M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Wednesday, January 22, 2014

DE arbitration seeks SCOTUS review

So, last night Delaware filed a cert petition with the US Supreme Court asking the court to overturn the Third Circuit's ruling with respect to Delaware Chancery arbitration program.  I've written about this before (here and even a law review article here).  In any event, I'm on record that I believe Chancery arbitration is a bad idea that over the long-term will undermine Delaware's corporate law franchise. In any event, when challenged at the District Court, that court found that confidential Chancery arbitration violated the First Amendment's qualified right of access (District Court Opinion).  In a 2-1 opinion on appeal, a panel of the Third Circuit agreed with the District Court (Third Circuit Opinion).  In that opinion, the majority appears to have read my law review piece - no need to cite me, I'm not proud.  In any event, the majority mimics many of the same arguments that I previously argued about the relative merits of the Chancery arbitration program.  

Now, Delaware would like the Supreme Court to weigh in. Here's the petition for certiorari (h/t KWC and The Chancery Daily).

Petitioners make a couple of policy arguments for why it's important why the Chancery arbitration procedure must survive.  It's a matter of national competitiveness, otherwise parties will incorporate overseas and take their disputes overseas, too.  That's a pretty dubious argument.  There is no evidence that any Delaware firm.  I looked at a pile of merger agreements to check to see if there was anything to this argument.  Prior to adoption of the Chancery arbitration procedure, only a handful of mergers relied on anything other than the public courts to resolve disputes between the parties.  There is no evidence that anyone contracted to resolve merger related disputes through international arbitration.  It's just not an issue.  There is no real competitive challenge to the position of the courts with respect to merger litigation at this point.  In rushing to adopt the Chancery arbitration procedure, Delaware is fighting with ghosts.

The second argument for why preservation of the Chancery arbitration procedure is so important is a familiar argument about how the US courts are so inefficient that delayed justice will push parties to seek international arbitration rather than dispute resolution in the US.  Gee, I guess, maybe, but are the Delaware courts arguing that the Delaware courts are so inefficient that the inefficiency of the Delaware courts is pushing Delaware corporations overseas?  Really. Please.  No.  

A third argument -- and this one is tied to the question of confidentiality of arbitration procedure - is that if the court were to uphold the qualified First Amendment right of access the procedure would fall into disuse and that confidentiality is central to the success of the procedure.  Confidentiality is the only real benefit to arbitration?  

Well, honestly, I don't understand how that ties into the argument that the reason why parties are supposedly leaving Delaware is because of the inefficiency of the public courts.  Frankly, it doesn't.  It shifts the goal posts and makes confidentiality the central contribution of the arbitration procedure.  To that I say hogwash. 

OK, if the public courts had proven themselves incapable of protecting trade secrets and other commercially sensitive information, I might listen.  But, under the Chancery Court' s rule 5.1, parties can seek confidential treatment for sensitive materials.   Does Delaware think that its own rules for confidential treatment are inadequate?  I don't think so.   Anyway, to the extent arbitral confidentiality extend beyond areas that 5.1 typically will protect, then why does anyone in a policy position believe that keeping those kinds of facts (possibly management breeches of fiduciary duties or other bad acts by managers) from the public?  I strain to see a policy rationale.

In any event, Delaware might get a day in court on this.  I'd be surprised if they do - though as someone recently reminded me if the court wants to make a statement about arbitration (again), this might be a case they will take.

I'll rehash the actual legal arguments in another post later if the case gets picked  up.

-bjmq

January 22, 2014 in Delaware | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 15, 2014

Next up ... filling the Chancery vacancy

The Delaware Law Weekly has surveyed the field of potential replacements for Chancellor Strine once he moves up to the Supreme Court and comes up with four names:

Andre G. Bouchard, a partner with Bouchard Margules & Friedlander and current chairman of the Judicial Nominating Commission, is viewed as a front-runner to replace Strine. Others who have been mentioned as possible candidates include Superior Court Judge Jan R. Jurden, Chancery Court Vice Chancellor J. Travis Laster and Joseph R. Slights III, a former Superior Court judge and current Morris James partner.

Two things worth noting: First, Andre Bouchard is an Eagle (BC, '83) - so, that's good.  Second, if Vice Chancellor Laster were to slide over to the Chancellor's seat, his position of Vice Chancellor would also have to be filled by someone so the nomination merry-go-round would continue for a few more months.  The same rules with respect to non-partisan appointment of judges applies to the Chancery Court as applies to the Supreme Court.

-bjmq

 

January 15, 2014 in Delaware | Permalink | Comments (0) | TrackBack (0)

Monday, January 13, 2014

Delaware columnist weighs in on Strine

A columnist at the News Journal/DelawareOnline weighs in on the Strine nomination:

Gov. Markell has certainly chosen someone whose national reputation gives new cachet to the court. Leo Strine, at age 49, should be able to tackle any challenge his Supreme Court is bound to face.

-bjmq

January 13, 2014 in Delaware | Permalink | Comments (0) | TrackBack (0)

Friday, January 10, 2014

More reactions to Strine nomination

The Delaware Grapevine pumps the brakes a bit:

As conventional a choice as Strine seems, his elevation would still be something of an act of faith, because he does not come with the standard judicious temperament. Instead, he is a grandiose and contradictory figure, as brilliant and comic as he can be defensive and browbeating.

When Strine went on the bench as a vice chancellor in 1998, he described himself as a "mad wizard," and it is never certain which Strine will show up, either the judicial wizard or the madman.

-bjmq

January 10, 2014 in Delaware | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 8, 2014

Strine "interview" with Reuters

Chancellor Strine gave an "interview" (sort of) to Reuters after the announcement of his nomination to the Delaware Supreme Court.  It's full of true Strine classics, some of the highlights:

Reuters: Do you think that once you join the Supreme Court you’ll change the views you held on the Court of Chancery?

Strine: An absurd scenario, at best fit for a discussion by a Red Bull-fueled group of nerdy second-year law school corporate law junkies, who find themselves dateless (big surprise) on yet another Saturday night.

My guess is that we will have less of this on the Supreme Court than we had at the Chancery Court - the opportunities for judges to riff from the bench are more limited -  so enjoy it while you can.

-bjmq

January 8, 2014 in Delaware | Permalink | Comments (0) | TrackBack (0)

WSJ says it's Strine

WSJ is reporting right now that Strine will get the nod to replace Steele as Delaware's next Chief Justice.  The report is here.

-bjmq

Update:  And here is the official announcement from the Governor's Office.

January 8, 2014 in Delaware | Permalink | Comments (0) | TrackBack (0)

Thursday, December 19, 2013

MFW Appeal Heard in Delaware

I took advantage of the brief time between exams and the holidays to hop down to Delaware to sit in on the appellate arguments in MFW Shareholder Litigation.  You'll remember that in MFW Chancellor Strine was presented with a question - in a controlling shareholder transaction which is conditioned on both negotiation and approval by an independent, special committee and a fully-informed, uncoerced vote of the majority of the minority what is the proper standard of review.  Chancellor Strine held that the proper strandard of review for a transaction in which the controller essentially disables itself is business judgment.  

[If you don't need any of this background and just want a quick summary of the argument, feel free to skip down.]

Since Weinberger, entire fairness has been the standard for transactions involving controlling shareholders.  In Kahn v Lynch, the Supreme Court provided a gloss on Weinberger's entire fairness standard for controlling shareholder transaction.  Where the controller does the transaction in reliance  on either a special committee or a vote of the majority of the minority, the burden shifts from the controller to plaintiff to prove that the transaction was not entirely fair.   But, as Chancellor Strine noted in Cox Communications, the decision by the Supreme Court to keep the entire fairness standard in play made it impossible to get even weak complaints dismissed at an early stage.   In no small part, Kahn v Lynch was a contributor to the 'litigation industrial complex' - generating almost guaranteed valuable settlement opportunities at the mere announcement of a controlling shareholder transaction no matter how valuable the underlying transaction for minority shareholders.

In MFW, Chancellor Strine had an opportunity to directly address the question of the proper standard of review in a controlling shareholder transaction where the controller conditioned the deal on robust procedural protections that essentially disabled the controller.  The question for the corut was whether additional protections should give the board any credit - perhaps even sufficient credit to get weak claims dismissed early.  Chancellor Strine put the 'credit' problem this way: 

Uncertainty about the answer to a question that had not been put to our Supreme Court thus left controllers with an incentive system all of us who were adolescents (or are now parents or grandparents of adolescents) can understand. Assume you have a teenager with math and English assignments due Monday morning. If you tell the teenager that she can go to the movies Saturday night if she completes her math or English homework Saturday morning, she is unlikely to do both assignments Saturday morning. She is likely to do only that which is necessary to get to go to the movies—i.e., complete one of the assignments—leaving her parents and siblings to endure her stressful last-minute scramble to finish the other Sunday night.

Plaintiffs in MFW improvidently decided not to settle, rather seeking the option of going for post-closing damages.  Their mistake.  That gave Chancellor Strine the opportunity to address the question that eluded him in Cox.  In MFW, Chancellor Strine announced that where a transaction with a controller is conditioned on both negotiation and approval by an independent, special committee and a fully-informed, uncoerced vote of the majority of the minority that business judgment is the proper standard of review.  

[Appeal before Delaware Supreme Court]

OK.  So that brings us to today in Dover where the Supreme Court met en banc to hear the plaintiff's appeal.   I went down to watch the arguments and seem the wheels of corporate justice turn.  Justice Holland sat as acting chief.  Judge Jan Jurden sat by designation (Someone trying her out? Just sayin'...).

Justice Holland noted for the plaintiffs benefit that the court decided to hear the case en banc because, well, maybe the court wanted to write a new rule... Was that big enough of a hint that the court is looking to make some new law here?  Justice Jacobs made the issue more explicit for the plaintiffs - forget about the particular facts of this case, what is the policy reason why the Supreme Court should accept or reject the Chancellor's reasoning.

Unfortunately, the plaintiffs weren't really up to the task of articulating a good reason why the procedural protections in MFW aren't robust enough to generate the business judgment presumption for a special committee.  Plaintiffs asserted that special committees are structurally biased in favor of controllers in almost all circumstances.  OK, so I am generally pretty cynical, but I still believe in the court's presumptions.  Near as I can tell, special committees still get the presumption of independence until plaintiffs present facts that they aren't. Plaintiffs, it seemed, wanted the court to toss the presumption of independence of special committees altoghether in controlling shareholder transactions.  Why? Not sure exactly why.   But, if you are proposing to the court that directors shouldn't have the presumption of independence, then one really should have a strong articulated reason why.  In any event, it didn't seem like the court was entertaining that notion.  

Rather, the court quickly turned to the power of the fully-informed, uncoerced vote of a majority of the minority.  Why isn't that powerful enough - together with the special committee - to get the business judgment presumption Justice Jacobs wondered?  Well, well, because arbs! Oh, wait.  Aren't arbs stockholders?  Yes, but they just want to make money.  So, shareholder votes shouldn't get credit?   Again...the plaintiffs failed to clearly articulate a policy reason why a fully-informed, uncoerced vote of the majority of the minority isn't going to work.     In general the plaintiffs struggled to provide the court with any reasons to overturn Chancellor Strine's reasoning.

When counsel for the special committee got their chance, they did a much better job of articulating reasons to uphold Chancellor Strine ruling.  Justice Berger asked whether with the procedural safeguards the result  of the special committee/majority of minority process was equivalent to an arm's length deal?  No, was the response, but for the purposes of judicial review the precedural protections that disable the controller put the special committee in the same place as an independent board that would otherwise get the protection of business judgment.  There was some push-back from Justice Berger on that point - particularly that even though the controller disabled itself, it's the controller who is the impetus for the transaction, not the special committee.  

If the plaintiffs manage to get the Supreme Court to overturn the Chancery Court's opinion in MFW Justice Berger's point will likely be the reason.  While, the special committee and the unaffiliated shareholders can still say no, it's the controller (and only the controller) who always gets the ball rolling.  Because only the controller is permitted to 'set the scene' for the sale, the special committee process and the following shareholder votes are irretrievably infected by a structural bias that requires entire fairness to be the standard rather than business judgment.  There, I made the plaintiff's argument for them.

As in previous cases, I won't hazard a guess on the actual outcome of this argument.  However, I will note the old saying that 'you can't win an appeal at oral argument, but you can lose one.' 

-bjmq

 

December 19, 2013 in Delaware, Going-Privates | Permalink | Comments (0) | TrackBack (0)

Friday, December 13, 2013

Cheap Trick sent back to Illinois

Following along the same theme as yesterday - multi-forum litigation, we have a ruling from Chancellor Strine in the Cheap Trick litigation.  

In short, Chancellor Strine dismissed the case without prejudice in favor of the parties resolving their issues in front of a Federal judge in Illinois.   This litigation is really a pretty garden variety issue at heart -- board members of a corporation with a voting rule that requires unanimous consent of all the members of the board fight with each other about the removal of one member of the board.  Deadlocked, they turn to the courts to help them resolve their mess.  Or, in other words, "What do mean I'm not in the band anymore?"

From the Delawareonline piece:

In August 2013, band members Richard Nielsen, Thomas Peterson and Robin Zander sued drummer Brad Carlson in Delaware Chancery Court seeking to remove him as a member of the group’s board of directors, claiming he left the band in 2010 by no longer performing with them on tour.

A month earlier Carlson had sued Nielsen, Peterson and Zander in U.S. District Court in Illinois over his removal...

In a bench ruling, Strine dismissed the Delaware action in favor of the earlier filed Illinois action.  

Strine said Illinois, where the band formed in the 1970s and where two members still live, was a logical jurisdiction for resolving "garden-variety" questions of contract interpretation, including whether Carlson is still a member of the band.

So, while Delaware may have an institutional interest to keep as much corporate litigation at home as possible, this interest does not prevent Delaware courts from letting go of high-profile litigation when it was clearly filed earlier in another jurisdiction and it doesn't implicate novel issues of Delaware law.

-bjmq

December 13, 2013 in Delaware | Permalink | Comments (0) | TrackBack (0)

Thursday, December 12, 2013

Chiappinelli on Delaware's Success

I have just about fallen down the rabbit hole that is the end of the law school semester and will soon be up to my ears in law school exams.   But, before I disappear, here's a new paper from Eric Chiappinelli, The Underappreciated Importance of Personal Jurisdiction in Delaware's Success:

The judges of the Delaware Court of Chancery are aggressively trying to stop stockholder/plaintiffs from filing corporate law cases outside of Delaware. Delaware believes that its position as the center of corporate litigation is in danger because cases are no longer filed exclusively there. If litigation continues to flow away from Delaware, it would jeopardize Delaware’s prominence in corporate law and the large revenues Delaware receives from out of state businesses that are incorporated there. 

I argue that scholars and the Delaware judges underappreciate the vital importance of personal jurisdiction over corporate directors in Delaware’s quest to become and remain the center of corporate litigation. I show that Delaware’s dominance in litigation in large part stemmed from, and is now dependent upon, its unique system of personal jurisdiction. 

None of Delaware’s attempts to stop cases from flowing out of Delaware will be enduringly successful without addressing the weaknesses in its current personal jurisdiction statute. I argue that Delaware should adopt a new statute that both will remedy the current flaws and will be effective in encouraging stockholder/plaintiffs to litigate in Delaware.

This is a new look on what is a now growing field of research - how to think about multi-jurisdictional litigation.

-bjmq

December 12, 2013 in Delaware | Permalink | Comments (1) | TrackBack (0)

Wednesday, December 4, 2013

Steele steps down quietly

You probably missed the quiet retirement dinner for the Chief Justice at the Wilmington Club last week.  Earlier this week, Delaware's Judicial Nominating Committee passed on all four names (Berger, Jurden, Strine, and Vaughn) to the governor for his consideration.  For now, Justice Holland is the senior justice on the court and the rest of us await Governor Markell's decision.    The Delaware Grapevine has all the inside info here.

-bjmq

December 4, 2013 in Delaware | Permalink | Comments (0) | TrackBack (0)

Dell appraisal petitions

OK, so here is the probably the first of what might ultimately be a handful of appraisal pettions filed with the Delaware Chancery Court.  This one was was entered at the end of October.   OK, so the thing that strikes me immediately is that the petitioner holds only 100 shares.  Really?!  100 shares?!  Definitely someone was drinking the Icahn appraisal kool-aid.  The petitioner looks to get their attorney fees paid for by Dell. I should hope so. With 100 shares at stake, the fees just to file the peition have probably wiped out the economic value of the petitioner's position. The only way this petition makes a lick of sense is if there is a large class of petitioners that this one can join.  

Turns out that the class of shareholders who are seeking appraisal is 47,529,513.  Here's the list of petitioners (verified list of petitioners).  Of those shareholders seeking appraisal, 14% failed to perfect their rights (either by not holding continuously, or by not signing their demand letter, or by submitting the demand letter too late).  That leaves almost 41 million shares seeking appraisal.  Sounds like a lot!  

Actually, it turns out that the 41 million who have perfected their rights represent only 2% of the outstanding shares of Dell.  In many states (but not Delaware), the appraisal statutes require that a minimum percentage (typically 5%) of shareholders seek appraisal before the court will entertain an appraisal petition.  

Icahn himself held over 156 million shares of Dell.  When he decided to take the merger consideration that really took the steam out of appraisal push.

-bjmq 

December 4, 2013 in Delaware | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 19, 2013

Why go to Dover?

WHYY reports that the Delaware Supreme Court has begun to post mp4/video recordings of all arguments.  Right now, video recordings are available back to October 9.  You can find them at the Delaware Supreme Court's website.  Going forward the video recordings will be posted as a matter of course, although they will be one or two days delayed.  Nevertheless, they will be a great resource for lawyers, students, and others interested in the corporate law.    

Even though, one can now watch the arguments from afar, I'm still likely going to find myself going to Dover for the arugments in the pending MFW and Cooper appeals (December 18/19).  Corporate geek.

-bjmq 

 

November 19, 2013 in Delaware, Litigation | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 13, 2013

And then there were two?

According to the Delaware Law Weekly, it's down to two:

Jurden, Strine Still Viewed as Favorites in Chief Justice Race

Delaware legal analysts say that all four candidates to become the next state Supreme Court chief justice are highly qualified, but have handicapped the race for the state's top legal job as a choice between two frontrunners: Court of Chancery Chancellor Leo E. Strine Jr. and Superior Court Judge Jan R. Jurden
 
But why do the headline writers characterize this selection as a race? 
 
-bjmq

November 13, 2013 in Delaware | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 12, 2013

Delaware Arbitration Procedure Appeal Deadline

So, notwithstanding statements that Delaware was considering filing an appeal of the third circuit's opinion declaring the Chancery Court's arbitration procedure unconstitutional, it has allowed the first deadline to pass

Attorneys for Delaware and the Chancery Court could have demanded that all the judges on the U.S. Third Circuit Court of Appeals review the case, a procedure called an “en banc” review, but the deadline to make that request expired Nov. 6, leaving only a possible appeal to the U.S. Supreme Court, which must be done by January 21.

We'll see.  My personal opinion: Delaware should permit the arbitration procedure to go forward, but require the proceedings to remain open to the public.  

-bjmq

November 12, 2013 in Delaware, Litigation | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 23, 2013

Delaware Arbitration Procedure Unconstitutional

So there you have it.  Just hit PACER today (h/t  KWC).  Here's  the opinion (DCOGvStrine).  Lengthy exploration of civil trials and arbitrations in the opinion.  I'm reading now...

-bjmq

 

From the opinion:

Finally, Appellants argue that opening the proceeding would effectively end Delaware’s arbitration program. This argument assumes that confidentiality is the sole advantage of Delaware’s proceeding over regular Chancery Court proceedings. But if that were true—if Delaware’s arbitration were just a secret civil trial—it would clearly contravene the First Amendment right of access. On the contrary: as the Appellants point out in the rest of their brief, there are other differences between Delaware’s government-sponsored arbitration and regular Chancery Court proceedings. Arbitrations are entered into with the parties’ consent, the parties have procedural flexibility, and the arbitrator’s award is subject to more limited review. Thus, disputants might still opt for arbitration if they would like access to Chancery Court judges in a proceeding that can be faster and more flexible than regular Chancery Court trials.

Funny, I think someone I know argued just that same argument not long ago.... More from the opinion:

Delaware’s proceedings are conducted by Chancery Court judges, in Chancery Court during ordinary court hours, and yield judgments that are enforceable in the same way as judgments resulting from ordinary Chancery Court proceedings. Delaware’s proceedings derive a great deal of legitimacy and authority from the state. They would be far less attractive without their association with the state. Therefore, the interests of the state and the public in openness must be given weight, not just the interests of rich businesspersons in confidentiality.

Like history, logic weighs in favor of granting access to Delaware’s government-sponsored arbitration proceedings. The benefits of access are significant. It would ensure accountability and allow the public to maintain faith in the Delaware judicial system. A possible decrease in the appeal of the proceeding and a reduction in its conciliatory potential are comparatively less weighty, and they fall far short of the “profound” security concerns we found compelling in North Jersey Media Group. See 308 F.3d at 220.

Because there has been a tradition of accessibility to proceedings like Delaware’s government-sponsored arbitration, and because access plays an important role in such proceedings, we find that there is a First Amendment right of access to Delaware’s government-sponsored arbitrations. We will therefore affirm the order of the District Court.

Boom.  There you have it.  A resounding victory for my profession...in that there will continue to be a corporate law for me to teach going forward... 

October 23, 2013 in Delaware | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 22, 2013

Tomato, Tomahto

Last month, I posted a little blurb on Vice Chancellor Laster's denial of a motion to consolidate based in part entirely on the fact that plaintiffs had captioned the consolidated case "shareholder litigation" and not "stockholder" litigation.  The Vice Chancellor's comments were succinct, "Under whose law do you think you are litigating?"  

Me?  I find that kind of thing entertaining and on the whole not troublesome.  Afterall, I remember my brief experience as an associate.  In my first drafting project, I used shareholder and stockholder interchangeably.  Using the same word all the time seemed so ... boring.  Of course, there was a sea of red ink on the document when it came back.  OK, lesson learned - consistency in drafting.  The next version of the document went up and came back in another sea of red ink!  Stockholder, not shareholder.... grumbles among the associate ranks, but okay.  In a later assignment, I decided to show how much I learned, so I was consistent and only used 'stockholder'.  The joke was on me, though.  More red ink ... it's shareholder for California corporations!  

What? You've never had an experience like this?  I find that odd.  Of course you have.  Who instructs their associates to draft in any which way they please?  No one, that's who.  

In any event, the whole tomato/tomahto thing generated a little bit of a kerfluffle in ways that my regular posts of insider trading or LBOs just don't.  

My take?  This is an internal affair of the State of Delaware.  If the courts of Delaware have decided that plaintiffs should caption their litigation "stockholder litigation" and not "shareholder litigation", so be it.  Who am I to complain?   No substantive rights are affected either way, so let Delaware have its way.  

It's not like last month's denial was the first time Vice Chancellor Laster has been tilting at this particular windmill.   Last year, he observed  in a settlement hearing in Adams Shareholder Litigation:

 "Today's hearing is so that I can consider the proposed class action settlement in In re Adams Golf Shareholder Litigation, C.A. No. 7354.  I note, for the benefit of everyone who captions these cases, that with the 2010 amendments to the Delaware General Corporation Law, there are no longer any stray references in the DGCL that use the term 'shareholder.'  The DGCL uniformly uses the term 'stockholder.'  'Shareholder' is a model act concept, although it did slip in in Section 203 for a few years.  And certainly our decisions are not always scrupulous in observing the distinction.  Nevertheless, I will humor myself, if no one else, by thinking of this privately as In re Adams Golf Stockholder Litigation."

A check of the Delaware code turns up only one reference to shareholder -- a stray parenthetical reference in the new Section 251(g) (hey, someone get on that!).  Otherwise, the word shareholder is nowhere to be found.  

What to make of all this?  It's not as if stockholders of Delaware corporations lose or are otherwise denied substantive rights if they call themselves shareholders.  The two words are, afterall, synonyms in normal parlance.  However, if attention to detail is the stock and trade of a transactional lawyer's craft -- and it is, it is -- then it's surprising to me that there might be even the slightest pushback in a demand that we pay attention to detail.  

So...tomato, tomahto I guess...but if you are in front of a Delaware court, you better make sure it's stockholder all the same.

-bjmq

October 22, 2013 in Delaware | Permalink | Comments (0) | TrackBack (0)

Monday, October 14, 2013

Handicapping Delaware

The Delaware News Journal (via Delaware Online) handicaps the pick for Chief Justice of the Delaware Supreme Court.  Although there are a number of possibles, the News Journal thinks it comes down to a choice between Chancellor Leo Strine and Justice Randy Holland.  Of course, a selection of Randy Holland as Chief Justice doesn't preclude elevating Chancellor Strine to the Supreme Court.  More and more signs seem to be pointing to Strine at least getting elevated to the Supreme Court.  I wonder if he even wants that particular job.  I suppose he might.  If he does get a nod, then that leaves his seat as Chancellor open.  Any takers there? 

-bjmq

October 14, 2013 in Delaware | Permalink | Comments (0) | TrackBack (0)

Friday, September 27, 2013

Delaware Supreme Musings

So...what? You think you know who is going to get nominated to fill Chief Justice Steele's soon to be empty seat? Ha. You know nothing.  Want some informed speculation, beyond, "Well, it's Strine, right?" then go here to the Delaware Grapevine.  You'll get tidbits like this:

For now, there is no telling who will be next to assume the Supreme Court's center seat.

Within the state's legal circles, it would not be seen as a surprise if all four justices apply. Other names being mentioned are: Leo Strine Jr., the chancellor from the Court of Chancery; Jim Vaughn Jr., the president judge of the Superior Court; and Jan Jurden, a Superior Court judge.

Or even better, insight like this that might really inform who gets the nod:

All eyes are primarily on Leo Strine Jr., the chancellor on Chancery, and Jan Jurden, a judge on the Superior Court, as the major contenders for chief justice, although the field easily could include any or all of the justices, the presiding judges of other courts and various senior partners, particularly the ones with corporate law practices.

Strine is as aggressively brilliant as Jurden is logistically grounded, his Slytherin to her Gryffindor.

Before they were judges, they did a turn in the political trenches, Strine as the counsel to Tom Carper, when the Democratic senator was the governor, and Jurden as an officer for the New Castle County Democratic Party.

They practiced at firms known as incubators for judges, Strine at Skadden, the out-of-state behemoth, and Jurden at Young Conaway Stargett & Taylor, the homegrown powerhouse.

Strine has been through a cutthroat confirmation war already. Carper wanted to make him a vice chancellor in 1998, but Strine as his counsel was not known for suffering fools, and this attitude was perhaps not the best approach for dealing with the legislature, kind of known as a ship of fools. There were hard feelings.

Strine did get confirmed, but not before Carper agreed to name one senator's son a judge and another senator's nephew a Family Court commissioner.

Jurden had no such trouble when Ruth Ann Minner, the Democratic governor, put her on the bench in 2001. All she had hanging out there were the editorial cartoons drawn by Jack Jurden, her father. Her confirmation went easily.

It's cheaper than getting on the Acela and probably much better informed than what you'll hear in the Club Car.

-bjmq

September 27, 2013 in Delaware | Permalink | Comments (0) | TrackBack (0)

Monday, September 23, 2013

Shareholder/Stockholder

Kyle Wagner Compton's deep dive into the Delaware Chancery Court turns up another example of Vice Chancellor Laster trying to move mountains - in this case trying to get lawyers to refer to shareholder litigation as stockholder litigation.  Vice Chancellor Laster denied a proposed order to consolidate a series of cases into a single case titled " In re Astex ShareholderLitigation" with the following: 

"Shareholders litigation?  Under what state's corporate law do you believe you are litigating?"

Laster has been trying to change conventions for while now.  Students sometime ask what's the difference between shareholder and stockholder.  The correct answer is, well, nothing, but...but...corporate law drafting isn't creative writing.  To the extent one is looking at the statute, it's probably always better practice to rely on the language of the statute.  Laster's effort is a small one to move away from the convention of calling representative litigation in Delaware shareholder litigation.  Since the corporate code refers only to stockholders, proper usage should indicate captioning shareholder litigation, stockholder litigation.

-bjmq

September 23, 2013 in Corporate, Delaware | Permalink | Comments (1) | TrackBack (0)

Monday, September 9, 2013

Dell battle over

Although the vote is not until September 12, Icahn threw in the towel today.  From his letter to stockholders:

One of the great strengths of our country is that we abide by the rule of law.  However, state laws dealing with corporate governance often favor incumbent corporate boards and management and are weak in many areas.  While we must abide by these laws, we believe that they can and must be changed.  Among many other things, boards should not be able to treat elections as totalitarian dictatorships do; where if they lose, they simply ignore the results.
The Dell board, like so many boards in this country, reminds me of Clark Gable’s last words in “Gone with the Wind,” they simply “don’t give a damn.” If you are incensed by the actions of the Dell Board as much as I am, I hope you will choose to follow me on Twitter where from time to time I give my investment insights.  I also intend to point out what I consider to be unconscionable actions by boards and discuss what remedies shareholders may take to change the situation...

 Well...okay then. What happened to the appraisal threat?  I guess that's not going to happen, either?

-bjmq

September 9, 2013 in Delaware, Leveraged Buy-Outs | Permalink | Comments (2) | TrackBack (0)