Tag: Public Policy

COURT OF CHANCERY APPLIES POLITICAL QUESTION DOCTRINE IN DEFERRING TO U.S. PRESIDENT’S RECOGNITION OF VENEZUELAN PRESIDENT AND HOLDS THAT EXTRA-TERRITORIAL EFFECTS DO NOT PRECLUDE APPLICATION OF THE ACT OF STATE DOCTRINE

By: CJ Voss and Teresa Teng

In Jiménez v. Palacios et al., C.A. No. 2019-0490-KSJM (Del. Ch. Aug. 2, 2019), the Delaware Court of Chancery accepted as binding the U.S. President’s recognition of a foreign government and upheld the validity of that government’s appointments to the board of directors of a state-owned oil company. In turn, the state-owned oil company could validly appoint the board of directors of its Delaware subsidiaries. However, the court determined that the consents appointing the boards of directors of the Delaware subsidiaries were not appropriately considered on a motion for judgment on the pleadings and granted the plaintiffs the opportunity to identify facts in dispute foreclosing summary judgment in favor of the defendants. 

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Chancery Court Denies Appraisal Rights Where a Stockholders’ Agreement Requires that Stockholders Refrain from Appraisal Petition

By: Annette Becker and Will Smith

In a letter opinion, Manti Holdings, LLC et al. v. Authentix Acquisition Co, Civil Action No. 2017-0887-SG (Del. Ch. October 1, 2018), the Delaware Court of Chancery denied the petitioning stockholders’ cross-motion for statutory appraisal rights under Section 262 of the DGCL, ruling that the stockholders were contractually barred from asserting such rights regarding a merger of respondent Authentix Acquisition Co. (the “Company” and “Respondent”).  The Court held that the terms of a stockholders agreement (the “SA”) imposed a duty on Manti Holdings, LLC and the other moving stockholders (“Petitioners”) to forebear from the exercise of their appraisal rights, and granted Respondent’s motion for partial summary judgment on the statutory entitlement to appraisal rights.

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