Delaware Case Law Library

Delaware's reputation rests less on its statutes than on the courts that interpret them. Decades of Court of Chancery and Supreme Court rulings define how fiduciary duties, LLC disputes, mergers, and member rights really work in practice. This library collects the landmark cases every founder benefits from knowing, each summarized with its holding and why it matters, so you can see how the law protects you long before any disagreement reaches a courtroom.

This library collects the landmark Delaware corporate and LLC decisions that shape how US business entities are governed. Each case has its own plain-English summary with the facts, the holding, and what it means for Delaware LLC founders. Browse by topic below, or jump to the full A–Z list.

Fiduciary duty cases

How directors, managers, and controlling members must act — the duties of care and loyalty, the business judgment rule, and the entire fairness standard.

• Auriga v. Gatz (2012) — Affirmed liability on contract grounds while expressly rejecting the Chancery's broader pronouncement that default fiduciary duties apply to LLC managers.
• Blasius v. Atlas (1988) — Established that board action primarily intended to interfere with the shareholder franchise requires a 'compelling justification.'
• Brehm v. Eisner (2000) — Refined business judgment rule pleading standards; shareholders must allege particularized facts to overcome the rule.
• Corwin v. KKR (2015) — Established 'Corwin cleansing': fully informed, uncoerced shareholder vote insulates transaction from fiduciary-duty challenge.
• Dieckman v. Regency (2017) — Addressed implied covenant of good faith and fair dealing in LP/LLC contexts.
• Disney (Chancery 2003) (2003) — Early Chancery decision on Disney/Ovitz severance case.
• Disney (Supreme) (2006) — Affirmed Chancery's high bar for bad-faith fiduciary claims.
• eBay v. Newmark (2010) — Held that directors have a duty to promote shareholder value, not non-shareholder constituencies, for for-profit corporations.
• Emerald Partners v. Berlin (2001) — Clarified the interaction between § 102(b)(7) exculpation provisions and the entire fairness standard.
• Gheewalla (2007) — Clarified that creditor fiduciary-duty claims require actual insolvency.
• In re Caremark (1996) — Established directors' duty to maintain reasonable oversight systems; failure to do so can breach the duty of good faith.
• In re Pure Resources (2002) — Tender offer freeze-out procedural standards.
• In re Trados (2013) — Addressed VC director duties when liquidation preference exceeds expected returns.
• Kahn v. Lynch (1994) — Clarified procedural protections needed to shift burden of proof in controller transactions.
• Kahn v. Tremont (1997) — Established entire fairness review for controlling-shareholder transactions.
• MFW (2014) — Established the 'MFW framework': controller squeeze-outs with both special committee and majority-of-minority vote qualify for business judgment rule review.
• Sanchez (2015) — Director independence standards.
• Smith v. Van Gorkom (1985) — Established that directors must inform themselves before approving major corporate decisions; gross negligence in decision-making breaches the duty of care.
• Stone v. Ritter (2006) — Consolidated Caremark oversight liability under the duty of loyalty rather than duty of care.
• Weinberger v. UOP (1983) — Established entire fairness doctrine for controlling-shareholder squeeze-out transactions.

Merger and acquisition cases

Change-of-control duties, deal protections, and the Revlon and Unocal lines that govern how boards run a sale.

• Carmody v. Toll Brothers (1998) — Invalidated 'dead-hand' poison pill provisions.
• Cox Communications (2005) — Going-private transaction process review.
• In re Cumulus (2008) — Addressed sale-process procedures and Revlon duties.
• In re Dollar Thrifty (2010) — Single-bidder sale-process review.
• In re Orchid Cellmark (2011) — Sale-process review in life-sciences M&A.
• Lyondell v. Ryan (2009) — Reinforced the high bar for proving bad faith in sale-process Revlon claims.
• Paramount v. QVC (1994) — Clarified when Revlon duties trigger: any transaction that results in a change of control triggers Revlon, regardless of consideration form.
• Paramount v. Time (1989) — Held that a board can resist a hostile bid to pursue a strategic transaction if it does not constitute a sale of control.
• Revlon v. MacAndrews (1986) — Established 'Revlon duties': when a sale of the company becomes inevitable, the board's duty shifts to maximizing immediate shareholder value.
• Unocal v. Mesa (1985) — Established the two-prong 'Unocal test' for evaluating board defensive measures against takeover threats.

LLC member dispute cases

Operating-agreement interpretation, member and manager conflicts, and dissolution of closely held entities.

• Elf Atochem v. Jaffari (1999) — Established the broad enforceability of arbitration clauses in LLC Operating Agreements.
• Fisk Ventures v. Segal (2008) — Applied § 18-802 'not reasonably practicable' standard to grant judicial dissolution of a deadlocked LLC.
• Haley v. Talcott (2004) — Established standards for judicial dissolution of a deadlocked two-member LLC.
• In re Trulia (2016) — Reformed disclosure-only settlement practice in M&A litigation.
• Matsushita v. Epstein (1996) — Class-action settlement preclusive effect.
• Moelis decision (2024) — Invalidated certain stockholder agreement provisions that granted excessive control to a founder, triggering Delaware legislative response.
• Novell v. Microsoft (2002) — Antitrust litigation between tech companies.
• Saba v. BlackRock (2023) — Addressed control-share statute applicability to closed-end funds.
• Salman (2016) — Insider-trading liability for tippee gifts.
• Stoneridge (2008) — Scope of secondary-actor liability under federal securities law.
• VGS v. Castiel (2000) — Established that LLC managers owe fiduciary duties to members, including in voting on member removal.

Shareholder rights cases

Derivative standing, demand futility, books-and-records inspection, veil piercing, and related investor-protection rulings.

• Aronson v. Lewis (1984) — Established demand-futility test for derivative claims when challenged board approved transaction.
• In re Marvell (2017) — § 220 books-and-records demand standards.
• Production Resources v. NCT (2004) — Addressed creditor fiduciary-duty claims and veil piercing.
• Rales v. Blasband (1993) — Established demand-futility test for derivative claims when challenged board did not approve transaction.
• Schoon v. Smith (2008) — Held that a director does not have standing to bring a derivative suit on the corporation's behalf.
• Tooley v. DLJ (2004) — Established the modern test for distinguishing direct from derivative claims.
• Westland v. Stumpf (2011) — Books-and-records demand procedure.

All cases A–Z

• Aronson v. Lewis (1984) — Established demand-futility test for derivative claims when challenged board approved transaction.
• Auriga v. Gatz (2012) — Affirmed liability on contract grounds while expressly rejecting the Chancery's broader pronouncement that default fiduciary duties apply to LLC managers.
• Blasius v. Atlas (1988) — Established that board action primarily intended to interfere with the shareholder franchise requires a 'compelling justification.'
• Brehm v. Eisner (2000) — Refined business judgment rule pleading standards; shareholders must allege particularized facts to overcome the rule.
• Carmody v. Toll Brothers (1998) — Invalidated 'dead-hand' poison pill provisions.
• Corwin v. KKR (2015) — Established 'Corwin cleansing': fully informed, uncoerced shareholder vote insulates transaction from fiduciary-duty challenge.
• Cox Communications (2005) — Going-private transaction process review.
• Dieckman v. Regency (2017) — Addressed implied covenant of good faith and fair dealing in LP/LLC contexts.
• Disney (Chancery 2003) (2003) — Early Chancery decision on Disney/Ovitz severance case.
• Disney (Supreme) (2006) — Affirmed Chancery's high bar for bad-faith fiduciary claims.
• eBay v. Newmark (2010) — Held that directors have a duty to promote shareholder value, not non-shareholder constituencies, for for-profit corporations.
• Elf Atochem v. Jaffari (1999) — Established the broad enforceability of arbitration clauses in LLC Operating Agreements.
• Emerald Partners v. Berlin (2001) — Clarified the interaction between § 102(b)(7) exculpation provisions and the entire fairness standard.
• Fisk Ventures v. Segal (2008) — Applied § 18-802 'not reasonably practicable' standard to grant judicial dissolution of a deadlocked LLC.
• Gheewalla (2007) — Clarified that creditor fiduciary-duty claims require actual insolvency.
• Haley v. Talcott (2004) — Established standards for judicial dissolution of a deadlocked two-member LLC.
• In re Caremark (1996) — Established directors' duty to maintain reasonable oversight systems; failure to do so can breach the duty of good faith.
• In re Cumulus (2008) — Addressed sale-process procedures and Revlon duties.
• In re Dollar Thrifty (2010) — Single-bidder sale-process review.
• In re Marvell (2017) — § 220 books-and-records demand standards.
• In re Orchid Cellmark (2011) — Sale-process review in life-sciences M&A.
• In re Pure Resources (2002) — Tender offer freeze-out procedural standards.
• In re Trados (2013) — Addressed VC director duties when liquidation preference exceeds expected returns.
• In re Trulia (2016) — Reformed disclosure-only settlement practice in M&A litigation.
• Kahn v. Lynch (1994) — Clarified procedural protections needed to shift burden of proof in controller transactions.
• Kahn v. Tremont (1997) — Established entire fairness review for controlling-shareholder transactions.
• Lyondell v. Ryan (2009) — Reinforced the high bar for proving bad faith in sale-process Revlon claims.
• Matsushita v. Epstein (1996) — Class-action settlement preclusive effect.
• MFW (2014) — Established the 'MFW framework': controller squeeze-outs with both special committee and majority-of-minority vote qualify for business judgment rule review.
• Moelis decision (2024) — Invalidated certain stockholder agreement provisions that granted excessive control to a founder, triggering Delaware legislative response.
• Novell v. Microsoft (2002) — Antitrust litigation between tech companies.
• Paramount v. QVC (1994) — Clarified when Revlon duties trigger: any transaction that results in a change of control triggers Revlon, regardless of consideration form.
• Paramount v. Time (1989) — Held that a board can resist a hostile bid to pursue a strategic transaction if it does not constitute a sale of control.
• Production Resources v. NCT (2004) — Addressed creditor fiduciary-duty claims and veil piercing.
• Rales v. Blasband (1993) — Established demand-futility test for derivative claims when challenged board did not approve transaction.
• Revlon v. MacAndrews (1986) — Established 'Revlon duties': when a sale of the company becomes inevitable, the board's duty shifts to maximizing immediate shareholder value.
• Saba v. BlackRock (2023) — Addressed control-share statute applicability to closed-end funds.
• Salman (2016) — Insider-trading liability for tippee gifts.
• Sanchez (2015) — Director independence standards.
• Schoon v. Smith (2008) — Held that a director does not have standing to bring a derivative suit on the corporation's behalf.
• Smith v. Van Gorkom (1985) — Established that directors must inform themselves before approving major corporate decisions; gross negligence in decision-making breaches the duty of care.
• Stone v. Ritter (2006) — Consolidated Caremark oversight liability under the duty of loyalty rather than duty of care.
• Stoneridge (2008) — Scope of secondary-actor liability under federal securities law.
• Tooley v. DLJ (2004) — Established the modern test for distinguishing direct from derivative claims.
• Unocal v. Mesa (1985) — Established the two-prong 'Unocal test' for evaluating board defensive measures against takeover threats.
• VGS v. Castiel (2000) — Established that LLC managers owe fiduciary duties to members, including in voting on member removal.
• Weinberger v. UOP (1983) — Established entire fairness doctrine for controlling-shareholder squeeze-out transactions.
• Westland v. Stumpf (2011) — Books-and-records demand procedure.