MEMORANDUM OPINION MONTGOMERY-REEVES , Vice Chancellor . This case arises from a dispute concerning the proper earnout the purchasers should pay to the sellers under a purchase agreement. The purchasers and sellers entered into a purchase agreement in 2014 that allowed for an earnout payment of up to $100 million based on the first year of performance after the sale. At the end of the first year, they came to different conclusions about the amount of earnout owed to the sellers, and their...
MEMORANDUM OPINION LASTER , V.C. On the eve of trial, nonparty Legrand Home Systems, Inc. ("Legrand") moved to seal certain trial exhibits so that they would not become part of the public trial record. Legrand also sought to close the courtroom for any testimony or attorney argument regarding the exhibits. Legrand claimed this relief was necessary because the exhibits contained sensitive, confidential information and that Legrand would suffer irreparable harm if the information was made...
MEMORANDUM OPINION LASTER , V.C. Plaintiffs ADT Holdings, Inc. and ADT LLC (together, "ADT") have filed a motion in limine seeking a ruling that would preclude defendant Bot Home Automation, Inc. ("Ring") from offering any evidence that "contradicts or seeks to expand the testimony" of Ring's designated Rule 30(b)(6) witness. The motion is denied. Rule 30(b)(6) states: A party may in the party's notice name as the deponent a public or private corporation or a partnership or...
MEMORANDUM OPINION LASTER V.C. Plaintiffs ADT Holdings, Inc. and ADT LLC (together, "ADT") noticed a deposition of defendant Bot Home Automation, Inc. ("Ring") pursuant to Court of Chancery Rule 30(b)(6). Ring designated Dr. Michael Balog as its witness for all of the topics, including Topic 37: "Ring confidential and trade secret information provided to Zonoff that you contend was received, accessed, or reviewed by [ADT]." Balog appeared for deposition, agreed that he was Ring's Rule 30(...
MEMORANDUM OPINION BOUCHARD , C. In this action, stockholders of MeadWestvaco Corporation seek damages relating to a strategic stock-for-stock merger of equals between MeadWestvaco and Rock-Tenn Company that closed in July 2015. The transaction was the product of on-again, off-again negotiations that occurred over a period of about nine months, and yielded a 9.1% premium for MeadWestvaco's stockholders. Eight of the nine MeadWestvaco directors who approved the merger were outside...
MEMORANDUM OPINION GLASSCOCK , Vice Chancellor . The value of a corporation today can be significantly different from its value as of a year or two past, and a stockholder who has sold stock last year can generally not effectively point to a contemporary valuation to complain that the consideration he received was inadequate. That is essentially the gravamen of the Plaintiffs' Complaint here—they sold stock of R. L. Polk and Co., Inc. ("Polk" or the "Company") to the Company in a self-...
MEMORANDUM OPINION MONTGOMERY-REEVES , Vice Chancellor . This case involves two demands to inspect the books and records of a pharmacy benefit management company. The plaintiffs seek numerous books and records to investigate potential mismanagement based on pleadings in other legal actions involving the defendant company and public statements made by the company's management. The defendant company argues that one of the plaintiff's demands is improper and does not meet the form and manner...
MEMORANDUM OPINION GLASSCOCK , Vice Chancellor . The Petitioners here are former stockholders of SWS Group Inc. ("SWS" or the "Company"), a Delaware corporation. They are seeking a statutory appraisal of their shares. The Company was exposed to the market in a sales process. As this Court has noted, most recently in In Re Appraisal of Petsmart, Inc., 1 a public sales process that develops market value is often the best evidence of statutory "fair value" as well. As noted below, however,...
MEMORANDUM OPINION SAM GLASSCOCK, III , Vice Chancellor . In 2015, a pipeline company, Energy Transfer Equity, L.P. ("ETE"), saw an opportunity in the acquisition of another energy entity, The Williams Companies ("Williams"). ETE pursued Williams, obtaining a merger contract. For reasons not pertinent here, a condition precedent to the transaction failed, and what would have been a merger of two large entities came a-cropper. That failure was father to numerous legal actions, of which the...
MEMORANDUM OPINION BOUCHARD , C. This action arises out of the merger of Cyan, Inc. and Ciena Corporation that closed in August 2015. In exchange for their Cyan shares, the former stockholders of Cyan received shares of Ciena common stock and cash that accounted for 89% and 11%, respectively, of an estimated $335 million in merger consideration. Plaintiffs identified a host of alleged disclosure deficiencies in Cyan's proxy statement, but they elected not to seek injunctive relief to...
MEMORANDUM OPINION GLASSCOCK , Vice Chancellor . This matter involves a suit by investors in a partnership. They allege that the general partner, and its principal, falsely induced their entry into the partnership, breached the partnership agreement by denying them access to records and preventing their exit from the entity, and breached contractual and fiduciary duties by making investment decisions based on self-interest, decisions which had a devastating effect on the partnership. The...
MEMORANDUM OPINION BOUCHARD , C. In this action, former stockholders of Paramount Gold and Silver Corporation ("Paramount") sued the members of its board of directors challenging a transaction Paramount entered with Coeur Mining, Inc. ("Coeur") that closed in April 2015. Defendants have moved to dismiss the complaint for failure to state a claim for relief. Before the transaction, Paramount had two mining projects, one in Mexico and the other in Nevada. The transaction involved (1) the...
MEMORANDUM OPINION GLASSCOCK , Vice Chancellor . This unsatisfying Memorandum Opinion addresses cross-motions for partial summary judgment in the context of the issuance of partnership units of a limited partnership, Energy Transfer Equity, L.P. ("ETE" or the "Partnership"). The Memorandum Opinion is unsatisfying because the utility of motions for partial summary judgment lies in clearing away the brush in a litigation, to make traversing the remaining issues straightforward; this...
MEMORANDUM OPINION GLASSCOCK , Vice Chancellor . This brief post-trial Memorandum Opinion addresses a discrete issue of law that appears to be of first impression. Must a plaintiff seeking corporate records under Section 220 of the Delaware General Corporation Law be a stockholder at the time she files her complaint, in order to have standing to pursue the action If a stockholder makes a proper demand under Section 220, and a merger thereafter terminates the stockholder's ownership...
MEMORANDUM OPINION GLASSCOCK , Vice Chancellor . This procedurally awkward and factually prolix Memorandum Opinion reserves outstanding Motions to Dismiss, in favor of consideration of Motions for Partial Summary Judgment, which appeared to offer low-hanging fruit which, if reaped at the outset, might avoid significant litigation effort. The two issues so addressed involve the standard of care in the governing limited liability company agreement, and the effect of a release agreement,...
OPINION LASTER , Vice Chancellor . On June 22, 2015, Preferred Communications Systems, Inc. ("PCSI" or the "Company") held an annual meeting of stockholders. The Preferred Investors Association (the "Association") opposed the reelection of the incumbent members of the Company's board of directors. In advance of the annual meeting, five members of the Association signed a letter that the Association distributed to the Company's investors (the "Fight Letter"). Three of the incumbent...
OPINION BOUCHARD , C. In 2015, Section 115 was added to the Delaware General Corporation Law ("DGCL") codifying this Court's decision in Boilermakers Local 154 Retirement Fund v. Chevron Corp. 1 that Delaware corporations may adopt bylaws requiring that internal corporate claims be filed exclusively in Delaware. Section 109(b) of the DGCL was amended simultaneously to provide that the bylaws of Delaware corporations "may not contain any provision that would impose liability on a...
MEMORANDUM OPINION LASTER , Vice Chancellor . Petitioners Merion Capital L.P. and Merion Capital II L.P. (together, "Merion") brought this statutory appraisal proceeding to determine the fair value of their shares of stock in Lender Processing Services, Inc. ("LPS" or the "Company"). The valuation date is January 2, 2014, when Fidelity National Financial, Inc. ("Fidelity" or "FNF") completed the merger by which it acquired the Company (the "Merger"). This post-trial decision determines...
MEMORANDUM OPINION GLASSCOCK , Vice Chancellor . This matter involves a question of standing to pursue breach of fiduciary duty claims, arising from a complex merger transaction, in the context of a motion to dismiss. The Plaintiff was a preferred stockholder (and member of a purported class of former preferred stockholders) in a Delaware corporation, General Electric Capital Corporation ("GECC"). As that name indicates, the business of GECC was to provide financial services. The common...
MEMORANDUM OPINION LASTER , Vice Chancellor . Chicago Bridge & Iron Company N.V. (the "Seller") sold a subsidiary to an acquisition vehicle controlled by Westinghouse Electric Company LLC (the "Buyer"). The transaction was governed by a purchase agreement dated October 27, 2015 (the "Purchase Agreement" or "PA"). The purchase price consisted of $0 at closing, subject to (i) a post-closing purchase price adjustment and (ii) potential deferred consideration and earnout payments. The...
