Justia Corporate Compliance Opinion Summaries

The parties disputed the amount that defendant, Fitracks, must advance to Noam Danenberg in connection with his defense of claims asserted against him by Aetrix, Fitracks' parent, in litigation pending before the district court (Underlying Action). They also disputed the amount that Fitracks must pay Danenberg as indemnification for this proceeding. Judgment was entered in favor of Danenberg for advancements in the amount of $292,019.91 and indemnification in the amount of $276,332.13. Interest on these amounts, compounded quarterly, shall accrue at the legal rate beginning February 27, 2012 through the date of payment. Going forward, unless modified by stipulation, the parties shall follow the procedures set forth in this opinion.View "Danenberg v. Fitracks, Inc." on Justia Law

Plaintiff filed this action against defendants claiming that defendants breached a limited partnership agreement under which another limited partnership was formed to seek out, acquire, and develop oil and gas producing properties through the use of three-dimensional seismic technology. At issue was whether the Court of Chancery abused its discretion in dismissing plaintiff's amended complaint for failure to prosecute. Plaintiff contended, that notwithstanding more than two years of inactivity, it established good cause for its failure to prosecute - change of counsel and settlement negotiations. The trial court found that plaintiff's showing was insufficient to overcome the long delay and the court found no abuse of discretion. Accordingly, the court affirmed the judgment.View "Solow v. Aspect Resources, LLC, et al." on Justia Law

This action was before the court on a motion to preliminarily enjoin an all-cash negotiated tender offer for all of the shares of a biopharmaceutical company. Plaintiffs, shareholders of the target company, claimed that the offer was for an unfair price and was the result of an unfair and flawed sales process. Plaintiffs also claimed that the solicitation materials recommending the tender offer contained materially false and misleading information. As a result, plaintiffs sought to have the tender offer enjoined before its consummation. The court concluded that plaintiffs have failed to show a reasonable likelihood that they would succeed in proving that the challenged transaction was unfair or that the directors breached their fiduciary duties of care or loyalty, including their disclosure obligations, in approving the transaction. Therefore, the court denied plaintiffs' motion to preliminarily enjoin the tender offer.View "In re Micromet, Inc. Shareholders Litigation" on Justia Law

This case involved Bancorp's agreement to sell BankAtlantic to BB&T. Plaintiffs, institutional trustees, sued to enforce debt covenants that prohibited Bancorp from selling "all or substantially all" of its assets unless the acquirer assumed the debt. The evidence at trial established that Bancorp was selling substantially all of its assets, and BB&T had not agreed to assume the debt. The ensuing event of default would result in the debt accelerating. Bancorp could not pay the accelerated debt. Because this eventuality would inflict irreparable harm on plaintiffs, the court entered contemporaneously an order permanently enjoining Bancorp from consummating the sale.View "In re BankAtlantic Bancorp, Inc. Litigation" on Justia Law

This matter involved a stockholders' suit over the proposed takeover of Delphi by TMH. Based upon the record, the court found that plaintiffs have demonstrated a likelihood of success on the merits at least with respect to the allegations against defendant. However, because the deal represented a large premium over market price, because damages were available as a remedy, and because no other potential purchaser had come forth or seemed likely to come forth to match, let alone best, the TMH offer, the court could not find that the balance of the equities favored an injunction over letting the stockholders exercise their franchise, and allowing plaintiffs to pursue damages. Therefore, the court denied plaintiff's request for a preliminary injunction.View "In re Delphi Financial Group Shareholder Litigation" on Justia Law

Series C-1 preferred shareholders, claiming that the forced conversion of their shares was unlawful, sued Omneon in the Superior Court for breach of contract. Those shareholders, as plaintiffs, claimed that, because the conversion of their preferred shares was integral to Harmonic's acquisition of Omneon, the conversion was part of a "Liquidation Event" under Omneon's certificate of incorporation, that entitled the shareholders to the liquidation "preference" payable for their shares. The Superior Court granted summary judgment in favor of Omneon, holding that under the plain language of Omneon's certificate of incorporation, only one series of preferred stock - the Series A-2.2 - was legally entitled to a liquidation preference payout. The shareholders were not entitled to a liquidation payout because the Series C-1 preferred shares had been validly converted into common stock before the Omneon-Orinda merger took place. The court agreed and concluded that the conversion was not part of a "Liquidation Event" as defined by Omneon's charter. Therefore, the court affirmed the judgment.View "Berkeley VI C.V., et al. v. Omneon, Inc." on Justia Law

Plaintiff brought his Second Amended Complaint asserting various claims against former business associates, including his former fellow members and Board of Managers members of Aeosphere and two companies with which Aeosphere purportedly had business dealings, Flakt Woods and SEMCO. All of plaintiff's claims related to the dissolution of Aeosphere, which he argued was wrongfully undertaken by the other Managers in order to remove him from a cutting-edge and potentially lucrative fragrance business. Plaintiff further asserted that Flakt Woods and SEMCO aided and abetted breaches of fiduciary duty and were otherwise complicit in these wrongful actions. Flakt Woods and SEMCO moved for dismissal. The court concluded that it did not have personal jurisdiction over Flakt Woods or SEMCO, and that, even if it had personal jurisdiction over SEMCO, the Complaint failed to state a claim upon which relief could be granted against SEMCO. Therefore, plaintiff's claims against Flakt Woods and SEMCO were dismissed. Counts II, IV, and V of the Counterclaims were also dismissed for failure to state a claim upon which relief could be granted.View "Matthew v. Laudamiel, et al." on Justia Law

This matter was before the court on defendant's Motion to Stay. After Perfumania announced an agreement to acquire defendant, Shirley Anderson, purportedly a stockholder of defendant, filed an action challenging the acquisition in a Florida state court (Florida Action). Arthur Weill filed a Motion to Intervene in the Florida Action; after that motion was denied, Weill filed a stockholder class action complaint similar to Anderson's and moved to consolidate his case with the Florida Action. Plaintiff filed the instant action. All three actions sought to enjoin the takeover of defendant, on behalf of a stockholder class, based upon similar allegations of inadequate disclosure and breach of fiduciary duty. Defendant sought a stay in favor of the Florida Action under the doctrine explained in McWane Cast Iron Pipe Corp. v. McDowell-Wellman Engineering Co. Discounting, as the court found appropriate, the first-filed nature of the Florida Action, the court found nothing that indicated that this matter should be stayed in deference to the Florida Action. To the contrary, the interest of the the state in the behavior of fiduciaries for its corporate citizens convinced the court that the Motion to Stay must be denied. View "Dias v. Purches, et al." on Justia Law

CIRI filed suit against defendants, shareholders of CIRI, alleging that they had violated the Alaska Native Claims Settlement Act (ANCSA), 43 U.S.C. 1601-1629(h), and Alaska law. On appeal, defendants challenged the district court's holding that it had subject matter jurisdiction over the ANCSA claims. The court held that there was federal jurisdiction under the general federal question jurisdiction statute, 28 U.S.C. 1331, over plaintiff's ANCSA claims because federal law created the cause of action in the claims and because the claims were not frivolous. Accordingly, the court affirmed the judgment of the district court. View "Cook Inlet Region, Inc. v. Rude, et al." on Justia Law

Petitioners sought appraisal of their shares in CKx, under Section 262 of the Delaware General Corporation Law. CKx was acquired by an affiliate of Apollo through a 2011 merger. Fox Broadcasting is not a party to the litigation and was not involved in the merger, but has an agreement with a subsidiary of CKx, 19TV, for the right to broadcast the American Idol television program, which provided substantial revenues to CKx before the merger. Petitioners moved for an order compelling Fox to produce deposition testimony as well as several categories of documents relating to American Idol, Fox’s contracts and contract negotiations with 19TV and FremantleMedia . The chancellor denied the motion except as to the categories of documents and deposition testimony that Fox has agreed to produce. With respect to a request that would require Fox to produce documents relating to Fox’s internal valuation and financial information regarding its negotiations with CKx in connection with an agreement to broadcast American Idol, the court stated that the marginal relevance of the information is outweighed by the potential harm the disclosure of that information would cause Fox and the presence of non-confidential, more probative information already in the record. View "Huff Fund Inv. P'ship v. CKx Inc." on Justia Law