What happens when you buy somebody else’s problems? A new policy from the U.S. Department of Justice (DOJ) is encouraging companies to disclose the misconduct of the companies they buy. The DOJ says it won’t prosecute businesses that voluntarily report wrongdoing found during the mergers and acquisitions process.

The post Buyer Beware: What to Know

In a recent decision by Vice Chancellor Glasscock of the Delaware Court of Chancery, Handler v. Centerview Partners Holdings, L.P., the Vice Chancellor considered whether a partnership agreement existed based on a purported oral agreement. The Court of Chancery’s decision provides useful guidance to practitioners and reaffirms that, while Delaware law permits oral agreements, including

In a recent case, Palkon v. Maffei (TripAdvisor), the Delaware Supreme Court accepted an interlocutory appeal of the Court of Chancery’s denial of shareholders’ motion to dismiss. Such appeals are not common: Delaware Supreme Court Rule 42(b) expressly provides that “[i]nterlocutory appeals should be exceptional, not routine, because they disrupt the normal procession of litigation,

In M&A transaction agreements, contracting parties frequently negotiate a mechanism to make post-closing adjustments to the purchase price — for example, based on calculations of the target company’s working capital at the time of closing or an “earnout” based on the performance of the company for a specified period after closing. Because parties often disagree

In Harrison Metal Capital, an investment fund with an 18% stake in a privately held company called MixMax, Inc. believed the CEO was committing financial improprieties, but found no legal recourse for its complaint.  Although certain features of the case are unusual as a factual matter, the Court of Chancery’s analysis of demand futility

The Delaware Court of Chancery is one of limited jurisdiction, accessible only when complete relief at law is unavailable. On March 4, 2024, in Graciano v Adobe Healthcare, Inc., Vice Chancellor Glasscock continued a trend from other recent cases toward guarding the limits of the Court of Chancery’s equitable jurisdiction, when he concluded that a

A new federal court decision, Madsen v. Sidwell Air Freight1,  addresses the scope of general personal jurisdiction over corporations after the Supreme Court’s 2023 decision in Mallory v. Norfolk Southern Railway2.  Madsen suggests that many states’ laws stop short of asserting the kind of registration-based jurisdiction that Mallory approved. This decision highlights key arguments that in-house litigators should bear in mind

Securities class actions against life sciences companies are mostly second-order problems. The first-order problem is a business or regulatory setback that, when disclosed by the company or a third party, triggers a stock price decline. Following the decline, plaintiffs’ class-action attorneys search the company’s previous public statements and seek to identify inconsistencies between past positive

Following amendments in August 2022 to Section 102(b)(7) of the Delaware General Corporate Law (“DGCL”) to allow corporations to include provisions in their respective charters exculpating officers for breaches of the duty of care, a number of corporations naturally took steps to add such provisions.  Stockholder challenges followed in In re Fox Corp./Snap Section 242

On March 27, 2024, Chancellor McCormick granted the Carvana Special Litigation Committee’s motion to dismiss after finding no wrongdoing by the Company’s controlling stockholders in connection with it March 2020 direct offering and the controlling stockholders’ subsequent sale of Company stock for over US$1 billion. See https://courts.delaware.gov/Opinions/Download.aspx?id=362010.

The post Carvana SLC Drives Away Derivative