Courts and ADR

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In Ezrasons, Inc. v. Rudd, 2025 NY Slip Op. 03008, 2025 N.Y. LEXIS 717 (N.Y. May 20, 2025), the New York Court of Appeals reaffirmed the fundamental and controlling nature of the internal affairs doctrine as it relates to the choice of law regarding corporate governance disputes. Specifically, the Court held that in enacting Sections 626(a) and 1319(a)(2) of New York’s Business Corporation Law (“BCL”), the New York legislature did not clearly manifest an intent to displace the long-settled doctrine as it applies to shareholder derivative standing with respect to corporations formed under the laws of another jurisdiction. This decision provides further assurance to foreign corporations that New York courts will enforce the substantive law of the place of incorporation for litigation involving the corporation’s internal affairs.Continue Reading New York Court of Appeals Reaffirms the Internal Affairs Doctrine for Foreign Corporations

In Briskin v. Shopify, Inc., No. 22-15815, 2025 U.S. App. LEXIS 9410 (9th Cir. Apr. 21, 2025), the United States Court of Appeals for the Ninth Circuit, sitting en banc, held that the Canada-based company Shopify, Inc. (“Shopify”), which provides a web-based payment processing platform to online merchants across the United States (and the world), is subject to specific personal jurisdiction in California based solely upon Shopify’s extraction, maintenance and commercial distribution of personal data from consumers it knew to be located in California. In making this ruling, the Ninth Circuit became the first Circuit in the nation to address this type of personal jurisdiction question involving a global online payment platform.Continue Reading Ninth Circuit En Banc Reverses Panel Decision and Holds Non-Resident Corporation Providing Web-Based Payment Processing Platform Is Subject to Specific Personal Jurisdiction in California

Cross-border M&A deals frequently present unique issues and strategic closing considerations for transaction parties to navigate—including national security approvals. In a recent Delaware Chancery Court decision, these issues intersected when the court was forced to weigh national security-related approval conditions imposed by the Committee on Foreign Investment in the United States (“CFIUS”) against the buyer’s stringent contractual closing obligations.Continue Reading Closing Time: Hell, High Water, and Insights from the Delaware Chancery Court Decision in Desktop Metal v. Nano Dimension

On March 25, 2025, the governor of Delaware signed into law Senate Bill 21, over much opposition from the plaintiffs’ bar and some academics. The bill, which amends Sections 144 and Section 220 of the Delaware General Corporation Law, 8 Del. C. (the “DGCL”), seeks to provide clarity for transactional planners in conflicted and controller transactions, and seeks to limit the reach of Section 220 books and records demands. These amendments significantly alter the controller transaction and books and records landscape.Continue Reading Delaware Enacts Sweeping Changes to the Delaware General Corporation Law

As previously reported (here and here), some Delaware courts have recently declined to “blue pencil,” i.e., modify and narrow overbroad restrictive covenants. Instead, they have stricken in their entirety covenants deemed overbroad and declined to enforce them. On December 10, 2024, in Sunder Energy, LLC v. Tyler Jackson, et al., the Delaware Supreme Court affirmed that Delaware courts have the discretion to decline to blue pencil overbroad restrictive covenants, even if the defendant’s conduct would violate a more narrowly circumscribed covenant. Continue Reading Delaware Supreme Court Declines to Enforce Noncompete Against Company Founder Who Joined Competitor

On December 3, 2024, a Federal District Court in the Eastern District of Texas in the case of Texas Top Cop Shop v. Garland placed a nationwide injunction on the Corporate Transparency Act (the “CTA”), a law regulating business entities that became effective on January 1, 2024. Pursuant to the ruling, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) released a statement confirming that reporting companies are not required to comply with the CTA while the preliminary injunction remains in effect.Continue Reading Texas Federal District Court Issues Preliminary Injunction on CTA Nationwide; Department of Justice Appeals

In a significant early ruling, one of Texas’s newly established Business Courts addressed a key procedural question: whether pre-existing cases may be removed to the specialized forum. Judge Bill Whitehill’s October 30, 2024 decision in Energy Transfer LP v. Culberson Midstream LLC held that, regardless of subject matter, cases filed before September 1, 2024 must remain in their original courts.Continue Reading No Move to Greener Pastures: Texas Business Court Holds Parties May Not Remove Pre-September 1, 2024 Cases to New Court System

In Samuelian v. Life Generations Healthcare, LLC, — Cal. App. 5th —, 2024 WL 3878448 (Cal. App. Aug. 20, 2024), the California Court of Appeal answered two long outstanding questions of California law concerning the enforceability of noncompetition agreements in the context of the sale of a business:Continue Reading California Court of Appeal Rules That Partial Sale of Business Can Bind Seller-Owner to a Noncompetition Agreement

In Segway Inc. v. Hong Cai, 2023 Del. Ch. LEXIS 643 (Del. Ch. Dec. 14, 2023), the Delaware Court of Chancery (Will, V.C.) dismissed a claim for breach of fiduciary duty brought by Segway Inc. (the “Company”) against its former President and Vice President of Finance (the “Officer”). The Company framed its claim as a claim for breach of the duty of oversight, commonly known as a Caremark claim (from the landmark case In re Caremark Int’l Inc. Derivative Litigation, 698 A.2d 959 (Del. Ch. 1996)). Continue Reading The Delaware Court of Chancery Confirms that Duty of Oversight Claims Against Corporate Officers Are Subject to the Same High Pleading Standards Applicable to Duty of Oversight Claims Against Corporate Directors

In Briskin v. Shopify, Inc., No. 22-15815, 2023 WL 8225346 (9th Cir. Nov. 28, 2023), the United States Court of Appeals for the Ninth Circuit held that the Canada-based company Shopify, Inc. (“Shopify”), which provides a web-based payment processing platform to online merchants across the United States (and the world), is not subject to specific personal jurisdiction in California courts under California data privacy laws based solely upon Shopify’s collection, retention and use of customer data from California residents. In making this ruling, the Ninth Circuit became the first Circuit in the nation to address this type of personal jurisdiction question involving a global online payment platform.Continue Reading In a Case of First Impression, Ninth Circuit Addresses Personal Jurisdiction Issues Involving Non-Resident Corporation Providing a Web-Based Payment Processing Platform

Acquisition agreements in M&A transactions frequently include provision for payment to be made at closing based on estimates of certain financial metrics that are later subject to a purchase price adjustment based on a final determination (referred to as a “true-up”) within a few months following closing. These metrics may include a target’s cash, debt, unpaid transaction expenses and working capital (excluding cash), and sometimes others. The definitions that correspond to these items, and what particular items are included or excluded from each, are often the product of significant negotiation, as the final purchase price can move materially up or down based on their final determination. The process of finally determining the adjustment amount following the closing can also reveal differences in the buyer’s and seller’s interpretation of accounting principles applicable to the purchase price adjustment calculation, or how those principles apply to the target’s financial statements. These differences can become a source of post-closing conflict between buyer and seller, at a time when the parties are working through transitional issues, and when the sellers may have ongoing involvement in the business. Parties will want to resolve these disputes quickly and in a cost-effective manner. To accomplish these objectives, often the purchase agreement will require that the parties submit unresolved issues to an independent accountant for final resolution. A key consideration in such referral will be the role that the accountant will play in resolving the dispute. Will the accountant act as an arbitrator or as an expert? This is an important distinction that deserves careful consideration by both sides. By engaging an accountant to act as an expert and not an arbitrator, the parties limit the scope of the accountant’s review and avoid the formalities of an arbitration.Continue Reading Expert or Arbitrator? Resolving Purchase Price Adjustment Disputes