Delaware Business Court Insider

Web3 litigation is a regulatory waiting game in Delaware

Delaware Business Court Insider, Delaware Law Weekly

Web3 has raised countless questions about corporate entity structures and securities regulations, but attorneys specializing in the area don’t foresee most of them being answered in a Delaware court, at least not immediately.

That doesn’t mean those interested in Delaware corporate law shouldn’t pay attention to how those questions are resolved in other courts or by regulatory changes, with some cases involving decentralized autonomous organizations likely to show up in the Court of Chancery at some point.

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Great exSPACtations: Practitioners say Delaware will set tone for new post-merger litigation

Delaware Business Court Insider, Delaware Law Weekly

Nearly as fast as SPACs themselves rose in popularity, shareholders have started filing litigation against the acquisition companies that have closed their deals.

Aside from securities cases filed in federal courts, Delaware’s Court of Chancery is the primary venue where corporate litigators are watching and waiting to see how the increasingly common companies are treated compared to others involved in M&A and breach of fiduciary duty litigation, with just a handful of cases expected to lay out the scope of SPAC shareholders’ and directors’ rights and duties, as well as how, or if, shareholders will be able to make similar claims in the future.

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New demand futility test expected to streamline litigation in derivative lawsuits

Delaware Business Court Insider

The Delaware Supreme Court’s decision last week to do away with a two-test system will likely lighten litigators’ workload across the board in derivative cases, experts say.

The opinion Justice Tamika Montgomery-Reeves wrote in a Facebook shareholders case replacing the separate but long-muddled Aronson and Rales tests with a single three-step test that combines the two is expected not to change the results of testing for demand futility, but to drastically simplify and make consistent the path to those results.

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Robinhood isn’t expected to be sued In Delaware court soon, if ever

Delaware Business Court Insider

In the week after Robinhood restricted trading on GameStop and other stocks, outcry from the app’s users and the public at large has unfolded into more than 50 lawsuits nationwide.

None of those cases have been filed in Delaware, where the California-based company is incorporated. And that may not change, at least not in the immediate future.

Shareholders for Robinhood, which is among the many companies that are incorporated in Delaware but aren’t headquartered there or don’t do the majority of their business within state lines, could potentially file a case against the company in Delaware. But Robinhood’s customers, not shareholders, are currently the ones upset with the company to the point of taking legal action.

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California judge says right to jury trial overrides agreement to litigate in Delaware

Delaware Business Court Insider

A California plaintiff can’t be made to take his case to the Delaware Court of Chancery, a Los Angeles County Superior Court judge has ruled in what that plaintiff’s attorney says is likely the first decision to address the issue.

The trial judge’s ruling in the case filed by William West against Access Control Related Enterprises LLC, issued by Judge David J. Cowan of the Los Angeles County Superior Court on July 29, stated that enforcing a forum selection clause requiring a California resident to pursue a case in the Court of Chancery violates Californians’ constitutional right to a jury trial, unless a defendant can prove doing so would not infringe on that right.

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How Delaware courts have kept running during COVID-19

Delaware Business Court Insider

More than three months since Delaware’s judiciary first declared a state of emergency, state courts have reported there likely won’t be much of a case load to catch up on as courthouse activity ramps back up.

Since courtrooms were first closed to the public March 23 in response to the COVID-19 pandemic, the judiciary and attorneys have been using remote methods to keep cases moving, many of which are being carried into the courts’ reopening stages.

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