On May 5, 2016, in In the Matter of Kenneth Cole Productions, Inc., Shareholder Litigation, No. 54, 2016 WL 2350133 (N.Y. May 5, 2016), the New York Court of Appeals adopted Delaware’s standard of review of shareholder class actions challenging going-private mergers.  Specifically, New York courts are now required to evaluate board approval of such mergers under the deferential “business judgment rule”—provided certain shareholder-protective conditions are present. 

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In Peter Brinckerhoff v. Enbridge Energy Company, Inc., et al., C.A. No. 11314-VCS, memo. op. (Del. Ch. Apr. 29, 2016), newly appointed Vice Chancellor Slights of the Delaware Chancery Court dismissed class and derivative claims brought by an investor in a master limited partnership, Enbridge Energy Partners, L.P. (the “MLP”), against the general partner, Enbridge Energy Company, Inc., and its controlling parent (together, “Enbridge”), and Enbridge’s affiliates and directors.  This opinion is the latest in a series of Delaware court decisions reinforcing that, under Delaware law, “a limited partnership agreement may eliminate the fiduciary duties owed by the general partner to the partnership and its limited partners in favor of” specifically delineated contractual obligations. 

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On May 5, 2016, the New York Court of Appeals ruled that courts should apply the business judgment rule in shareholder lawsuits challenging going-private mergers, as long as shareholders were adequately protected—a decision that expressly follows the approach of the Delaware Supreme Court in its seminal case, Kahn et al. v. M&F Worldwide, 88 A.3d 635 (Del. 2014) (“MFW”). In the Matter of Kenneth Cole Productions Inc. S’holder Litig., No. 54, 2016 WL 2350133 (N.Y. May 5, 2016) (“KCP”). KCP marks the first time that New York’s highest court determined that the business judgment rule should apply in such situations. 

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A unanimous Delaware Supreme Court criticizes directors’ use of deceptive “Pearl Harbor-like” tactics against another director, even in the name of protecting the company from perceived misconduct.   OptimisCorp v. Waite, No. 523, 2015 (Apr. 25, 2016).

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The Delaware Supreme Court is the latest court to weigh in on the increasingly contentious question of whether a foreign corporation’s compliance with a state’s statutory registration requirements amounts to a broad consent to general personal jurisdiction within that state.  Writing for the majority in a rare 4-1 split decision, Chief Justice Strine held that it would be “unacceptably grasping” in today’s economy to require foreign corporations to acquiesce to Delaware’s exercise of general jurisdiction as a price of doing business in the state.  In so ruling, the Court partially overruled its own decision in Sternberg v. O’Neil, 550 A.2d 1105 (Del. 1988), which held that registering to do business in the state pursuant to 8 Del. C. § 371 and designating an agent for service of process pursuant to 8 Del. C. § 376 amounted to “actual consent” to Delaware’s exercise of general jurisdiction.

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The newest Vice Chancellor on the Chancery Court, Vice Chancellor Joseph R. Slights, will be formally installed by public investiture on Friday, May 13, 2016 and recently tackled the rarely discussed “pecuniary duty” in denying from the bench defendants’ motion to dismiss in Herbert Caskey, MD v. OpKo Health Inc. 

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