The Delaware General Corporation Law provides several specialized statutory remedies in the corporate context. Delaware's alternative entity statutes provide many similar remedies in the LP and LLC context. While technical in nature, these special statutory proceedings can prove critical in contests for control and other areas.
- Section 145. 8 Del. C. § 145 grants corporations the power to indemnify officers, directors and employees for liability and expenses incurred as a result of their work on behalf of the corporation, and to advance associated expenses. Most recently, in Benning v. Swish Marketing, Inc., C.A. No. 4785-VCN, Seitz Ross attorneys represented a former chief executive officer and director in an advancement dispute arising out of a regulatory investigation.
- Section 220 (and Section 305 of the LLC Act). 8 Del. C. § 220 authorizes stockholders to demand an opportunity to inspect the books and records of a corporation under certain circumstances. 18 Del. C. § 305 provides a comparable remedy for LLC members. Seitz Ross attorneys have handled significant books and records litigation in both contexts, including Pershing Square, L.P. v. Ceridian Corp., C.A. No. 2780-CC (Del. Ch. 2007), available at 923 A.2d 810; Van Caneghem v. Triton Worlds, Inc., C.A. No. 6096-CC (Del. Ch. 2010); and Progressive Financial Strategies, LLC v. Focus Financial Partners, LLC, C.A. No. 5086-VCL (Del. Ch. 2009).
- Section 225 (and Section 110 of the LLC Act). 8 Del. C. § 225 authorizes the Court of Chancery to determine the validity of a contested election, appointment, removal or resignation of any director or officer of a corporation. 18 Del. C. § 110 provides a mechanism for the Court of Chancery to resolve disputes regarding the election of managers of a limited liability company. Seitz Ross attorney Garrett Moritz was involved in In re IAC/InterActiveCorp, C.A. No. 3486-VCL (Del. Ch. 2008), available at 948 A.2d 471, a significant Section 225 action regarding whether Liberty Media or Barry Diller had the power to appoint the directors of IAC. In Royal Bank of Scotland PLC v. Rastetter, C.A. No. 5475-VCP (Del. Ch. 2010), Seitz Ross attorneys served as Delaware counsel to a board of managers in expedited litigation with a lender regarding the effectiveness of proxies issued in connection with a loan transaction and the purported removal of the board.
- Section 262. 8 Del. C. § 262 provides stockholders with a procedure to obtain a judicially determined “fair value” for their shares following certain categories of transactions. C.J. Seitz successfully litigated Cavalier Oil Corp. v. Harnett (Del. 1989), which has become a leading decision in this area.