By: Lori Smith and Melissa Nott Davis
The Delaware Chancery Court recently reaffirmed several important contract interpretation principles in Post Holdings, Inc. v. NPE Seller Rep LLC, Civil Action No. 2017-0772-AGB. The case highlights the fact that a party claiming its contractual obligations were excused by a material breach by the other party may not seek or continue to receive any benefits under the contract after the alleged material breach. The court also clarified set-off rights under a stock purchase agreement. (more…)
By: Michael Mentzel
If you just bought a brand new car, would you drive it off the lot without insurance? Of course you wouldn’t, but many entrepreneurs in a hurry to get their business going set up corporations without considering the risks of proceeding without a shareholders agreement.
Like insurance, you are likely to give a shareholders agreement little thought when things are going well, but if the relationships among the shareholders become contentious, you will find that the time and effort put into crafting a shareholders agreement was worthwhile.
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By: Marc Casarino and Lori Smith
The Delaware Court of Chancery in Manti Holdings LLC v. Authentix Acquisition Company recently confirmed that a stockholder agreement may contractually restrict the exercise of statutory appraisal rights. Although the court has previously ruled on the enforceability of waivers of preferred stockholders’ appraisal right, this marks the first time that a Delaware court has ruled on the enforceability of contractual restriction of appraisal rights for common stockholders. The decision provides guidance for negotiating and drafting investment-related documents to properly address effective waiver of appraisal rights when a triggering event occurs. (more…)
By: John K. Baker and Victoria Fuller
Today, August 10, 2018, Massachusetts Governor Charlie Baker signed into law a comprehensive economic development act which amends the Massachusetts General Laws Chapter 149 to create a new Section 24L, which will impose substantial new restrictions on employers’ use of non-compete agreements.
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By: Lori Smith
Effective August 1, 2018, Delaware amended the Delaware Revised Uniform Limited Partnership Act (LP Act) and the Delaware Limited Liability Company Act (LLC Act) to, among other things: (i) add a provision permitting the division of limited liability companies into two or more limited liability companies, (ii) permit the use of blockchain technology and distributed ledgers for certain activities, and (iii) create a new type of Delaware LLC series known as a “registered series.” (more…)
By: Carl Seldin Koerner
Any contract worth its salt will contain a substantial amount of “boilerplate”: those provisions at the back that seem to go on in endless succession, reviewed only by the lawyers tasked with proofreading, but rarely anyone else. The etymology of the phrase is actually quite interesting. Boilerplate is a type of rolled steel used primarily for the manufacture of water boilers. But the coinage of the term, used to refer to repetitive or unoriginal writing, arises from another use of that rolled steel, newspaper plates. There was a time when newspapers were printed from steel printing plates manufactured from set type. Just as they do today, small local newspapers without the budget for too many reporters of their own, would purchase content in bulk to fill their pages, often with advertising built in. In the pre-digital age the bulk content didn’t arrive as a zip file. Instead it arrived in steel plates ready for the press. Over time the prepackaged material was derogatorily called “boilerplate” to distinguish it from the original local content.
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By: Michael Mentzel and Gwenn Barney
Over the years, contract drafters have been relatively imprecise in describing the efforts required of contracting parties in performance of their obligations. Among contract drafters, it is generally believed that “best efforts” is a much more stringent and onerous standard than many of the other variations such as “commercially reasonable efforts” or “reasonable best efforts,” but is less than an absolute duty to perform the obligation at any cost. However, there is no legal dictionary or treatise that provides a generally accepted definition of the term, or for the numerous other variations that drafters often include in contracts, under the perhaps misguided assumption that they will result in application of a less stringent standard. (more…)
“Taking Care of Business” is a new blog from White and Williams’ Corporate and Securities Group. With the help of our friends in Cyber Law and Data Protection, Tax, Real Estate and Finance, Bankruptcy, Intellectual Property, Labor & Employment and Commercial Litigation, TCB will focus on emerging issues impacting the business community at every stage of the lifecycle from formation to growth and to exit. Whether it be important updates on day-to-day operational matters such as tax planning, employee benefits, commercial contracts, corporate finance, intellectual property, regulatory and data privacy and cybersecurity, or best practices and recent trends or legal developments of note applicable to transactional matters including acquisitions, strategic alliances, private equity and venture capital financings and debt financings, we’ve got you covered. And of course, we will keep you posted on any recent developments on the litigation and bankruptcy fronts too. In short, TCB will be a “one stop shop” for insights and commentary on everything relevant to owning and operating a business.
To give you a sense of the breadth of topics to be covered, today’s blog highlights five current legal issues that are on the minds of many of our clients. (more…)