operative standard in Delaware

2020LLC, 27 A.3d 531, 536 (Del. 2011). - 25 - could not recover under any reasonably conceivable set of circumstances susceptible of proof.68 The operative test here is one of “reasonable conceivability.”69 This standard asks whether there is a “possibility” of recovery. 70 And Delaware’s test is more lenient than the federal “plausibility” pleading standard, which invites judges to “‘determin[e] whether a complaint states a plausible claim for relief’ and ‘draw on . . . judicial experience and common sense.’”71 So this Court does not assess a claim’s plausibility.72 When a defendant invokes Rule

2020LLC, 27 A.3d 531, 536 (Del. 2011). - 25 - could not recover under any reasonably conceivable set of circumstances susceptible of proof.68 The operative test here is one of “reasonable conceivability.”69 This standard asks whether there is a “possibility” of recovery. 70 And Delaware’s test is more lenient than the federal “plausibility” pleading standard, which invites judges to “‘determin[e] whether a complaint states a plausible claim for relief’ and ‘draw on . . . judicial experience and common sense.’”71 So this Court does not assess a claim’s plausibility.72 When a defendant invokes Rule

2025Ch. 2005). 61 Dollar Thrifty, 14 A.3d at 595–96. 57 interests of the corporate fiduciaries and their beneficiaries could diverge.62 Enhanced scrutiny therefore provides the operative standard of review.63 62 See In re Columbia Pipeline Gp., Inc. Merger Litig., 299 A.3d 393 , 460 (Del.

2014The operative standard of review for this case, however, is enhanced scrutiny, an intermediate standard that applies in situations where “there is a basis for concern that directors without a pure self-dealing motive might be influenced by considerations other than the best interests of the corporation and other stockholders.” Dollar Thrifty, 14 A.3d at 599 n. 181.

2026This request is framed in the alternative, but I address it at the outset because granting discovery could make any substantive analysis of Advent’s motion premature. 32 Id. ¶ 2. 33 Malpiede v. Townson, 780 A.2d 1075, 1091 (Del. 2001). 7 56(f) rather than Rule 26.34 Servicios Funerarios must show that, absent discovery, it cannot present facts essential to oppose summary judgment.35 It failed to meet that standard for the majority of its requests.

2023The Breaches Of Duty In The Sale Process The second element of a claim for aiding and abetting is “a breach of the fiduciary’s duty.” Malpiede, 780 A.2d at 1096 (internal quotation marks omitted).

2022Games, Inc. v. Garrity, 366 F.3d 569 , 574 (7th Cir. 2004) (Posner, J.) (“The defense of in pari delicto is intended for situations in which the victim is a participant in the misconduct giving rise to his claim as in the classic case of the highwayman who sued his partner for an accounting of the profits of the robbery they had committed together.” (cleaned up)); United States v. Bedi, 453 F. Supp. 3d 563 , 572 (N.D.N.Y. 2020) (“[T]he equitable principle to be derived from The Highwayman’s Case is that of in pari delicto, or perhaps unclean-hands, depending on the precise context in which the

2022Games, Inc. v. Garrity, 366 F.3d 569 , 574 (7th Cir. 2004) (Posner, J.) (“The defense of in pari delicto is intended for situations in which the victim is a participant in the misconduct giving rise to his claim as in the classic case of the highwayman who sued his partner for an accounting of the profits of the robbery they had committed together.” (cleaned up)); United States v. Bedi, 453 F. Supp. 3d 563 , 572 (N.D.N.Y. 2020) (“[T]he equitable principle to be derived from The Highwayman’s Case is that of in pari delicto, or perhaps unclean-hands, depending on the precise context in which the

2022Framed generally, the operative test is whether the fiduciary has taken action that causes stockholders to act—whether by voting or making an investment decision like tendering shares—for some reason other than the merits of the proposed transaction.36 36 Id.; see Williams v. Geier, 671 A.2d 1368 , 1382–83 (Del. 1996) (“Wrongful coercion may exist where the board or some other party takes actions which have the effect of causing the stockholders to vote in favor of the proposed transaction for some reason other than the merits of that transaction.”); Weiss v. Samsonite Corp., 741 A.2d 366, 372

2020Ch. 1987) (holding that inaccurate disclosures rendered a self-tender offer coercive), with Williams v. Geier, 671 A.2d 1368, 1383 (Del. 1996) (explaining that a fiduciary is obligated 52 The operative test for this strand of coercion is whether the fiduciary has taken action which causes stockholders to act—whether by voting or making an investment decision like tendering shares—for some reason other than the merits of the proposed transaction.11 Under this strand of coercion jurisprudence, if stockholders can reject the transaction and maintain the status quo, then the transaction is not coe

2021Subject to the court’s consideration of whether the 272 Kuhn Constr., Inc. v. Diamond State Port Corp., 990 A.2d 393, 396-97 (Del. 2010) (“We will read a contract as a whole and we will give each provision and term effect, so as not to render any part of the contract mere surplusage.”). 273 Tr. 977-78 (Bryant). 62 conclusive presumption of good faith in Section 7.10(b) applies here, which is discussed next, the court will apply the Fair and Reasonable standard.

2021Subject to the court’s consideration of whether the 272 Kuhn Constr., Inc. v. Diamond State Port Corp., 990 A.2d 393, 396-97 (Del. 2010) (“We will read a contract as a whole and we will give each provision and term effect, so as not to render any part of the contract mere surplusage.”). 273 Tr. 977-78 (Bryant). 62 conclusive presumption of good faith in Section 7.10(b) applies here, which is discussed next, the court will apply the Fair and Reasonable standard.

2016See In re MFW S’holders Litig., 67 A.3d 496 , 519 & nn.107 & 109 (Del.

2016The Operation Of The Business Judgment Rule Once the elements of M&F Worldwide are met, the business judgment rule provides the operative standard of review. ―Under that rule, the court is precluded from inquiring into the substantive fairness of the merger, and must dismiss the challenge to the merger unless the merger‘s terms were so disparate that no rational person acting in good faith could have thought the merger was fair to the minority.‖ MFW, 67 A.3d 496 at 500 . ―[It is] logically difficult to conceptualize how a plaintiff can ultimately prove a waste or gift claim in the face of a de

2021Plaintiffs argue that, because the NAI Parties stood on both sides of the Merger, and elected not to trigger the MFW safe harbor, entire fairness should apply as the operative standard of review come what may.373 Defendants disagree with the fundamental premise of Plaintiffs’ argument—i.e., that Delaware law requires entire fairness review any time a controlling stockholder stands on both sides of a transaction—and argue that the Merger’s pro rata treatment of minority stockholders allows the business judgment rule to remain as the standard of review. 374 According to Defendants, in a case lik

2020Unlike the transaction at issue in Crane, the 47 Reclassification did not follow the template set out in Kahn v. M & F Worldwide, Corp., 88 A.3d 635 (Del. 2014), so entire fairness would remain the operative standard of review.  At a minimum, Andreesen’s back-channel communications with Zuckerberg prevented the Committee from functioning effectively.

2016The Delaware Supreme Court affirmed that the entire fairness framework provided the operative standard of review for the asset transfer, holding that “[r]egardless of where the burden lies, when a controlling shareholder stands on both sides of the transaction the conduct of the parties will be viewed under the more exacting standard of entire fairness as opposed to the more deferential business judgment standard.” Id. at 428 .

2016The Delaware Supreme Court affirmed that the entire fairness framework provided the operative standard of review for the asset transfer, holding that “[r]egardless of where the burden lies, when a controlling shareholder stands on both sides of the transaction the conduct of the parties will be viewed under the more exacting standard of entire fairness as opposed to the more deferential business judgment standard.” Id. at 428 .

2021Oct. 10, 2016) (“When the business judgment rule provides the operative standard of review, then a court will not consider the substance of the transaction unless its terms are so extreme as to constitute waste.”), aff’d, 164 A.3d 56 (Del. 2017) (TABLE). 336 Corwin, 125 A.3d at 313 . 95 loyalty concerning Mathrani’s Employment Agreement against Mathrani, Brookfield and the other Brookfield Defendants) are dismissed.

2018Under Corwin, however, the business judgment rule would apply if the directors had complied with their duty of disclosure. 477 This decision has held that the Recommendation Statement was misleading, so the fact that holders of a majority of the Company’s shares tendered into the first step of the medium- form Merger does not lower the standard of review.478 475 Revlon, 506 A.2d at 180–82. 476 See, e.g., El Paso, 41 A.3d at 439 (“[T]he potential sale of a corporation has enormous implications for corporate managers and advisors, and a range of human motivations, including but by no means limit

2026Because the parties have tried these claims, the sufficiency of the pleadings is no longer the operative inquiry.171 I proceed to resolve the counterclaims on the merits. 167 I need not reach the issue of prejudice as to Counterclaim IX, because the plaintiffs did not give express or implied consent to try this claim. 168 See, e.g., Gortikov Tr. 279-30 (discussing the funds raised at the time of closing, pertinent to Counterclaim Counts VII and VIII); id. at 352-53 (same); LLC Agreement § 2.2 (same). 169 Bellanca, 169 A.2d at 622 (stating that, where “no additional evidence” is offered, “there

2026In civil cases not involving business entities, the Delaware Supreme Court has defined gross negligence as “a higher level of negligence representing ‘an extreme departure from the ordinary standard of care.’” 73 Under 72 Singh v. Attenborough, 137 A.3d 151, 151 (Del. 2016) (ORDER) (“Absent a stockholder vote and absent an exculpatory charter provision, the damages liability standard for an independent director or other disinterested fiduciary for breach of the duty of care is gross negligence, even if the transaction was a change-of-control transaction.”); accord McMillan v. Intercargo Corp.,

2026The concept of reasonable belief is an objective test . . . .”55 Under Rule 23.1, a plaintiff must plead particularized facts sufficient to give rise to a reasonable doubt, but that does not mean that a plaintiff must “plead particularized facts sufficient to sustain ‘a judicial finding’” that a director would be disabled from considering a demand.56 That requirement would impose “an excessive 52 Grimes, 673 A.2d at 1217 (footnote omitted). 53 Id. 54 Id. 55 Id. at 1217 n.17. 56 Grobow, 539 A.2d at 183 . 39 criterion” for applying Rule 23.1.57 The operative standard is the reasonable doubt test

2026The concept of reasonable belief is an objective test . . . .”55 Under Rule 23.1, a plaintiff must plead particularized facts sufficient to give rise to a reasonable doubt, but that does not mean that a plaintiff must “plead particularized facts sufficient to sustain ‘a judicial finding’” that a director would be disabled from considering a demand.56 That requirement would impose “an excessive 52 Grimes, 673 A.2d at 1217 (footnote omitted). 53 Id. 54 Id. 55 Id. at 1217 n.17. 56 Grobow, 539 A.2d at 183 . 39 criterion” for applying Rule 23.1.57 The operative standard is the reasonable doubt test

2026In civil cases not involving business entities, the Delaware Supreme Court has defined gross negligence as “a higher level of negligence representing ‘an extreme departure from the ordinary standard of care.’” 73 Under 72 Singh v. Attenborough, 137 A.3d 151, 151 (Del. 2016) (ORDER) (“Absent a stockholder vote and absent an exculpatory charter provision, the damages liability standard for an independent director or other disinterested fiduciary for breach of the duty of care is gross negligence, even if the transaction was a change-of-control transaction.”); accord McMillan v. Intercargo Corp.,

2026Mkts., LLC v. Jervis, 129 A.3d 816, 857 (Del. 2015). 41 breached their duty of care under the operative standard of review, a plaintiff still must prove gross negligence to recover money damages.72 Here, the business judgment rule presumptively applies, so the standard of review requires gross negligence.

2024Co., 154 A.3d 1124, 1127 (Del. 2017); Clark v. Clark, 47 A.3d 513, 517 (Del. 2012). 91 Chancery Opinion at 1235. 92 Id. at 1233–34. 20 The Court of Chancery held that “[v]iewed individually or collectively, these concerns are not sufficient to support equitable jurisdiction.”93 The court went on to reason that “[a]lthough it is true that the virus continues to circulate and mutate, the possibility of a future surge, much less one that will necessitate emergency measures on par with what the world experienced in the first half of 2020, is speculative at best.”94 The Court of Chancery found that

2024Co., 154 A.3d 1124, 1127 (Del. 2017); Clark v. Clark, 47 A.3d 513, 517 (Del. 2012). 91 Chancery Opinion at 1235. 92 Id. at 1233–34. 20 The Court of Chancery held that “[v]iewed individually or collectively, these concerns are not sufficient to support equitable jurisdiction.”93 The court went on to reason that “[a]lthough it is true that the virus continues to circulate and mutate, the possibility of a future surge, much less one that will necessitate emergency measures on par with what the world experienced in the first half of 2020, is speculative at best.”94 The Court of Chancery found that

2024Co., 154 A.3d 1124, 1127 (Del. 2017); Clark v. Clark, 47 A.3d 513, 517 (Del. 2012). 91 Chancery Opinion at 1235. 92 Id. at 1233–34. 20 The Court of Chancery held that “[v]iewed individually or collectively, these concerns are not sufficient to support equitable jurisdiction.”93 The court went on to reason that “[a]lthough it is true that the virus continues to circulate and mutate, the possibility of a future surge, much less one that will necessitate emergency measures on par with what the world experienced in the first half of 2020, is speculative at best.”94 The Court of Chancery found that

2023Id.; see also Restatement (Second) of Agency, § 229 cmt. a (“The limits of the scope of 134 employment are dependent upon the facts of the particular case.”). 135 Hecksher v. Fairwinds Baptist Church, Inc., 115 A.3d 1187, 1201 (Del. 2015) (quoting Doe v. State, 76 A.3d 774, 776 (Del. 2013) (quoting Restatement (Second) of Agency § 228)); see also Draper, 181 A.3d at 569 (adopting the Restatement (Second) of Agency’s respondeat superior framework as the operative test in Delaware).

2023Id.; see also Restatement (Second) of Agency, § 229 cmt. a (“The limits of the scope of 134 employment are dependent upon the facts of the particular case.”). 135 Hecksher v. Fairwinds Baptist Church, Inc., 115 A.3d 1187, 1201 (Del. 2015) (quoting Doe v. State, 76 A.3d 774, 776 (Del. 2013) (quoting Restatement (Second) of Agency § 228)); see also Draper, 181 A.3d at 569 (adopting the Restatement (Second) of Agency’s respondeat superior framework as the operative test in Delaware).

2022Framed generally, the operative test is whether the fiduciary has taken action that causes stockholders to act—whether by voting or making an investment decision like tendering shares—for some reason other than the merits of the proposed transaction.36 36 Id.; see Williams v. Geier, 671 A.2d 1368 , 1382–83 (Del. 1996) (“Wrongful coercion may exist where the board or some other party takes actions which have the effect of causing the stockholders to vote in favor of the proposed transaction for some reason other than the merits of that transaction.”); Weiss v. Samsonite Corp., 741 A.2d 366, 372

2022LLC, 238 A.2d 863, 871 (Del. 1968). 5 is “minimal” and “plaintiff friendly.”5 The operative test is one of reasonable conceivability, which asks whether there is a possibility of recovery.6 Summary Judgment Under Rule 56, “summary judgment should be entered when there is no dispute of material fact, and the moving party is entitled to judgment as a matter of law.”7 “The trial court shall examine the factual record and make reasonable inferences therefrom in the light most favorable to the nonmoving party to determine if there is any dispute of material fact.”8 Summary judgment should not be gr

2021The Delaware Supreme Court has recognized that the appraisal remedy can enable a petitioner to uncover fraud and wrongdoing that otherwise might not be identified, because “only shareholders pursuing discovery during an appraisal proceeding are likely to acquire the relevant information needed to pursue a fraud action if such information exists.” Cede & Co. v. Technicolor, Inc., 542 A.2d 1182, 1189 (Del. 1988); see also 2 Weinberger v. UOP, Inc., 457 A.2d 701, 714 (Del. 1983) (“The appraisal remedy . . . may not be adequate in certain cases, particularly where fraud, misrepresentation, self-de

2021Counts I, II, and X were also brought against J&J and the individual defendants. 63 Savor, Inc. v. FMR Corp., 812 A.2d 894, 896-97 (Del. 2002) (internal citation omitted). 12 “[T]he pleading standards for purposes of a Rule 12(b)(6) motion ‘are minimal,’” and the operative test is “one of ‘reasonable conceivability,’” which “asks whether there is a ‘possibility’ of recovery.”64 The individual defendants have also moved to dismiss the claims brought against them for lack of personal jurisdiction under Court of Chancery Rule 12(b)(2).