Source: https://www.klgatesdelawaredocket.com/category/summary-judgment/
Timestamp: 2019-04-26 08:15:53+00:00

Document:
In Mesirov v. Enbridge Company, Inc., et al. C.A. No. 11314-VCS (Del. Ch. Aug.29, 2018), the Delaware Chancery Court dismissed five of eight counts alleged with respect to a transaction where Enbridge Energy Company (EEP) repurchased for $1 billion a two-thirds interest in Alberta Clipper Pipelines (AC interest), despite the fact that EEP had sold that same interest years prior for $800 million and the business had steadily declined since such sale. The dismissals were based primarily upon the language and obligations included in EEP’s limited partnership agreement.
In AM General Holdings LLC v. The Renco Group, Inc., C.A. No. 7639-VCS and The Renco Group, Inc. v. MacAndrews AMG Holdings LLC, C.A. No. 7668-VCS (Del. Ch. May 17, 2017), the Delaware Court of Chancery denied cross-motions for partial summary judgment after reviewing the LLC Agreement of AM General Holdings LLC, which governs the joint venture relationship between Plaintiff, The Renco Group, Inc. (“Renco”), and Defendant, MacAndrews AMG Holdings LLC (“MacAndrews”), both members of AM General Holdings LLC (the “Company”). Renco brought suit against MacAndrews alleging that MacAndrews, the managing member of the Company, caused the Company to distribute $72.8 million to MacAndrews in breach of the Company’s LLC Agreement. Renco contended that, according to the LLC Agreement, the $72.8 million should have been distributed to Renco instead. Both parties pointed to several provisions of the LLC Agreement governing the distribution at issue, and both parties contended that these provisions were clear and unambiguous. After reviewing the provisions, however, the Court determined that the provisions were, in fact, ambiguous and thus, the case could not be disposed of through summary judgment proceedings.
Vice Chancellor Glasscock, by memorandum opinion dated February 28, 2017, dismissed cross-motions for partial summary judgment in a dispute over the issuance of partnership units of Energy Transfer Equity, L.P., a Delaware master limited partnership (“ETE”). The challenged issuance (the “Issuance”) arose out of a contemplated, but never consummated, merger between ETE and The Williams Companies, Inc. (“Williams”), and was designed, according to the defendants, as a tool to improve ETE’s ability to enter into the merger by deferring some of ETE’s obligations to make distributions to its unitholders. The Issuance was intended to accomplish this by having certain unitholders give up their common units, which were entitled to quarterly distributions from ETE, in exchange for convertible units, which received distributions on a different schedule. Not all unitholders, however, were afforded the opportunity to participate in the Issuance and not all of the unitholders given the opportunity to participate chose to do so.
In Joel Z. Hyatt and Albert A. Gore, Jr. v. Al Jazeera America Holdings II, LLC and Al Jazeera International (USA) Inc., the Delaware Court of Chancery reviewed a motion for summary judgment in connection with a dispute regarding the advancement of fees for the litigation of various post-merger indemnification claims. The Chancery Court held that the plaintiffs were entitled to advancement for certain claims, but not for others, depending on whether the underlying facts of each claim required the plaintiffs to defend their actions as former officers or directors.
In Fotta v. Morgan, C.A. No. 8230-VCG (Feb. 29, 2016), Vice Chancellor Glasscock denied cross motions for summary judgment and granted a motion to dismiss for failure to comply with Rule 23.1. After determining that factual issues remained as to causes of action brought by certain stockholders of First Orion Corp. for waste, breach of fiduciary duty, and statutory claims, the Court of Chancery was unable to determine whether a significant creditor to nominal defendant First Orion Corp. used its control over the board of directors to divert equity to itself in breach of duties owed to the common stockholders.
In Hampton v. Turner, Vice Chancellor Noble denied a motion for summary judgment in a dispute about whether a limited liability company had properly exercised a redemption option under its operating agreement and tendered the correct purchase price for three members’ limited liability company interests, after such members sought judicial dissolution of the company. In denying summary judgment, Vice Chancellor Noble found that the operating agreement was unambiguous with respect to the application of the redemption option provisions and how those should be interpreted to determine a purchase price.
This case involves a plaintiff who sought advancement for his legal fees and expenses in connection with insider trading charges. In opining on the defendant’s motion to dismiss or stay the action and the plaintiff’s motion for summary judgment, the Court considered various issues, including the four-factor analysis of McWane and the difference between advancement and indemnification.
Nipro Diagnostics, Inc. (“Nipro”), the defendant, acquired Home Diagnostics, Inc. (“HDI”) on March 15, 2010. Soon after the merger, the SEC began an investigation of George H. Holley (“Holley”), the founder and chairman of HDI and the plaintiff in this case, for suspicious trading in HDI stock around the time of the merger announcement (the “SEC Investigation”). On May 20, 2010, Holley requested that HDI advance his expenses in the SEC Investigation, and executed an undertaking (required with any advancement) promising to repay HDI for any advanced expenses if it were ultimately determined that Holley was not entitled to indemnification. From June 2010 to November 2010, Nipro advanced Holley’s expenses relating to the SEC Investigation. On January 13, 2011, the SEC commenced an action against Holley for violating federal securities laws by disclosing information about the merger (the “SEC Action”). On February 4, 2011, Holley was indicted in the U.S. District Court for the State of New Jersey for insider trading (the “Criminal Action”). On August 19, 2011, the New Jersey U.S. Attorney’s Office obtained a stay of the SEC Action. Holley eventually pled guilty to two counts of insider trading in the Criminal Action.
In an ongoing dispute between the members of a Delaware limited liability company, Vice Chancellor Parsons was tasked with resolving pre-trial motions filed by both the managing member defendants and the non-managing member plaintiffs. Except for plaintiffs’ claim of waste, V.C. Parsons denied the defendants’ Rule 12(b)(6) motion to dismiss finding that, drawing all reasonable inferences in favor of plaintiffs, facts have been pleaded that make the defendants’ inappropriate at this stage of the litigation. In addition, V.C. Parsons denied plaintiffs motion of summary judgment, which sought to remove the defendant LLC from its position as managing member, finding that the plaintiffs have not yet produced evidence sufficient to meet their burden of showing that they are entitled to judgment as a matter of law.
This case involves an ongoing dispute between the managing member and non-managing members of Dunes Point West, LLC, a Delaware limited liability company (the “Company”). The Company was formed in 2006 to acquire and operate an apartment complex in in the State of Kansas (the “Apartment Complex”). Presently, Louis Cortese and the 2009 Caiola Family Trust (“Plaintiffs”) collectively hold 90% of the membership interests in the Company. Defendants include the Company’s managing member and holder of 10% of its membership interests, PWA, LLC, a Kansas limited liability company (“PWA”) and Ward Katz, the managing member of PWA.

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