Third Circuit Holds Structured Dismissal Deviating from Bankruptcy Code Priority Scheme May Be Utilized in Appropriate Circumstances

On May 21, 2015, the United States Court of Appeals for the Third Circuit answered the long-asked question of whether structured dismissals are permissible under the Bankruptcy Code with a resounding yes.  In so ruling, the Third Circuit stated: “[W]e believe the Code permits a structured dismissal, even one that deviates from the § 507 priorities, when a bankruptcy judge makes... Continue Reading

Effective Communication Styles for Women Attorneys

In cooperation with the American Intellectual Property Law Association, Morris Nichols hosted a networking event and dinner in Wilmington, Del. as part of the 2015 Women in Intellectual Property Global Networking Event on May 21, 2015.  Morris Nichols partner Karen Jacobs moderated the panel discussion “Effective Communication Styles for Women Attorneys” featuring... Continue Reading

Delaware Supreme Court Issues Important Opinion on Interested Transactions

In an opinion on a consolidated appeal in In re Cornerstone Therapeutics Inc. Stockholder Litigation and Leal v. Meeks, the Delaware Supreme Court held that, regardless of the underlying standard of review (including in interested transactions subject to entire fairness review), a claim solely for monetary damages against a facially independent director of a corporation with an exculpatory charter... Continue Reading

Court of Chancery Approves Settlement of Stockholder Challenge to “Dead Hand Proxy Put” and Offers Important Guidance on Prior Ruling

In approving a settlement of a stockholder class action challenging a so-called “dead hand proxy put” provision in a credit agreement between Healthways, Inc. and SunTrust Bank, Vice Chancellor J. Travis Laster provided important guidance regarding his prior ruling in the same case denying defendants’ motions to dismiss – a decision which he stated “was probably one... Continue Reading

Delaware Bankruptcy Court Reins in Hold-Out Leverage

In a case of first impression, Chief Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware ruled on Dec. 18, 2014, that Delaware corporate law’s “entire fairness” test, which is utilized to evaluate self-dealing transactions, is inapplicable to the Bankruptcy Code’s requirement that a plan be “proposed ... not by any means forbidden by... Continue Reading

Trust Decanting: Flexibility and Danger: Achieving Tax Benefits, Revising Fiduciary Powers, and Mitigating Trustee Liability

On May 12, 2015, Strafford hosted a webinar on “Trust Decanting: Flexibility and Danger: Achieving Tax Benefits, Revising Fiduciary Powers, and Mitigating Trustee Liability.” Morris Nichols partner Todd A. Flubacher and co-faculty Meryl G. Finkelstein of Norton Rose Fulbright discussed benefits of decanting, common law and state decanting statutes, common pitfalls, and best practice... Continue Reading

Delaware Court of Chancery Issues Significant Opinion on Corporate Creditors; Addresses Fiduciary Duties, Standing, and Measure of Insolvency

In an opinion issued on May 4, 2015, Quadrant Structured Products Co., Ltd. v. Vertin, the Court of Chancery provided important guidance to distressed Delaware corporations and their creditors.  Among other things, the Court (i) summarized directors’ fiduciary duty to creditors, (ii) held that a creditor has standing to bring a derivative suit if the corporation is insolvent at the... Continue Reading