MEMORANDUM OPINION GLASSCOCK , Vice Chancellor . The Plaintiff, Col. Gerald A. Lechliter, lives on a cul-de-sac in Lewes. His property abuts a large parcel of land (the "Lewes Property") set aside as, but never used for, an industrial park. This large parcel was owned by the University of Delaware, and is adjacent to its Lewes campus. It is generally south of Canary Creek, and adjacent to the Great Marsh which lies north of Lewes. In 2002, the University sold the Lewes Property to the...
MEMORANDUM OPINION BOUCHARD , C. In March 2011, two sophisticated investors (the "Walnut Investors") acquired preferred units in PECO Logistics, LLC ("PECO" or the "Company") and became parties to an LLC agreement that afforded them the voluntary right to sell their preferred units back to PECO three years later (the "Put Right"). The LLC agreement provides that, upon exercise of the Put Right, the Company must retain a nationally recognized valuation firm to determine the fair market...
MEMORANDUM OPINION SAM GLASSCOCK III , Vice Chancellor . This case involves the creation and alleged theft of a valuable computer application. According to the complaint, the application was developed primarily by two employees of a tech corporation, incorporated in and headquartered in India. The application was developed by these employees while they were located in India. The alleged act of theft—removing the source code that embodies the application—occurred in India. After the...
MEMORANDUM OPINION LASTER , Vice Chancellor . Non-party Timothy Burns formed ESG Capital Partners II, LP (the "Partnership") for a limited purpose. After raising money from investors, the Partnership would purchase shares of stock of Facebook, Inc. before that company's then-anticipated initial public offering. Preferably once Facebook had completed a successful IPO, the Partnership would distribute to its investors either the Facebook shares themselves or their cash value. After that, the...
MEMORANDUM OPINION LASTER , Vice Chancellor . Non-party Foresight Energy, L.P. ("Foresight Parent" or the "Partnership") is the ultimate parent of a family of companies that operate in the coal industry. Foresight Parent raised debt financing by causing two of its subsidiaries to issue senior notes (the "Notes") pursuant to an indenture dated August 23, 2013 (the "Indenture"). Repayment of principal is due in 2021, but if there has been a contractually defined "Change of Control," then the...
OPINION LASTER , Vice Chancellor . In November 2010, El Paso Corporation ("El Paso Parent") sold member interests in three limited liability companies to El Paso Pipeline Partners, L.P. (the "Partnership" or "El Paso MLP"). At the time of the sale, El Paso Parent controlled El Paso MLP through its ownership of El Paso Pipeline GP Company, L.L.C., the sole general partner of El Paso MLP (the "General Partner" or "El Paso GP"). On April 20, 2015, this court issued a post-trial decision which...
MEMORANDUM OPINION GLASSCOCK , Vice Chancellor . The Plaintiff here, Colonel Gerald A. Lechliter, is a resident of Lewes. His home is situated on a quiet cul-de-sac, and his property abuts a parcel of land once part of a planned, but never used, industrial park owned by the University of Delaware. The land was acquired from the University by the State Department of Natural Resources and Environmental Control ("DNREC"), and the portion nearest the Lechliter property was leased by DNREC to...
OPINION LASTER , Vice Chancellor . This case arises out of the sale of a portfolio company by one private equity firm to another. The portfolio company was Double E Parent LLC ("Double E" or the "Company"). The principal sellers were Prairie Capital, III, L.P. and Prairie Capital III QP, L.P. (the "Prairie Funds"), which were private equity funds sponsored by Prairie Capital Partners ("Prairie Capital"). The purchaser was Double E Holding Corp. (the "Buyer"), which was an acquisition...
MEMORANDUM OPINION GLASSCOCK , Vice Chancellor . A stockholder, mislead into forgoing appraisal rights, may have a breach of duty claim against directors or officers that can be satisfied by quasi-appraisal damages. If the facts regarding the breach of duty are known to the stockholder at the time of closing, may she wait 27 months before pursuing the claim, or would the cause of action then be barred by laches The answer, of course, depends upon the specific facts of the matter. This...
MEMORANDUM OPINION LASTER , Vice Chancellor . Plaintiff Finger Lakes Capital Partners, LLC ("Finger Lakes") is a small and struggling asset management firm. Over the course of a decade, Finger Lakes sponsored investments in five portfolio companies. Each time, Finger Lakes formed a different Delaware limited liability company as a special purpose vehicle for the investment. Non-party Lyrical Partners, L.P. ("Lyrical") is a large and successful asset management firm. Lyrical acted as...
MEMORANDUM OPINION GLASSCOCK , Vice Chancellor . This case presents what has become a common scenario in this Court: a robust marketing effort for a corporate entity results in an arm's length sale where the stockholders are cashed out, which sale is recommended by an independent board of directors and adopted by a substantial majority of the stockholders themselves. On the heels of the sale, dissenters (here, actually, arbitrageurs who bought, not into an ongoing concern, but instead into...
MEMORANDUM OPINION LASTER , Vice Chancellor . Defendant Athilon Capital Corporation ("Athilon" or the "Company") became insolvent under the balance sheet test during the financial crisis of 2008. The Company remained insolvent for some time. At least by summer 2014, however, Athilon had returned to solvency. During the intervening period of insolvency, defendant Merced Capital, L.P. and its affiliates (together, "Merced") acquired 100% of Athilon's equity. Merced is an investment manager...
MEMORANDUM OPINION BOUCHARD , C. This decision is round two of an action in which a stockholder of TIBCO Software Inc. challenges the per-share consideration that a private equity fund ("Vista") agreed to pay to acquire TIBCO in a merger that closed on December 5, 2014. The merger agreement provided for stockholders to receive $24 per share. Based on the number of fully diluted shares of TIBCO outstanding, which was accurately reflected in the merger agreement, a $24 per share price...
OPINION LASTER , Vice Chancellor . On February 24, 2015, Red Clay Consolidated School District ("Red Clay") sought approval from voters to increase the school-related property taxes paid by owners of non-exempt real estate located within the school district. The referendum passed with 6,395 residents voting in favor and 5,515 against. The plaintiffs are residents of Red Clay who opposed the tax increase but did not vote because they were unable to access the polls. They contend that to...
MEMORANDUM OPINION LASTER , Vice Chancellor . On February 24, 2015, residents of the Red Clay Consolidated School District ("Red Clay") approved a referendum to increase the school-related property taxes paid by owners of non-exempt real estate located in the district. Despite complaints that Red Clay personnel violated the election laws, the Board of Elections for New Castle County (the "Board of Elections") certified the results. The Board of Elections determined that it did not have...
MEMORANDUM OPINION BOUCHARD , C. This action involves claims for advancement and contribution for legal fees and expenses relating to a federal lawsuit in which Dr. Eitan Konstantino was sued for usurping a corporate opportunity of AngioScore, Inc. when he created a balloon catheter device (known as the Chocolate device) for the benefit of a competitor he had formed (TriReme Medical, Inc.) while serving as a director of AngioScore. In May 2014, Konstantino filed this action seeking...
MEMORANDUM OPINION GLASSCOCK , Vice Chancellor . As a bench judge in a court of equity, much of what I do involves problems of, in a general sense, agency: insuring that those acting for the benefit of others perform with fidelity, rather than doing what comes naturally to men and women— pursuing their own interests, sometimes in ways that conflict with the interests of their principals. In this task, I am generally aided by advocates in an adversarial system, each representing the...
MEMORANDUM OPINION BOUCHARD , C. Plaintiff Dov Charney is the founder and former Chairman and Chief Executive Officer of American Apparel, Inc. (the "Company"). In June 2014, he was suspended from his CEO position. In July 2014, he entered a Nomination, Standstill and Support Agreement (the "Standstill Agreement") and resigned as a director of the Company. In December 2014, Charney was formally terminated as CEO for cause. In May 2015, the Company sued Charney in this Court (C.A. No....
MEMORANDUM OPINION NOBLE , Vice Chancellor . Petitioners CertiSign Holding, Inc. ("CertiSign" or the "Company") and Nicola Jose Rogerio Cosentino ("Cosentino," and with CertiSign, "Petitioners") brought this action pursuant to Section 205 of the Delaware General Corporation Law (the "DGCL") seeking an order (i) declaring that shares of putative stock of the Company are shares of valid stock and (ii) approving a corresponding stock ledger. They have moved for entry of a final order granting...
MEMORANDUM OPINION LASTER , Vice Chancellor . The defendants have moved to dismiss the Verified Second Consolidated Amended Class Action Complaint (the "Complaint") for failing to state a viable claim. See Ct. Ch. R. 12(b)(6). When considering such a motion, (i) all well-pleaded factual allegations are accepted as true; (ii) even vague allegations are well-pleaded if they give the opposing party notice of the claim; (iii) the Court must draw all reasonable inferences in favor of the non-...
