This Week in Chancery Court: BofA, Skechers, Warner Bros. Deal

Bank of America Corp.‘s senior leaders want the Delaware Chancery Court to dismiss a lawsuit alleging they worsened the economic misery of the pandemic with “illegal, self-serving policies” enacted in response to a surge in fraud reports involving unemployment benefits offered through its prepaid debit cards.

Here’s a look at more on the Chancery Court and Delaware Supreme Court calendars this week:

Wednesday: Seafarers Pension Plan v. Moynihan, Del. Ch., No. 2023-0787, oral arguments 10/9/24.

At issue: A pension fund hasn’t shown that any board member benefited from the alleged misconduct, nor that any of them acted in bad faith or willfully ignored red flags, Bank of America argues in a brief supporting its motion to dismiss the case. The pension fund said in a brief that its complaint “strongly supports multiple reasonable inferences that all of the Defendants knowingly and purposefully violated their fiduciary duties” in connection with the disbursement of unemployment benefits through the bank’s prepaid debit cards.

Court action: A hearing on the motion to dismiss will be held in Wilmington, Del.

BofA Board Sued for Pandemic Freeze of Unemployment Benefits (1)

Wednesday: Conte v. Greenberg, Del., No. 76,2024, oral arguments 10/9/24.

At issue: The Delaware Supreme Court hears an appeal of a Chancery Court ruling that rejected allegations that the Skechers USA Inc. board made no effort to police excessive personal use of its two planes by CEO Robert Greenberg, his two sons, or the COO. The shareholder who brought the litigation argues there’s reason to doubt the independence of three board members. Skechers says in a brief that the shareholder failed to show that the board’s compensation committee “consciously disregarded red flags of wrongdoing.”

Court action: Oral arguments will be heard in Dover, Del.

Skechers CEO, Board Win Lawsuit Over Personal Use of Company Jet

Wednesday: LKQ Corp. v. Rutledge, Del., No. 110,2024, oral arguments 10/9/24.

At issue: The Delaware Supreme Court hears arguments at the request of the US Court of Appeals for the Seventh Circuit regarding non-compete agreements requiring forfeiture of financial payments when an ex-employee starts working for a competitor. The federal court wants to know how broadly to apply a Jan. 29 decision by the state’s highest court finding that six former Cantor Fitzgerald LP partners were properly denied $9 million in equity payments under forfeiture-for-competition provisions in their contracts.

Court action: Oral arguments will be heard in Dover, Del.

Delaware High Court Asked to Clarify Ruling on Noncompete Pacts

Thursday: In re Warner Bros. Discovery, Del. Ch., No. 2022-1114, settlement hearing 10/10/24.

At issue: Vice Chancellor J. Travis Laster must decide whether to approve a $125 million settlement for investors who challenged Discovery Inc.‘s merger with AT&T Inc.‘s WarnerMedia unit. The attorneys who reached the accord also seek $24.5 million to cover their legal fees. If approved by the court, the accord calls for a company owned by the billionaire Newhouse family—a major shareholder in the Discovery Channel’s operator—to pay $100 million of the settlement while ex-Discovery Chairman Robert Miron and his son must cover the remaining $25 million. The investors had claimed company insiders gained improper benefits worth over $1 billion in the 2022 merger.

Court action: A settlement hearing will be held in Wilmington, Del.

Discovery Holders’ Team Seeks $24.5 Million for Warner Bros Deal

Friday: In re EngageSmart Inc. S’holder Litig., Del. Ch., No. 2023-1093, hearing 10/11/24.

At issue: Pension funds have joined an investor’s challenge to EngageSmart Inc.'s planned $4 billion take-private sale to affiliates of Vista Equity Partners LLC. The deal is led by General Atlantic LP, the software company’s controlling stockholder. Laster will hear arguments on the applications to be lead plaintiff from the Genesee County Employees Retirement System and the Oklahoma Law Enforcement Retirement System.

Court action: A hearing to determine the leadership structure will be held in Wilmington, Del.

Vista’s $4 Billion EngageSmart Deal Hit With Court Challenge

Friday: Levinsohn v. The Arena Grp. Holdings Inc., Del. Ch., No. 2024-0777, oral arguments 10/11/24.

At issue: Arena Group Holdings Inc.'s former CEO seeks advancement of legal fees from the former publisher of the Sports Illustrated brand. Ross Levinsohn seeks summary judgment, saying in a brief that Arena advanced legal fees to defend him against litigation in New York, but it’s refused to pay the costs he’s incurred in separate lawsuits in Delaware and California. Arena has asked the court to dismiss Levinsohn’s claims, arguing in a brief that any dispute related to his employment agreement must be heard in a California court.

Court action: Oral arguments on the pending motions will be heard in Wilmington, Del.

Ex-Sports Illustrated Publisher Sued for Holding Brand ‘Hostage’