This Week in Chancery Court: Manila Casino Fight Goes to Trial

The sale of Manila’s largest luxury casino to a blank-check company will be the subject of a week-long trial in the Delaware Court of Chancery. The dispute involves a $275 million investment in Universal Entertainment Corp.’s 100-acre Okada Manila Resort & Casino, which is valued at $26 billion.

The court has a lot of activity on its post-holiday schedule this week:

Monday: 26 Capital Acquisition Corp. v. Tiger Resort Asia Ltd., Del. Ch., No. 2023-0128, trial begins 7/10/23.

At issue: Vice Chancellor J. Travis Laster fast-tracked the lawsuit brought by a blank-check affiliate of SpringOwl Asset Management LLC, which claims a unit of Universal Entertainment is trying to stall the transaction while it looks for a pretext to back out. Universal Entertainment recently regained control of the Okada Manila Resort & Casino after an unsuccessful coup attempt by co-founder Kazuo Okada, a Japanese billionaire facing criminal charges in multiple countries. The Japanese slot-machine maker has accused the special purpose acquisition company and its CEO of “a concerted and increasingly erratic campaign” to “pursue closing at all costs in pursuit of a windfall.”

Court action: Five-day trial in Wilmington, Del.

Manila Casino Fight Over SPAC Deal Fast-Tracked in Delaware (1)

Monday: Shareholder Representative Services LLC v. Alexion Pharma Inc., Del. Ch., No. 2020-1069, trial begins 7/10/23.

At issue: Vice Chancellor Morgan Zurn will preside over a trial over claims that Alexion Pharmaceuticals Inc. didn’t try hard enough to commercialize a drug originally developed by Syntimmune Inc. before the companies merged. The lawsuit was filed in December 2020 by Shareholder Representative Services LLC, which represented Syntimmune’s stock and option holders prior to the 2018 merger. Alexion argued it still had time to satisfy its obligation to use “commercially reasonable efforts” to advance the drug, but Zurn dismissed that motion in September 2021, finding the merger agreement’s commercially reasonable efforts clause “requires conduct,” not results.

Court action: Seven-day trial in Wilmington, Del.

Alexion Loses Bid to Dismiss Suit by Old Syntimmune Shareholders

Monday: Parker v. Avril, Del. Ch., No. 2020-0280, settlement hearing 7/10/23.

At issue: Vice Chancellor Paul Fioravanti Jr. will consider a proposed settlement to end litigation challenging B. Riley Financial Inc. and Vintage Capital Management LLC’s stewardship of energy company Babcock & Wilcox Enterprises Inc. If approved, the settlement would resolve claims that B. Riley and Vintage sought to lower the cost of acquiring a majority stake in Babcock—the successor to a company that contributed to the Manhattan Project—by driving it to the brink of bankruptcy.

Court action: Settlement hearing in Wilmington, Del.

B. Riley, Vintage Capital Pay $4.75 Million to End Babcock Case

Monday: Gilbert v. Unisys Corp., Del. Ch., No. 2023-0513, oral argument 7/10/23.

At issue: Two former Unisys Corp. executives facing a trade secrets lawsuit want the company to pay their legal fees associated with the litigation in the US District Court for the Eastern District of Pennsylvania. Leon Gilbert and Michael McGarvey, in a separate complaint filed in Chancery Court, said that when they demanded advancement for the Pennsylvania lawsuit, Unisys denied they had served as officers of Unisys or its Digital Workplace Solutions branch. Gilbert and McGarvey say they’ve incurred over $800,000 in legal expenses so far, according to court documents. The men left Unisys for its competitor, Atos SE, in early 2023.

Court action: Hearing on motion for judgment on the pleadings in Wilmington, Del.

Unisys Sues Atos Execs Over Trade Secret, Noncompete Violations

Wednesday: Teamsters Local 443 Health Servs. & Ins. Plan v. Chou, Del. Ch., No. 2019-0816, oral argument 7/12/23.

At issue: Vice Chancellor Sam Glasscock III ruled in 2020 that AmerisourceBergen Corp.'s board had to face claims that it looked the other way while a subsidiary relied on kickbacks and sham prescriptions to sell unsterile cancer drugs pooled from the overflow of pre-filled syringes. Since then, the case has been on hold while a special litigation committee formed by the board investigated the allegations. The committee has concluded the company’s board and officers met their oversight obligations, and it has asked the court to dismiss the lawsuit originally filed in 2019.

Court action: Hearing on the committee’s motion to dismiss in Georgetown, Del.

AmerisourceBergen Board to Face Investor Suit Over Syringe Scam

Thursday: Assad v. Botha, Del. Ch., No. 2022-0691, hearing 7/13/23.

At issue: An investor lawsuit claiming Unity Software Inc.'s board of keeping shareholders in the dark about ties between the banks advising the video game technology developer on a $4.4 billion acquisition and two major investment firms partly financing the transaction was dismissed as moot last September. Now Vice Chancellor Lori Will has to consider what to do about attorneys’ fees associated with the case. The attorneys for the investor who brought the lawsuit seek a total of $850,000.

Court action: Hearing on attorneys’ fees in Wilmington, Del.

Unity Software’s $1 Billion Silver Lake, Sequoia Deal Draws Suit

Thursday: Ryan v. Falcon, Del. Ch., No. 2023-0663, phone hearing 7/13/23.

At issue: Greenrose Holding Co. investors sued its board and principal creditors, Silver Point Capital LP affiliates, last month, seeking to stop them from foreclosing on the cannabis company’s assets over a $105 million loan. The investors seek a preliminary injunction, but first, Fioravanti has to decide whether to grant their motion to expedite the proceedings. The foreclosure agreement, the investors say, violates the company’s charter, which requires an application to a Delaware court of equity to sanction any “compromise or arrangement” between Greenrose and its creditors.

Court action: Hearing on motion to expedite.

Cannabis Investors Sue to Block Foreclosure by Silver Point