Over the last 21 years that I have been writing this blog I have often posted about an annual corporate law seminar in New Orleans called the Tulane Corporate Law Institute, that I am attending again this year. Started by the late great Delaware Supreme Court Justice Andrew G.T. Moore over 30 years ago, it now brings lawyers from around the country to discuss recent developments in corporate law and related legal updates.

Of course, my highlights from the seminar focus in this brief blog post on developments in Delaware law over the last year. Some of the speakers on this key topic include members of the Delaware Supreme Court as well as the Court of Chancery.

A panel of Delaware practitioners and the Chief Justice of the Delaware Supreme Court provided a presentation called Delaware Developments. Among other topics, they discussed the two recent Delaware Supreme Court decisions involving Elon Musk‘s compensation as well as a separate case involving claims against Tesla directors. One panelist predicted that if SB 21 had been in place, the compensation case against Musk would have been dismissed at the trial court level.

The moderator of this panel on Delaware Developments, Bill Lafferty of the Morris Nichols firm in Delaware, graciously allowed me to link in this blog post to the exemplary PowerPoint prepared for their panel, and a link to the cases they discussed. The written materials, available to attendees in electronic format, are a treasure trove of scholarly and practical data useful to practitioners.

In addition to the Musk and the Tesla decisions, the panel discussed recent decisions involving Brophy claims, Caremark claims, as well as the recent rulings in Brola/Credit Glory–which was “limited” in some sense by the later decision in the eXp case. They also addressed problems with use of AI in court filings with something less than due care.

Other key Delaware corporate decisions were discussed, some of which were included in my 21st Annual Review of Key Delaware Corporate and Commercial Decisions. Reasonable lawyers can debate which cases should be included in the list of top cases over the last year–beyond the obvious ones. I do not recall any suggestions for inclusion to the necessarily subjective list that I prepare each year.

Other panelists, including a member of the Court of Chancery, discussed shareholder activism. Another panel presentation on tomorrow’s schedule is titled “Hot Topics in M&A Practice”.

Over the last few years, compared to the last few decades, the trend of courts in many states has been to be less willing to enforce restrictive covenants based on closer scrutiny of nuances such as the legitimate business interest in the scope of the restrictions. This development is consistent with the increasing number of states that now prohibit these agreements by statute for public policy reasons.

The recent Chancery decision in Arxada Holdings NA Inc. v. Harvey, C.A. No. 2024-0771-JTL (Del. Ch. Jan. 28, 2026), involves a context where a Delaware court may be more willing to enforce the terms of a restrictive covenant: in connection with the sale of a business. This recent decision also discussed important aspects of the breach of the duty of loyalty and related damages available in connection with a faithless former CEO who was retained by the purchaser.

Background

  • This 99-page opinion includes many important facts that I will simply adumbrate for purposes of providing context for the key legal principles that I am merely highlighting in this short blog post. The case involved the founder and longtime CEO of a business who stayed on to help with the transition of the company after the sale.
  • After becoming unhappy with the way the new owners were managing his “baby”, and uncomfortable with not being in charge, the former CEO and his relatives who were also working at the company post-closing, used the assets and some of the other employees of the company to form a new competing business. The court found that this was not only a breach of the restrictive covenant but also a breach of the duty of loyalty.
  • Important facts about the restrictive covenant that was enforced are that it: (i) lasted for five years, and (ii) included all of the United States and Europe (where the company did business). It also included a provision not to poach employees of the former business, and not to solicit its employees. See Slip op. at 5 as well as 50 and 69 to 73 for the details.

Highlights

  • The court described the basic requirements to enforce a restrictive covenant, including: (i) Reasonable geographic scope and temporal duration; (ii) Advances the legitimate economic interests of the parties seeking enforcement, and (iii) Survives a balancing of the equities. Slip op. at 72-73. The court emphasized that “broader restrictions are permissible in a business-sale context.” See Slip op. at 73 and footnote 284.
  • Part of the court’s analysis was that it was reasonable to restrict giving material assistance to a competing business under the circumstances where the buyer paid $450 million to purchase a company that the CEO being restricted built from the ground up and ran for three decades.
  • The court provided additional reasoning for enforcing the covenants not to solicit employees and not to solicit customers of the business that was sold, all of which were breached. See Slip op. at 74–76.

Remedies for Breach

  • The court granted a permanent injunction after trial, to supplement the preliminary injunction initially granted, which extended the duration of the restrictive covenants for the entire five-year term to adjust for the period when the covenants were being breached. See Slip op. at 77 and footnote 297 (listing cases in support).
  • The court explained damages and other remedies available for the breach of the duty of loyalty that can include an award of attorneys’ fees, as well as disgorgement—even if no damages are proven. See Slip op. at 90-96 and footnotes 333-336.
  • The court recited a little-known fact: the elements for the breach of fiduciary duty do not strictly require the elements of a typical tort, to the extent that neither proximate cause nor damages must be established in order for relief to be granted. Slip op. at 80-85.
  • The court also noted that when examining claims for breach of fiduciary duty the court employs a “standard of review” instead of the “standard of conduct” that is used in a typical tort analysis.
  • The court also provided consequential insights into the fiduciary duty that is imposed on one’s role as an employee and as an agent. Slip op. at 85-89.

Bonus Supplement

  • Another recent Chancery decision upheld a five-year non-compete that also included the entire United States and other countries where an employer did business, in connection with the sale of a company. See Derge v. D&H United Fueling Solutions, Inc., C.A. No. 2025-0087-BWD (Del. Ch. Dec. 8, 2025).

The recent Chancery decision in Calumet Capital Partners LLC v. Victory Park Capital Advisors, LLC, C.A. No. 2025-0036-JTL (Del. Ch. Jan. 29, 2026), addressed various issues in a motion to dismiss claims involving poaching of employees and disloyalty among business partners.

Although there is much to commend this 74-page decision, I will limit my highlights to a few aspects of the opinion that are especially noteworthy.

Highlights

  • This decision is must-reading for anyone who wants to know the latest nuances and the latest developments under Delaware law regarding requirements for establishing an aiding and abetting claim for breach of fiduciary duty. See Slip op. at 35 to 43.
  • This opinion features a scholarly deep dive into the nuances of the recent Delaware Supreme Court decision in Columbia Pipeline, highlighted on these pages, and provides an analysis of the high court’s doctrinal underpinning of its recent new articulation of the requirements for aiding and abetting claims. See footnote 84 and accompanying text (revealing an analytical tension between the high court’s Columbia Pipeline reasoning and the decision of the Court of Chancery that it reversed. See also footnote 81 (noting that the Supreme Court decision in Columbia Pipeline “silently” overruled the 2015 Supreme Court decision in RBC Capital Markets case.)
  • One reason why this decision is must-reading for anyone who wants to understand the latest iteration of Delaware law on an aiding and abetting claims is because (1) it addresses the new and nuanced requirements of an aiding and abetting claim; (2) it provides an explanation, clarification, and critique of the Supreme Court’s Columbia Pipeline decision, and (3) it describes how claims for aiding and abetting apply to an affiliate of a culpable fiduciary—as compared to a third-party acquirer who knowingly participates in the breach of fiduciary duty by a sell-side director.
  • The court also provides a helpful comparison of a claim for civil conspiracy versus a claim for aiding and abetting. See Slip op. at 43.

A recent decision of a Magistrate in Chancery is useful for its application of the latest changes to DGCL Section 220 to the extent it applied the new version of the statute to a demand for books and records for the purpose of valuation. The decision in Trematerra v. The Affinity Project Inc., C.A. No. 2025-0596-DH, Final Post-Trial Report (Del. Ch. Dec. 8, 2025), made the following noteworthy determinations about new aspects of the statute providing stockholders with more limited rights to demand books and records of a corporation:

  • Identifying specific corporate documents that were determined to satisfy the purpose of performing a valuation, pursuant to the new narrow restrictions for documents available under Section 220(a)(1)(a).
  • Specifying which additional documents for valuation purposes would be ordered based on the expanded (but still limited) tranche of eligible documents under the new sub-section (g) of Section 220(a)(1) when certain conditions are met that might make a stockholder entitled to additional documents beyond the more narrow enumerated list in Section 220(a)(1)(a).
  • The post-trial report of the Magistrate in this case also provides useful definitions of the “compelling need” test under new sub-section (g)
  • The court also provides a helpful explanation of what is required to meet the new “clear and convincing evidence” standard under new sub-section (g) that must be demonstrated to determine what documents are “necessary and essential” for, in this case, the purpose of valuation. See Order at page 30 and footnote 114. (The footnote cites to the caselaw that applies, by analogy, the compelling need standard used in connection with seeking the production of otherwise protected attorney work-product to assess materials not otherwise discoverable.)

A recent Order from the Delaware Court of Chancery granted a motion to dismiss claims against a law firm for breach of fiduciary duty. In connection with its decision, the court provided noteworthy clarification and guidance about the scope of representation of corporate counsel. In Hecate Holdings LLC v. Repsol Renewables North America, Inc., C.A. No. 2024-0928-KSJM, Order (Del. Ch. Jan. 12, 2026), the court discussed the nuances of a law firm’s relationship between a corporation and its various constituencies.

Background

This case involved counterclaims by the minority shareholder of a corporation against a law firm for the company. Breach of fiduciary duty was alleged. The court explained that there is no fiduciary duty created between a law firm and the minority shareholder of a corporation simply based on the law firm’s representation of the corporation.

Court’s Reasoning

The court instructed that the general rule continues to be that: representation of a company generally does not include the representation of the various constituencies of a corporation. This principle can be found in Rule of Professional Conduct 1.13. See Order at 4 and footnote 14.

The court emphasized the important distinction between: (i) the information-gathering right of a director designated by a stockholder that is not impeded because a director designee might be considered a “joint client” of corporate counsel; and (ii) the stockholder who designated that director—for the purpose of addressing the scope of the attorney/client privilege of a corporation. See footnotes 10, 12, and 13 and related text.

Volume 2, Edition 2 of the National Law Review‘s Delaware Corporate and Commercial Law Monitor has been published. I’m the Editor-in-Chief. It is published monthly and emailed to a select few from the mailing lists the NLR has for their 25 other newsletters, as well as the existing subscribers of this blog who read these pages from all 50 states and over 90 countries. To be clear: this blog will continue unabated.

Frank Reynolds, who has been covering Delaware corporate decisions for various national publications for over 40 years, prepared this article.

 A  Delaware Supreme Court panel recently upheld the Court of Chancery’s decision that breach-of-good-faith and conflict-of-interest claims that arose from a post-closing merger earnout dispute after the acquisition of online video game developer Kixeye were properly left to an arbitrator to resolve as part of the merger pact’s alternate dispute resolution provision in Fortis  Advisors LLC v. Stillfront Midco AB, C.A. No. 2021-0870 ( Del. Feb. 13, 2026).

Justice Gary Traynor, on behalf a three-justice panel, rejected the seller’s appeal of Chancery’s approval decision, finding that the merger parties had agreed to submit earnout calculation disputes to arbitration and viewed the bad faith and conflict claims essentially as contesting the accuracy of the deal’s earnout determination.  The panel also found no error in Chancery’s decision to take no action regarding an allegedly undisclosed relationship between the arbitrator’s firm and the buyer’s counsel.

The decision should be of interest to merger and acquisition specialists because Delaware’s Supreme and Chancery Courts appeared to concur on how broadly  a common ADR provision may be applied in claims that could affect post-sale earnout calculations,

Background

Under the merger agreement, Stillfront agreed to pay a base price of $90,000,000 and provided for an earnout bonus if Kixeye’s “Adjusted EBITDA” for the year ending December 31, 2019, exceeded $15,000,000.  According to court records, the maximum possible earnout amount was $30,000,000.  The parties consented to “the exclusive jurisdiction of any court of the State of Delaware.”   But the merger parties also included a contractual ADR provision that provided an expedited mechanism for the resolution of a dispute over the calculation of the earnout amount.

On October 8, 2021, Fortis filed suit against Stillfront in the Court of Chancery, alleging two breach of contract claims and, in the alternative, a claim for breach of the implied covenant of good faith and fair dealing. In one count, Fortisalleged that Stillfront violated the operational covenants by slashing Kixeye’s marketing expenditures in bad faith.

Fortis alleged that Stillfront “unilaterally and retroactively readjusted”Kixeye’s operating expenses for the Pre-Merger 2019 Period to amounts materially in excess of the average monthly amounts presented on Schedule 1.1(a) of the Merger Agreement.

Chancery’s decision and the appeal

Because the Court of Chancery’s order compelling arbitration and dismissing Fortis’s complaint hinged upon its interpretation of § 2.14 of the merger agreement, our review of that order is de novo,” Justice Traynor wrote.  “The Court of Chancery denied vacatur of the arbitration award under the narrow evident partiality standard….however, we review that determination de novo.”

Justice Traynor noted that, “In its lead argument on appeal, Fortis contends that the Court of Chancery erred by treating § 2.14’s ADR mechanism as an arbitration clause. According to Fortis, the court should have instead viewed § 2.14 as calling for a “narrow accounting-based expert determination” and thus not subject to the principles that govern arbitration.”

But he pointed out that, ‘’ In pressing this argument, Fortis relies heavily on three decisions—one from our Court, another from the Court of Chancery, and a third from the Third Circuit Court of Appeals—each of which addresses how courts should classify contractual ADR provisions similar to § 2.14 and how that classification affects the decision-making process” … and that all three “were all announced in the year following the court’s granting of Stillfront’s motion to compel arbitration. Without the benefit of the analyses found in these opinions, Fortis framed—and the court resolved—the questions regarding the scope of § 2.14 under the assumption that it was an arbitration provision and not one calling for an expert determination.”

Justice Traynor concluded that it was important that during oral argument on Stillfront’s motion to compel arbitration in the Court of Chancery, Fortis’s counsel repeatedly referred to § 2.14 as an arbitration provision and even asked himself rhetorically whether “the parties agree[d] to arbitrate something?” His answer: “No dispute here on that issue.”

Frank Reynolds, who has been covering Delaware corporate decisions for various national publications for over 40 years, prepared this article.

The full Delaware Supreme Court recently issued a guidepost decision that found a challenge by Moelis & Company investors of the investment bank’s 2014 stockholder agreement—after a delay of nine years—was barred by a laches defense because the pact’s provisions were “voidable” rather than “void” under Delaware corporate law in Moelis & Company v. West Palm Beach Firefighters Pension Fund, et. al., No. 340, 2024 (Del. Jan. 23, 2026).

The unanimous ruling, written by Justice Gary Traynor, reversed a Chancery ruling that the shareholders’ delay was not fatal to the action because the agreement clearly interfered with the corporate board’s right to manage the business and affairs of the corporation in violation of the requirements of 8 Del. C. § 141(a). 

Suit 6 yrs. Over\due?

The high court’s opinion found that everything the plaintiff needed to file its claim was available in 2014. Because the complaint was only voidable, the challenge to the validity of the agreement was time-barred expressly by 10 Del. C. § 8106’s three-year statute of limitations or by analogy under the doctrine of laches.

Background

According to the court record, Kenneth Moelis, a veteran investment banker, founded Moelis & Company, an independent investment bank, that was immediately successful in securing and performing advisory work on high-profile M&A transactions and soon  expanded globally.  Kenneth Moelis had served as Moelis & Company’s CEO and chaired its board of directors since its founding.  In 2014, Moelis & Company announced an initial public offering of its Class A common stock and changed its corporate structure in preparation for the IPO.

That change in structure was viewed by an investor as inequitable to stockholders in the two-part company. In March 2023, the West Palm Beach Firefighters’ Pension Fund, a Class A stockholder since November 2014, filed this lawsuit against Moelis claiming that the provisions of the stockholders’ agreement were facially invalid because they violate § 141 of the Delaware General Corporation Law. The complaint requested a declaratory judgment that these provisions are invalid and unenforceable, and both sides sought summary judgment.

The Court of Chancery concluded that the challenged provisions facially violated § 141(a), declared them void and unenforceable—and later awarded the plaintiff $6 million in attorney fees.

The appeal

 On appeal, Moelis argued that the Court of Chancery’s conclusion that the plaintiff’s claims were not time-barred by laches was erroneous as was its determination that the challenged provisions are facially invalid.   Since they agreed with Moelis’ timeliness argument, the justices found no need to address the other issue.  Justice Traynor noted that three months after Chancery issued its opinion, legislation was introduced in the Delaware General Assembly to “mitigate—if not annul—” the effects of the court’s opinion by amending Section 122 of the Delaware General Corporation law.   “The original synopsis of the bill left little doubt that it was drafted and passed in response to the Court of Chancery’s decision,” the Justice wrote.

“The limitations of actions applicable in a court of law are not controlling in equity,” he explained.  But “a court of equity moves upon considerations of conscience, good faith, and reasonable diligence, so, when a plaintiff advances an equitable claim or a legal claim seeking equitable relief, the Court of Chancery will instead apply the doctrine of laches to determine the timeliness of the claim.”

Void v. voidable

In differentiating between void and voidable, the high court said, “Because all the disputed actions taken at the meeting could have been  accomplished lawfully by the defendants had they done them in the proper manner—that is, with proper notice—the actions were deemed voidable, not void, and therefore subject to the equitable defenses of laches and acquiescence.”

Therefore, the way to distinguish void from voidable, “ is not whether the method actually chosen by the Moelis board to implement the challenged provisions was valid under the DGCL,” Justice Traynor  wrote.  “Instead, we evaluate whether the plaintiff has demonstrated that there are no lawful means by which Moelis could accomplish its desired governance arrangements, making the challenged provisions susceptible to cure and therefore voidable.”  However, the Court of Chancery never made that evaluation or consulted the major opinions that address the issue, he said.

Conclusion

Moreover, it was the plaintiff’s burden to demonstrate that the challenged provisions were void, but it never made more than a “cursory” effort, the Justice said.

“Our law  does not permit the maintenance of lawsuits where the plaintiff has no excuse for delay merely because the status quo of the parties or property involved has stayed the same and an adequate evidentiary record is available,” the high court concluded.

This week, Volume 2, Edition 1 of the National Law Review‘s Delaware Corporate and Commercial Law Monitor was published, beginning its second year. I’m the Editor-in-Chief. It is published monthly and emailed to a select few from the mailing lists the NLR has for their 25 other newsletters, as well as the existing subscribers of this blog who read these pages from all 50 states and over 90 countries. To be clear: this blog will continue unabated.

The 21st edition of Francis Pileggi’s annual list of key corporate and commercial decisions of the Delaware Supreme Court and the Delaware Court of Chancery has been published by The National Law Review. This year’s list does not attempt to include all important decisions of those courts that were rendered in 2025, and eschews some of the cases already extensively discussed by the mainstream press or legal trade publications. This list highlights 23 of the notable decisions that should be of widespread interest to those involved in corporate and commercial litigation or those who follow the latest developments in this area of Delaware law.

The National Law Review published this year’s annual review last week at the following link and we appreciate them making it available to all our readers: 21st Annual Review of Key Delaware Corporate & Commercial Decisions.