Articles

Of Spoiled Milk—Warnings That Should and Should Not Have Been Issued: Another Take on the Potential for Management and Controlling Shareholder Liability Related to an Insolvent Company’s WARN Act Violations

For the better part of three decades, an apocryphal tale has circulated on the Internet about a man who leaps from a terminal height off a building only to be mortally wounded by a shotgun blast as he hurtles past an open window on the way down.  This dark fable then asks whether the medical examiner should conclude that the death of this man, who was imminently going to perish by his own hand,... Continue Reading

Delaware Courts Affirm Guidance for Directors in Distressed Situations

The Delaware Supreme Court and the Court of Chancery recently issued guidance for directors navigating the complex fiduciary issues that arise around insolvency. That guidance, outlined in a series of decisions in Quadrant Structured Products Co., Ltd. v. Vertin, should give directors a measure of comfort in understanding the who, what, when, and how of fulfilling fiduciary duties in these... Continue Reading

Practical Considerations for Single-Bidder Processes in Public M&A

Whether a public company should engage in a “single-bidder” process is one of the most difficult questions a target public company’s board of directors must consider during the early stages of a transaction. In the right circumstances, a single-bidder process can result in an expedient transaction that maximizes stockholder value while minimizing the risks associated with putting a... Continue Reading

Limits on Informational Rights of Directors with Interests Adverse to the Company

In three orders issued on the same day, Vice Chancellor Travis Laster of the Delaware Court of Chancery addressed an exception to directors’ virtually unfettered informational rights.  In a discovery dispute in In re Oxbow Carbon LLC Unitholder Litigation, Oxbow Carbon LLC (Oxbow Carbon or the Company) asserted attorney-client privilege against four current and former Oxbow Carbon directors... Continue Reading

Independence Issues in the Entrepreneurial Ecosystem

The Delaware Supreme Court decision in Sandys v. Pincus, 2016 WL 7094027, at *1 (Del. Dec. 5, 2016) (Zynga) has raised questions regarding well-established legal precedent and business practices that are recognized as common in the venture capi­tal and entrepreneurial communities. Al­though Zynga and other decisions regarding director independence reveal the Delaware judiciary’s focus on... Continue Reading

Build It And They Will Come: Why Delaware Trusts Lead The League

The article, “Build It And They Will Come: Why Delaware Trusts Lead The League,” was published in the Spring, 2017 issue of the Delaware Banker Journal. It describes the history of the Delaware trust industry and how the robust trust infrastructure and commitment of the State and the industry have made Delaware the preeminent trust jurisdiction in the world... Continue Reading

Testing Management Valuation When Something Doesn’t Smell Right

This article examines equity committee formation and methods used by bankruptcy courts to limit the costs of appointing an additional statutory committee, and it queries whether the appointment of equity committees in these cases resulted in increased returns for equity holders. It explores this question through an examination of two bankruptcies in which equity committees were appointed: In re... Continue Reading

Third Circuit Departs from Momentive and Enforces Make-Whole Provisions in EFH

On November 17, 2016, the Third Circuit Court of Appeals held in Delaware Trust Co. v. Energy Future Intermediate Holding Co. LLC (In re Energy Future Holdings Corp.) (EFH), 842 F.3d 247 (3d Cir. 2016), that the debtors, Energy Future Intermediate Holding Company LLC and EFIH Finance Inc. (collectively, EFIH), were obligated to pay make-whole premiums despite the acceleration of the underlying... Continue Reading

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