MEMORANDUM OPINION GLASSCOCK, Vice Chancellor. Litigation in multiple jurisdictions in consideration of a single issue can result in gross inefficiency, and risks inconsistent judgments. This Court has the power to enjoin litigants before it from litigating in other jurisdictions, where justice and equity so require. Exercise of this power involves often-vexing problems of comity, efficiency, and fairness. Anti-suit injunctions should be entered sparingly, and only where it is clear that...
MEMORANDUM OPINION LASTER, Vice Chancellor. The plaintiffs allege that defendant Kohlberg Kravis Roberts & Co. L.P. ("KKR") traded on inside information when purchasing shares of preferred stock of Primedia, Inc. ("Primedia" or the "Company"). The plaintiffs originally asserted derivative claims against Primedia's board of directors and KKR (the "Derivative Claims"). While the Derivative Claims were pending, TPG Capital, L.P. ("TPG") acquired Primedia through a reverse triangular merger (the "...
MEMORANDUM OPINION GLASSCOCK, Vice Chancellor. The power to tax involves, as Chief Justice Marshall famously observed, the power to destroy. 1 Relying on such concerns, the Plaintiffs here—business owners in Dewey Beach—insist that a general grant of authority to a town from the State, no matter how broad or explicit, is insufficient to convey a power to tax. However, while grants of taxing authority must be strictly construed, nothing prevents the General Assembly from delegating taxing...
MEMORANDUM OPINION LASTER, Vice Chancellor. The plaintiffs in this class action assert that the members of the board of directors (the "Board") of Rural/Metro Corporation ("Rural/Metro" or the "Company") breached their fiduciary duties when selling the Company to a private equity firm. The plaintiffs contend that RBC Capital Markets, LLC ("RBC") and Moelis & Company LLC ("Moelis"), who served as financial advisors to the Company, aided and abetted the Board members' breaches of fiduciary...
MEMORANDUM OPINION GLASSCOCK, Vice Chancellor. Delaware law with regard to limited liability companies is contractarian; individuals may create an organization that reflects their perception of the appropriate relationships among the parties, most conducive to their interests, as represented by their mutual agreement. Chapter 18 of Title 6 of the Delaware Code provides default provisions applicable to Delaware LLCs where the parties' agreement is silent; where they have provided otherwise,...
MEMORANDUM OPINION GLASSCOCK, Vice Chancellor. In enacting the statute of limitations applicable to contracts, 1 the General Assembly has determined that justice requires that actions sounding in contract be brought, if at all, within three years of accrual. This determination necessarily represents a balancing of the interests of justice, which include seeing parties to contracts made whole for their breach, as well as preventing allegedly-breaching parties from being unfairly made to...
MEMORANDUM OPINION GLASSCOCK, Vice Chancellor. This matter involves the allegation that two of the individual Defendants— guarantors of a loan made by the Plaintiff bank, and in anticipation of the inevitable default on that loan—created Delaware entities, as part of a scheme to fraudulently transfer their assets beyond the reach of the bank, and that they effectuated those transfers with the help of the third individual Defendant, who they enlisted as a fiduciary of the entities and...
MEMORANDUM OPINION LASTER, Vice Chancellor. This court's post-trial memorandum opinion held that the doctrines of laches and acquiescence barred plaintiff Eldon Klaassen from challenging his removal as CEO of Allegro Development Corporation ("Allegro" or the "Company"). Klaassen v. Allegro Dev. Corp., 2013 WL 5739680 (Del. Ch. Oct. 11, 2013) (the "Opinion"). As a predicate to this holding, the Opinion reasoned that because Klaassen challenged his removal on equitable grounds, the...
MEMORANDUM OPINION GLASSCOCK, Vice Chancellor. I. BACKGROUND The parties in this matter are embroiled in a contractual dispute. On August 20, 2013, Al Jazeera America, LLC ("Al Jazeera") filed a Verified Complaint (the "Complaint") alleging that AT&T Services, Inc. ("AT&T") wrongfully terminated and breached an Affiliation Agreement between the parties. Despite the parties' decision to litigate in a public court, rather than pursue private dispute resolution, the parties redacted, pursuant...
MEMORANDUM OPINION GLASSCOCK, Vice Chancellor. Where a complaint seeking to enjoin a merger on grounds of breach of duty by the company's directors is insufficient to support a motion to expedite, the chances of the same allegations surviving a motion to dismiss are vanishingly small. 1 Those chances are smaller still where the motion to dismiss comes after the merger has closed, the duty of care claims have fallen away with the request for injunctive relief, only damages are sought, and the...
MEMORANDUM OPINION LASTER, Vice Chancellor. Plaintiff Eldon Klaassen brought this action pursuant to Section 225 of the Delaware General Corporation Law (the "DGCL") to obtain a determination that he remains CEO of Allegro Development Corporation ("Allegro" or the "Company"). He further contends that as the holder of virtually all of the Company's common stock, representing a majority of Allegro's outstanding voting power, he acted by written consent to remove two incumbent directors, fill...
MEMORANDUM OPINION GLASSCOCK, Vice Chancellor. The Plaintiff brings the action before me under 8 Del. C. 225. He seeks to confirm the removal of members of the board of CardioVascular BioTherapeutics, Inc. ("Cardio") by written stockholder consent, supposedly effective as of June 7, 2013. 1 The Defendants, directors purportedly displaced by the written stockholder consent (the "Consent Action"), challenge the validity of the consents (the "Vizier Consents") filed on behalf of shares held...
OPINION GLASSCOCK, Vice Chancellor. This matter is the first case to turn on the sole application of 8 Del. C. 223(c). That statute allows stockholders in certain limited circumstances to petition—but not compel—this Court to direct that a special stockholder's meeting take place to fill vacancies on the corporate board through exercise of the stockholders' franchise, rather than through appointment by the remaining directors. The Plaintiffs here fulfill the statutory requirements for...
MASTER'S REPORT (Motion to Compel) ABIGAIL M. LeGROW, Master. This report is the second of two privilege rulings I have made in this relatively short-lived case in which the beneficiaries of a trust contend that the former corporate trustee breached its duties by, among other things, improperly treating the trust as a directed trust and thereby acceding to what turned out to be patently unsuccessful investment decisions made by the individual trustee. By my count, the parties collectively...
MEMORANDUM OPINION LASTER, Vice Chancellor. The plaintiffs are special purpose entities affiliated with ASB Capital Management LLC (together, "ASB"). The defendants are special purpose entities affiliated with The Scion Group LLC (together, "Scion"). ASB and Scion engaged in extensive litigation over three joint venture agreements. ASB prevailed, and in a post-trial opinion, this court reformed the joint venture agreements as ASB requested. ASB Allegiance Real Estate Fund v. Scion...
OPINION LASTER, Vice Chancellor. Trusts that own fifty percent of the common stock of nominal defendant Information Management Services, Inc. ("IMS" or the "Company") allege that two of the Company's three most senior officers mismanaged the Company in breach of their fiduciary duties. The executives consulted with their personal lawyers and advisors about the alleged mismanagement using their work email accounts. IMS gathered the emails but took no position on whether they should be produced....
OPINION LASTER, Vice Chancellor. TRADOS Inc. ("Trados" or the "Company") obtained venture capital in 2000 to support a growth strategy that could lead to an initial public offering. The VC firms received preferred stock and placed representatives on the Trados board of directors (the "Board"). Afterwards, Trados increased revenue year-over-year but failed to satisfy its VC backers. In 2004, the VC directors began looking to exit. As part of that process, the Board adopted a management...
MASTER'S REPORT (Motion to Compel and Motion to Intervene) LEGROW, Master. INTRODUCTION Before me are two motions filed in this case in which the beneficiaries of a trust allege that the trustees have violated their fiduciary duties and engaged in a host of breaches of trust. The first motion seeks to compel the production of documents (the "Motion to Compel"), and was brought by the plaintiffs, Kathryn Mennen, Sarah Mennen, John Mennen, Shawn Mennen, and Nancy Mennen as natural guardian for...
MEMORANDUM OPINION GLASSCOCK, Vice Chancellor. This matter illustrates the lengths to which malign family relationships and mulish obstinacy, facilitated by the failure of parties to a land sale to record title with the Sussex County Recorder of Deeds, can carry litigants in this Court. Before me are cross motions for summary judgment in this action for quiet title. For the reasons that follow, the Petitioners' motion is granted and the Respondent's motion is denied. This action is the...
MEMORANDUM OPINION LASTER, Vice Chancellor. The plaintiffs contend that the defendants made factual representations in a written agreement for the sale of a business that turned out to be wrong. They sued for fraud and breach of contract. At trial, the plaintiffs proved that the defendants knew their representations were false, but the plaintiffs failed to prove reliance and therefore could not establish fraud. Judgment consequently is entered in favor of defendants on Counts I, II, III, and...
