This Week in Chancery Court: Poison Pill Ruling, NuVasive

A ruling is expected in one of the many recent lawsuits asking Delaware’s Court of Chancery to reconsider how companies can deploy so-called “poison pills.”

Here’s a look at what else is coming up in Chancery Court and the Delaware Supreme Court:

Monday: Camac Fund LP v. Wagner, Del. Ch., No. 2023-0817, bench ruling 4/15/24.

At issue: Vice Chancellor Morgan T. Zurn will deliver a bench ruling on a motion to dismiss a lawsuit against the leaders and certain backers of Forte Biosciences Inc. Filed by an activist hedge fund seeking board seats, the litigation attacks an array of defensive measures, including a poison pill with a 10% ownership trigger. Camac Fund LP is pursuing the case only “to further its personal agenda of forcing a liquidation of Forte, an agenda Camac has been unable to advance through proper means outside of the courtroom,” the company and the individual defendants said in a brief supporting their motion to dismiss. Camac wants the case to proceed but also to be resolved before Forte’s 2024 annual meeting to clarify “the composition of the Board and the persons entitled to vote,” according to the fund’s reply brief.

Court action: Zurn will deliver her bench ruling via teleconference.

Poison Pills Targeting Activists Push Judges to Draw New Lines

Tuesday: NuVasive Inc. v. Miles, Del. Ch., No. 2017-0720, oral arguments 4/16/24.

At issue: Remaining claims in a long-running dispute between two spinal surgery device makers went to trial in October before Vice Chancellor Sam Glasscock III. The judge now will hear closing arguments in the case. Patrick Miles, the ex-president of NuVasive Inc., said in a post-trial brief that his former company has likened him to a Nazi collaborator when he “merely wanted to change jobs.” NuVasive launched the litigation “to tarnish Miles’s reputation and ruin him and his new employer financially,” Miles’s brief said.

Court action: Post-trial oral arguments will be heard in Georgetown, Del.

Alphatec Ducks Part of Suit Over NuVasive President Who Defected

Wednesday: Manheim v. Young Min Ban, Del., No. 377,2023, oral arguments 4/17/24.

At issue: The owner of a business that coordinates US infrastructure investments for foreign nationals seeking EB-5 visas is appealing a Chancery Court order that found him liable for $442,000 in compensation to a board member of an affiliated company. Joseph Manheim also argues the Chancery Court erred in dismissing his counterclaims alleging that a minority investor in Delaware Valley Regional Center LLC improperly accessed Manheim’s Dropbox files. The minority investor, Young Min Ban, argues Manheim waited too long after the Chancery Court’s ruling to file an appeal.

Court action: Oral arguments before the Supreme Court will be held in Dover, Del.

Investment-for-Visas Business Owner on the Hook for $2.4 Million

Wednesday: OptimisCorp v. Atkins, Del. Ch., No. 2020-0183, trial 4/17/24.

At issue: Zurn previously ruled that three former OptimisCorp board directors had no right to keep millions in damages they won on the physical therapy company’s behalf in arbitration proceedings against its former lawyer. She declined, however, to determine how much the ex-directors needed to return; that amount will be resolved in a three-day trial. The arbitration award totaled about $8.7 million.

Court action: Trial will be held in Wilmington, Del.

Therapy Chain Gets Win Against Ex-Directors Who Kept Legal Award

Wednesday: MKE Holdings Ltd. v. Schwartz, Del. Ch., No. 2018-0729, oral arguments 4/17/24.

At issue: Glasscock previously decided that Verdesian Life Sciences LLC’s board and the private equity firm it’s linked to couldn’t dodge allegations they duped two of Verdesian’s part-owners into investing millions. Verdesian’s former managers and its former private equity sponsor, Paine Schwartz Partners LLC, now seek summary judgment. They argue those claims were filed too long after a 2014 transaction being challenged, according to a brief. Two equity holders who filed the litigation argue discovery produced in the case is “replete with evidence of Defendants’ bad faith and fraudulent conduct,” according to their answering brief.

Court action: Oral arguments on the motion for summary judgment will be heard in Georgetown, Del.

Verdesian, Paine Schwartz Must Face Fraud Claims Over Merger