In a significant decision that clarifies the standards for determining controlling stockholder status, the Delaware Court of Chancery dismissed claims against AstraZeneca and Viela Bio’s directors in connection with Viela’s $3 billion sale to Horizon Therapeutics. The case, Sciannella v. AstraZeneca UK Limited et al., addressed whether AstraZeneca, which held a 26.7% stake
Fiduciary Duties
Delaware Court of Chancery Rescinds Musk’s $55.8B Tesla Stock Option Grant in Key Decision on Corporate Transactions with Controlling Stockholders
By Carl D. Neff on
On January 30, 2024, the Delaware Court of Chancery rescinded Tesla, Inc. (“Tesla”)’s January 2018 grant to CEO Elon Musk of performance-based stock options with a potential $55.8 billion maximum value and a $2.6 billion grant date fair value (the “Grant”).[1] The lawsuit was filed derivatively against Musk, in his capacity as Tesla’s controlling shareholder…
Delaware Court of Chancery Grants in Part and Denies in Part Defendants’ Motion to Dismiss Direct and Derivative Claims
By Carl D. Neff on
In the recent decision of Schoenmann v. Irvin, et al., C.A. No. 2021-0326-SG (Del. Ch. Jun. 2, 2022), the Delaware Court of Chancery denied in part and granted in part Defendants’ motion to dismiss Plaintiff’s direct and derivative claims against Clear Align, LLC and its President, CEO and majority Board member, Angelique Irvin. While…
Delaware Court of Chancery Upholds Written Consent Removing Board of Directors in Section 225 Action
By Carl D. Neff on
In the decision of Dengrong Zhou v. Long Deng and Mark Fang, C.A. No. 2021-0026-JRS (Del. Ch. Apr. 6, 2022) (Mem. Op.), the Delaware Court of Chancery found that a majority of stakeholders from iFresh, Inc. (the “Control Group”) had validly executed a written consent (the “Consent”) removing Defendants Deng and Fang from the…
Delaware Court of Chancery Dismisses Caremark Claim for Failure to Sufficiently Plead Demand Futility
By Carl D. Neff on
The Delaware Court of Chancery recently dismissed a derivative lawsuit asserting a Caremark claim for failure to adequately allege demand futility under Court of Chancery Rule 23.1. The opinion, Pettry v. Smith, et al., C.A. No. 2019-0795-JRS (Del. Ch. June 28, 2021), provides a helpful roadmap regarding the assertion of demand futility under Delaware…
Chancery Grants Dismissal of Claims under Revlon Standard, Citing Exculpatory Provision
By Carl D. Neff on
In the recent decision of Rudd v. Brown, et al., C.A. No. 2019-0775-MTZ (Del. Ch. Sept. 11, 2020), the Delaware Court of Chancery granted defendants’ motion to dismiss plaintiffs’ derivative claims in their entirety in light of an exculpatory provision in the corporation’s charter.
Plaintiffs’ derivative claims alleged that the company’s directors breached their…