DIRECTORS REMAIN AT RISK

By: Kevin Stichter and Samira Torshizi

In Cumming v. Edens, et al., C.A. No. 13007-VCS (Del. Ch. Feb. 20, 2018), the Court of Chancery denied a motion to dismiss a derivative suit for breach of fiduciary duties brought by a stockholder of New Senior Investment Group, Inc. (“New Senior”) against New Senior’s board of directors (the “Board”) and related parties in connection with New Senior’s $640 million acquisition of Holiday Acquisition Holdings LLC (“Holiday”). The Court made clear that compliance with Section 144 does not necessarily provide a safe harbor against claims for breach of fiduciary duty and invoke business judgment review of an interested transaction. Because the complaint alleged with specificity “that the Board acted out of self-interest or with allegiance to interest other than the stockholders,” the court applied the entire fairness standard of review and concluded that the transaction was not fair to New Senior stockholders. Read More

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