Page 14 - World Trade Center - 2023

THE COURT OF CHANCERY
Delaware’s Highly Respected Forum for Business Disputes
By Tina Irgang Leaderman
One of Delaware’s most significant assets for businesses is the Court of Chancery, a court tasked with the determination of disputes involving the internal affairs of companies.
While the Court of Chancery was established as far back as 1792 and modeled on similar courts in England, it has developed since then in a way that makes it fairly unique. “There are a few other states that have Courts of Chancery, and there has been a movement around the U.S. to have ‘business courts’ in other jurisdictions, but we are the court that has been focused on business issues for the
longest,” said Vice Chancellor J. Travis Laster. (The chief judge of the Court of Chancery is known as the Chancellor; the other judges are referred to as
Vice Chancellors.)
Delaware’s Court of Chancery
emerged as a major venue for business disputes in the 1980s. Primarily, the court deals with claims of breach
of fiduciary duty or claims seeking equitable relief. It is a court of equity, as opposed to a court of law. This means that there are no juries in the Court of Chancery, and the court does not award monetary damages.
One example of a case the court might handle is where “company A has agreed to buy company B, and one
of them does not want to go through with the transaction. Now, there is a dispute,” Laster said. The typical remedy the injured party looks for is an order compelling the other party to go through with the transaction.
A well-known example that was handled in the Court of Chancery is
the dispute between Twitter and Elon Musk, which surrounded Musk’s stated intent to back out of buying the social media platform. “Chancellor McCormick managed that case so it was headed to trial in four months,” Laster said. “She issued over 30 rulings on things like scheduling and discovery and the scope of the case. It is just not the type of thing that most courts are set up to do.”
Delaware’s Lawyers, Judges Offer Deep Business Expertise
By Tina Irgang Leaderman
It is a fact of life for companies that lawsuits or internal disputes are likely to arise sooner or later. When that happens, the Delaware bar offers a deep bench of experienced attorneys who know how to resolve legal matters as efficiently and quickly as possible.
“There is an established legal community here that is in partnership with everyone from the governor to the state legislature to the court system,” said Rafael X. Zahralddin, a partner in the Wilmington office of Lewis Brisbois. Zahralddin specializes in corporate and commercial litigation, insolvency, distressed M&A, compliance, entity formation, corporate government, regulatory actions, cyber law and
cross-border issues. He is also a member of the World Trade Center® Delaware board. “The legal system is one of the most important parts of Delaware’s economy, and we have really strived to ensure it is accessible and user-friendly for businesses.”
That user-friendly approach includes the “high standard of professionalism” to which Delaware judges are held, he said. “We get lawyers from all over the country who come in to access our courts and get a fair shake or get access to
a specialized court that deals just with business issues.”
(For more about Delaware’s specialized business court, the Court of Chancery, see above.)
The business expertise of the Delaware bench and bar is wide-ranging, taking in such key matters as bankruptcy and
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