Delaware Court of Chancery

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The Delaware Court of Chancery recently held that, for purposes of responding to a non-party subpoena, documents held by the foreign affiliate of a US corporation were not within the US corporation’s “possession, custody, or control” and therefore were not required to be produced. 

Theravectys SA had a contract with Henogen SA, a Belgium-based manufacturer of biomolecules. Theravectys sued Immune Design Corporation on the theory that Immune Design Corporation induced Henogen to breach its contract with Theravectys and/or that Immune Design Corporation misused Theravectys’s confidential and proprietary information. Theravectys then served non-party Novasep Inc., a Pennsylvania-based corporate affiliate of Henogen, with various discovery requests.
Continue Reading Delaware Chancery Clarifies Discovery Obligations of Domestic Affiliate of Foreign Company

On October 24, the Delaware Court of Chancery dismissed a lawsuit filed by certain minority stockholders of Crimson Exploration, Inc. in In re: Crimson Exploration Inc. Stockholder Litigation, C.A. No. 8541-VCP (Del. Ch. Oct 24, 2014), which challenged a stock-for-stock merger (the “Merger”) of Crimson and Contango Oil & Gas Co. The plaintiffs alleged that a group of affiliated defendants, including Oaktree Capital Management, L.P., constituted controlling stockholders of Crimson that breached their fiduciary duties by selling Crimson below market value for self-serving reasons.
Continue Reading Delaware Court of Chancery Rejects Entire Fairness Review in Absence of Conflicted Transaction

In In re KKR Financial Holdings LLC Shareholder Litigation, C.A. No. 9210 (Del. Ch. Oct. 14, 2014), the Delaware Court of Chancery dismissed a shareholder derivative suit brought by shareholders of KKR Financial Holdings LLC (KFN) alleging, among other claims, a breach of fiduciary duties by each of (1) KKR & Co. L.P. (KKR), as an alleged controlling stockholder, and (2) KFN’s board of directors, in connection with the acquisition by KKR of KFN in a stock-for-stock merger.
Continue Reading Delaware Court of Chancery Rejects Controlling Stockholder Claims and Applies Business Judgment Rule to Merger Suits