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Stephen D. Dargitz

Posts by Stephen D. Dargitz

Delaware Court of Chancery Ends Massey Stockholder Litigation Saga and Dismisses Claims

Posted in Corporate Litigation, Delaware Courts, Litigation Trends

Under Delaware law, when a derivative plaintiff loses its stockholder status as the result of a merger, the plaintiff usually also loses its standing to pursue a derivative suit on behalf of the corporation.  This rule is subject to only two limited exceptions: (1) when “the merger itself is the subject of a claim of… Continue Reading

The Delaware LLC is Not a Corporation and Should Be Subject to a Different Veil Piercing Analysis

Posted in Corporate Litigation, Delaware Courts, Litigation Trends

“Veil piercing” is an equitable remedy that allows a plaintiff with a claim against an entity to obtain relief from the entity’s owners, in spite of laws providing for limited liability.  When the owners provide personal guarantees or otherwise contract around liability protections, or when the owners are sued in their own right based on… Continue Reading

Delaware Supreme Court Provides New Guidance on Derivative Suits: Private Planes and Venture Capital Investments May Raise Doubts at Pleading Stage

Posted in Corporate Litigation

The Delaware Supreme Court reversed the dismissal of a derivative suit for failure to make demand, finding that the complaint alleged particularized facts sufficient to create a reasonable doubt as to the disinterestedness and independence of a majority of directors, in Sandys v. Pincus, No. 157, 2016 (Del. Dec. 5, 2016).  In Sandys, the plaintiff… Continue Reading

Supreme Court Resolves Circuit Split On Insider Trading, Partially Overruling Newman

Posted in Corporate Litigation

For the first time since 1997, the United States Supreme Court explored the requirements for proving a federal securities fraud claim based on insider trading, in Salman v. United States (Dec. 6, 2016).  The Salman opinion confirms that a factfinder may infer a personal benefit to a tipper from a gift of confidential information to… Continue Reading

Delaware Supreme Court Repudiates LLC’s Fraudulent Inducement Defense in Summary Advancement Proceeding

Posted in Delaware Courts, Employment Litigation, Litigation Trends, Uncategorized

The Delaware Supreme Court recently held that the plain language of an employment agreement and an LLC agreement prevented an LLC from interjecting a fraudulent inducement defense into a summary proceeding for the advancement of litigation expenses under Section 18-108 of the Delaware LLC Act. Trascent Mgmt. Consulting, LLC v. Bouri, No. 126, 2016 (Del…. Continue Reading