Superior Court Applies “Dual” Personal Jurisdiction

The requirements necessary for establishing personal jurisdiction in the United States have grown increasingly difficult in recent years due to SCOTUS opinions such as Bristol-Myers Squibb, Daimler, and Goodyear. Various approaches to establishing personal jurisdiction, such as California’s sliding-scale approach, have been rejected by the SCOTUS.  Delaware’s “dual” personal jurisdiction has not been expressly rejected and was followed by the Delaware Superior Court in the recent case of Cardona v. Hitachi et al.

In the present case, Cardona, a Maryland resident, sued the designer and manufacturer of a nail gun, HKK a Japanese Corporation, along with its wholly-owned US subsidiary and distributing entity, HKU, alleging that the nail gun malfunctioned and caused Cardona serious permanent injuries while at a job site in Delaware.  HKK moved to dismiss as Cardona failed to establish specific personal jurisdiction.

In determining if the court holds personal jurisdiction over a party, the Superior Court recited the two-step approach. First, the court must look to Delaware’s long-arm statute and determine whether jurisdiction is appropriate there.  Second, the court must assure that jurisdiction complies with the Due Process Clause of the US Constitution.

Delaware’s long-arm statute affords the court jurisdiction to the maximum extent allowed by the US Constitution and contains both specific and general personal jurisdiction provisions. A combination of the two, “dual” jurisdiction has developed:

It is conceivable that a tort claim could enjoy a dual jurisdiction basis under (c)(1) [general] and (c)(4) [specific] if the indicia of activity set forth under (c)(4) were sufficiently extensive to reach the transactional level of (c)(1) and there was a nexus between the tort claim and transaction of business or performance of work.

Further clarified, “dual” jurisdiction exists as long as “(1) the defendant manufacturer demonstrates ‘an intent or purpose to serve the Delaware market with its product,’ and (2) that intent or purpose results in the introduction of the product into Delaware and ultimately causes the plaintiff’s injury.”  The Court did note that there have been criticisms to the “dual” jurisdiction approach.

The Court, sub judice, found that an intent to serve the Delaware market was shown by HKK setting up HKU a Delaware entity responsible for distributing HKK’s products to the US.  Also, although the specific nail gun’s point of origin is unknown, the specific model of nail gun is sold at Lowe’s stores nationwide and a strong inference exists that “significant amounts of [nail guns] have been sold in … Delaware.”

The Court went on to conduct a Due Process analysis, holding that, “HKK … solicited business from the whole U.S. market, and … HKK’s products were sold in Delaware.” Additionally, nail gun sales in Delaware were part of the “regular and anticipated flow” of commerce, not a fortuitous event – HKK set up a Delaware subsidiary for exactly this purpose.  The Defendant argued that Bristol-Meyers Squibb overruled the “stream of commerce” theory, but the Court disagreed. What was missing in Bristol-Meyers Squibb was a connection between the forum state and the claim.  Here, Plaintiff was performing a job in Delaware and the nail gun was supplied by a Delaware employer (also a named defendant). The Court found that the above actions satisfied at least two of the tests outlined in Asahi and denied the Defendant’s Motion to Dismiss.

Read the full opinion here.

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Fitbit Inc. Interlocutory Appeal Denied

The Court of Chancery (“Court”) first recited thr standard for granting an interlocutory appeal.  Interlocutory appeals are the exception, not the norm because they disrupt the normal procession of litigation.  The Court should first identify whether the decision being appealed decided a substantial issue of material importance.  Next, the Court must decide whether any likely benefits outweigh the probable costs.  If the balance is uncertain, the trial court should refuse to certify the appeal.

After its Motion to Dismiss was denied (“Opinion”), Fitbit filed an application for certification of an interlocutory appeal.  In its application, Fitbit claimed that (1) the Opinion conflicts with decisions of the trial courts upon a question of law – citing Supreme Ct. R. 42(b)(iii)(B); the Opinion involves an issue of first impression – citing Supreme Ct. R. 42(b)(iii)(A); and review of the Opinion denying the Motion to Dismiss may terminate the litigation – citing Supreme Ct. R. 42(b)(iii)(G).

The Court, while considering these factors, declined to certify the appeal.

First, no merits related decision was reached.  This is generally a necessary component to the certification of any interlocutory appeal.  The Court did acknowledge that no merits related decision will ever be reached on a Rule 23.1 motion to dismiss and although review of the appeal could terminate the litigation, that factor alone did not warrant certification.

Second, the Opinion does not conflict with existing trial court decisions. The appeal argued that the Court erroneously inferred the outside directors’ scienter “based solely upon” the “core operations doctrine[.]”  The Court noted that the Plaintiffs alleged well-pled facts that PurePulse accounted for 80% of Fitbit’s revenue and the curious timing surrounding waive of lock-up agreements supported the reasonable inference that the Fitbit Board knew of the serious problems surrounding PurePulse when they began to emerge.

Lastly, the Opinion did not address a novel question of law. The Court stated that is was satisfied that “it is not particularly novel or controversial as a matter of Delaware law to declare that a fiduciary may not share inside information with a fund he controls so that the fund, in turn, can trade on that inside information as a means to avoid Brophy liability.”

At this stage, the Court could not conclude that the Opinion decided a substantial issue of material importance or that any likely benefits outweigh the probable costs.  The Defendants will have a chance to demonstrate that the directors did not benefit from the trades in a motion for summary judgment.

Read the opinion here.

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Allegations of Insider Trading Amongst Fitbit’s Board of Directors

Fitbit Inc. has found itself in the midst of a shareholder derivative suit alleging the company’s board engaged in insider trading and improper conduct surrounding the 2015 IPO, lock-up agreements, and Secondary Offering after the Court of Chancery denied Fitbit’s Motion to Dismiss earlier this month.

Fitbit launched a new technology – PurePulse in 2014 which was designed to allow Fitbit devices to record a user’s heartrate with “superior accuracy.”  The technology was publicly praised, but internally, the complaint alleges, there were serious concerns surrounding the efficacy of PurePulse.

While the public was led to believe that PurePulse was functioning at or above expectations, Fitbit management structured the company’s 2015 IPO to allow the board to sell “an unusually large percentage of the stock” at higher prices, according to a Delaware Court of Chancery opinion.  The board then voted to waive lock-up agreements that were intended to prevent the board from selling more shares for a period after the IPO.  This waiver allowed the board to offer even more shares during the Secondary Offering – amounting to some $270 million in profit.

The Fitbit board argued that the Court should dismiss the case because the investors did not make a pre-suit demand on the board nor adequately allege demand futility. The Court disagreed and found that the investors “have pled particularized facts” excusing demand under Aronson and Rales.   When the suit was first filed, Fitbit’s board had seven members. Fitbit argued that the court should consider the board as it existed when the investors filed their second amended complaint when there were nine members in determining if demand would have been futile. Under Braddock v. Zimmerman, the Court sided with the investors finding that the operative time to consider the composition of the board is when the original complaint was filed. 

The Court also refused to dismiss the complaint for failure to state a claim.  The Court initially noted that if a complaint survives a motion under Rule 23.1, “it will likely survive a motion under Rule 12(b)(6).”  The board’s additional argument here was that Plaintiffs’ claims are subject to exculpation under Section 102(b)(7) of the DGCL and the exculpation provision in Fitbit’s certificate of formation. The Court found that the exculpation provision does not extend to breaches of the duty of loyalty.  In denying the Motion to Dismiss, the Court extended the Brophy decision for trades made, not by the insider himself, but by an entity he or she controls thus implicating the duty of loyalty.  In addition, the Court found that the board’s actions surrounding the IPO, lock-up waivers, and the Secondary Offering also implicated the duty of loyalty, allowing both claims to survive. 

Read the full opinion here.

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Judicial Dissolution of a Delaware Limited Liability Company

In Decco U.S. Post-Harvest, Inc., v. Mirtech, Inc., C.A. No.2018-0100-JTL (Del. Ch. Nov. 28, 2018), the Court of Chancery was again called on to determine if judicial dissolution of an LLC with two deadlocked managers was appropriate.

The Court held a one-day trial with only two live witnesses and eleven exhibits that resulted in a “mercifully sparse” record.  Vice Chancellor Laster ruled that Essentiv LLC no longer was a viable business because the patented technology upon which its business purpose relied, and which was contributed through a licensing agreement by one of the 50% members, was not within the member’s ability to license because it had already entered into an agreement with a third-party whereby the third-party retained all rights to the patented technology.

In 2010, MirTech and a company called AgroFresh entered into an agreement that called for joint ownership of“any and all inventions conceived or reduced to practice jointly by the Parties.” The parties’ main goal was to commercialize products based on a gas used to delay the ripening of fruit and other produce – 1-MCP.  A year later the parties entered into a new commercial agreement and consulting agreement that granted AgroFresh sole ownership over the parties’ joint inventions.

Essentiv LLC was formed in 2016 as a joint venture by Decco and MirTech to commercialize products based on 1-MCP. MirTech represented that it owned the patented rights in certain inventions using 1-MCP and granted Essentiv a license to use the patented rights.  MirTech did inform Decco that it had partnered with AgroFresh to produce RipeLock, a modified atmosphere package that used 1-MCP but, Decco did not ask to see any of MirTech’s agreements with AgroFresh.

Soon after Essentiv went to market with its first 1-MCP product, AgroFresh filed an infringement suit based on its status as owner of the patented RipeLock technology Essentiv used for its product TruPick. In 2017, the court ruled in favor of AgroFresh in the infringement suit and Essentiv agreed to stop all activity related to TruPick. In a subsequent Consent Judgment, MirTech agreed to entry of judgment against it on 20 different counts of wrongdoing, including willful infringement, fraud,and misappropriation of trade secrets.

Decco filed this suit to dissolve Essentiv after MirTech refused to voluntarily dissolve the LLC based on the company’s loss of its sole technology. The court found that the Consent Judgment “prevents the Company from continuing to sell TruPick”; that the company “has no plans to develop any other products”; and that “there is no viable 1-MCP Business” and “no viable Non-1-MCP Business.”  Therefore, the court held, “it is not reasonably practicable for the Company to carry on its business” and that dissolution is required under Delaware LLC Act § 18-802.

Read the full opinion here.

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Delaware Superior Court Addresses Competing Arbitration Clauses

On November 9, 2018, Judge Carpenter of the Delaware Superior Court issued the Court’s opinion denying Toll Brothers, Inc.’s motion to dismiss homeowners Frederick and Connie Wang’s complaint, thus allowing all six counts of the Wang’s claims against their builder to move forward.

As some background, the Wangs filed suit against Toll Brothers in March of 2015, alleging that their home had suffered significant water intrusion related damage as a result of Toll Brothers’ failure to properly install the windows and stucco exterior during construction.  Toll Brothers filed a motion to dismiss on the grounds that the contract of sale, drafted by Toll Brothers, contained a binding arbitration clause which governed any disputes between the Wangs and Toll Brothers.  Attorneys for the Wangs, Blake Bennett and Christopher Lee of Cooch and Taylor, P.A., argued that the motion should be denied because an arbitration clause found in the later executed warranty agreement controlled, and that arbitration clause explicity stated that the Wangs had the right to “pursue remedies other than conciliation and binding arbitration.”  Alternatively, Mr. Bennett and Mr. Lee argued that the arbitration provision in the contract was unconscionable, which is an issue of fact for a jury.

During a hearing on that motion to dismiss in August of 2015, Judge Carpenter declined to dismiss the complaint but rather stayed the cased pending the outcome of court-ordered arbitration.  At no time did the Court opine that such arbitration would be binding arbitration.  The Court later wrote that it ordered the arbitration because it recognized “that expensive continual litigation would not be helpful to getting Plaintiffs’ house fixed nor in the best interest of Toll Brothers, who had an excellent reputation in the building community.”

The parties moved forward with arbitration in May of 2017, and although the arbitrator ruled in the Wangs’ favor, the Wangs were dissatisfied with the damages awarded and decided to continue to litigate the matter in the Superior Court.  Shortly thereafter, Toll Brothers filed another motion to dismiss on the grounds that binding arbitration had occurred.  The Wangs opposed that motion on the grounds, once again, that the arbitration was not binding arbitration as the arbitration provision in the warranty controlled.  Toll Brothers concurrently filed a complaint to affirm the arbitration award in Chancery Court.

After oral argument before Judge Carpenter, the Court issued its opinion that a) it did not order the parties to binding arbitration in August of 2015, and b) that the arbitration clause in the warranty superseded the arbitration clause in the contract because, consistent with the Delaware Court of Chancery’s decision in Country Life Homes, Inc. v. Shaffer, the warranty was executed at a later date than the contract.  As the Court noted, “when a later-in-time contract addressed the same issues (here, the means of dispute resolution and the rights to be asserted), it will prevail in the absence of evidence to the contrary.”

In its opinion, the Court stated the following regarding its ruling after the August of 2015 oral argument:

The Court was clear that it was hesitant to enforce the contractual arbitration provision as there was a conflict between the Contract and Warranty arbitration clauses.  This hesitation makes it more than obvious that the Court’s suggestion that the parties first go to arbitration – clearly meant non-binding arbitration.  In hindsight, this good faith effort by the Court to hopefully get the parties to come to a reasonable, common sense resolution of this dispute merely provided the parties more grounds to advance legal arguments instead of addressing the real issues of this litigation.  This is clearly unfortunate, as is so often the case, the parties are now only making litigation decisions and not good business ones.

As a result of the Court’s ruling, it retained jurisdiction over all counts of the complaint and the arbitration award will not be entered as a judgment in any court nor may it “be cited as evidence or precedent, with any preclusive effect, in any court, arbitration, or other proceeding.”

The Court’s ruling is likely to be heavily relied upon in Delaware residential construction litigation matters as there are often competing and contradictory arbitration provisions in the contracts and warranty agreements executed by the parties.

Chris Lee

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Equitable Counterclaims in Courts of Law

In the early stages of the American legal system, most state judiciaries were separated into two types of courts – courts of law and courts of equity.  An action at law is an action typically for money damages such as a tort or breach of contract. An action in equity seeks a remedy when there is no available remedy at law, such as, when money damages will not suffice. Over time, this distinction in the American legal system has largely eroded and many courts now hear legal and equitable claims together.  No so in Delaware.  Delaware’s Court of Chancery retains exclusive jurisdiction over claims and counterclaims rooted in equity and fairness.  The Court of Chancery may, under the Clean-Up Doctrine, hear and decide ancillary legal matters to the main equitable claim.  There is, however, no analogous doctrine in the Superior Court.

One can imagine a scenario where a party finds itself defending a case in a court of law, yet wishes to assert equitable counterclaims.  That is exactly what happened in SARN Energy LLC, v. Tatra Defence Vehicle AS, C.A. No. N17C-06-355 EMD CCLD, November 5, 2018.

The parties entered into an agreement where SARN was to use its best efforts to help Tatra sell Pandur military vehicles to the Czech Ministry of Defense. SARN accomplished this goal and Tatra was able to sell 20 Pandurs for approximately $80 million. Tatra failed to fully compensate SARN under the contract and SARN brought suit for breach of contract.  Before filing suit, but after SARN realized that Tatra would not perform under the contract, counsel for SARN sent allegedly false and disparaging letters to Tatra’s parent company, CSG, and the Czech National Security Office concerning alleged illegal actions taken by CSG.  These letters were written on SARN SD3 LLC letter head.

Tatra counterclaimed for, inter alia, bad faith and defamation.  SARN moved to dismiss because SD3, not SARN sent the allegedly disparaging and false letters. Tatra argued that SARN may be responsible under an alter-ego theory of liability.  The Court held that at the motion to dismiss stage, there was at least enough pled to allow discovery on the alter-ego theory of liability, however, the Court of Chancery, not the Superior Court, was the correct court to bring these claims.   The Court dismissed the defamation and bad faith claims but stayed dismissal for 20 days to allow Tatra to transfer the counterclaims to the Court of Chancery.  The Court noted that Tatra could have sought to have the Superior Court judge designated to preside in Chancery over the Counterclaims.  To accomplish this, Tatra should have written to the Chancellor explaining why the designation is appropriate.  The Chancellor would then write to the Chief Justice, and the Chief Justice would ultimately determine if such designation is appropriate. Tatra, however, did not seek designation and was limited to attempt the transfer to avoid dismissal.

Read the full opinion here.

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Delaware Gun Restrictions Held Unconstitutional

In Delaware State Sportsmen’s Association and the Bridgeville Rifle and Pistol Club v. Delaware Department of Natural Resources and Environmental Control and Delaware Department of Agriculture, C.A. K18C-05-047-JJC (Del. Super. Oct. 11, 2018), Plaintiffs challenged new regulations issued in light of the Delaware Supreme Court’s holding in Bridgeville Rifle and Pistol Club, Ltd. v. Small, 176 A.3d 632 (Del. 2017) (“Bridgeville I”), which struck down regulations prohibiting firearms in state parks.  In the case at bar, Plaintiffs challenged the regulations as a violation of their right to keep and bear arms and to be free from unreasonable searches and seizures. The new regulations prohibited firearms in camping areas of state parks and state forests where people sleep overnight with their families and permitted officers to perform background checks on people carrying firearms and to demand permits from concealed carry holders.

The Court’s inquiry began with the burden of proof.  The Court noted that when the constitutionality of a regulation is challenged, the Agencies hold the burden in establishing their constitutionality and the regulations are subject to intermediate scrutiny. The Court held that the Agencies’ designation of camping areas as “sensitive,” did not survive intermediate scrutiny, and fashioned a three-part test for determining if an area’s designation as “sensitive” satisfies intermediate scrutiny: (1) whether there is a controlled entry point; (2) whether visitors are screened by security; and (3) whether the area is supervised by law enforcement personnel or easily accessible to law enforcement and emergency responders.  The regulations failed the test and were struck down.

Additionally, Plaintiffs challenged a portion of the regulations that permitted law enforcement officers to ask an individual for identification to conduct a background check. The Court held “[t]hese regulations give unfettered discretion to law enforcement to stop visitors, question them and require identification without requiring a scintilla of evidence of criminal activity.” The regulations pertaining to the request for identification were held to be facially unconstitutional, where the regulations would be invalid under any possible set of circumstances.  The Court struck this portion of the regulations as unconstitutional under both the Fourth Amendment and Article I, Section 6 of the Delaware Constitution.

The Court also struck down a provision of the regulations where the Agencies overstepped their authority and attempted to recognize out-of-state concealed carry permits for visitors of state parks and state forests. The Delaware Attorney General has the sole authority to issue concealed carry permits and the Court held this portion of the regulations was preempted on statutory grounds.

Read the full opinion here.

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Requests for Admissions – What Must You Admit?

In In Re: Asbestos Litigation (Stewart), the sole remaining Defendant in the case filed Requests for Admission (“RFA”) directed to the Plaintiff.   All 22 RFAs sought admissions related to Drillings Specialties Company (“DSC”), which allegedly sold asbestos containing products that the Plaintiff was exposed to. DSC’s successor in interest was previously a co-defendant in the case but reached a settlement with Plaintiff and was dismissed.

Plaintiff objected to 19 RFAs based on a lack of personal knowledge and 3 RFAs because they sought an admission about an ultimate fact at issue.  Thereafter, the Defendant filed a Motion to Compel claiming that the RFAs were drawn from statements Plaintiff made in her Opposition to DSC’s Motion for Summary Judgment and the proper subject of admissions.

The Special Master noted that pursuant to Superior Court Civil Rule 36, a party cannot object to an RFA because he or she does not personally have the information requested.  Instead, the party must make a “reasonable inquiry and [state] that the information known or readily obtainable by the party is insufficient to enable the party to admit or deny…”

The Special Master ruled that any objections based on lack of personal knowledge were insufficient because “while Plaintiff may not have had personal knowledge of the fact that [DSC’s product] contained asbestos, her counsel knew that fact and represented it to the Court, such that upon reasonable inquiry she or her counsel should have admitted such fact in her answers to this RFA.” Further, the objections did not indicate that Plaintiff made a reasonable inquiry and deemed the RFAs objected to on that basis admitted since the RFAs related to basic facts that were drawn from Plaintiff’s own representations.

Conversely, RFAs are not the appropriate mechanism to establish the ultimate facts at issue. The Court denied Defendant’s Motion as it related to the three RFAs that sought to establish an “ultimate fact at issue” because RFAs are a means to eliminate facts about which there is no controversy, not establish a legal conclusion or an ultimate fact at issue that generally requires expert testimony.

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Demand Futility and the Newark Country Club

In Jennifer L. Stritzinger v. Dennis Barba et al., Stritzinger, a non-dues-paying member of nominal defendant Newark Country Club (the “Club”) brought derivative claims against the twelve members of the Club’s board of directors (the “Board”) for breach of fiduciary duty and the appointment of a receiver related to certain decisions the Board elected to take in light of the Club’s financial difficulties.

The Club operated at a deficit for a number of years preceding the litigation at issue.  Although operating at a loss, the Club rebuked numerous offers to purchase and develop the Club’s land.  Without sufficient cash flow, the Board considered several options to raise financing for club operations.  The Club’s members discussed four options at a “town hall meeting.”  The options were (i) merging with another club; (ii) selling the Club to a land broker but allowing the Club to continue its operations for ten years; (iii) working with the city of Newark for it to purchase the development rights of the property; and (iv) forming Newark Country Club Mortgage Company, LLC to make a loan to the Club.  The Club decided to form the LLC to make a loan to the Club. The loan was secured by the Club’s land with an interest rate of 5.75% and was to be used to repay certain of the Club’s short-term obligations but would not be used to address the issues surrounding the Club’s long-term financial stability.

Five of the twelve Board members invested in the LLC.  These five members recused themselves from the vote authorizing the loan.  After Stritzinger’s Motion to Expedite was denied and two amendments to the Complaint, Defendants moved to dismiss for failure to make a pre-suit demand on the Board and for failure to state a claim.

The Court agreed with Defendants and dismissed Plaintiff’s claims. The Court’s inquiry started with demand requirements in derivative cases.  The Court noted that Stritzinger failed to make a demand or allege demand futility. Under the Aronson test, to show demand futility, Stritzinger was required to plead “particularized factual allegations that raise a reasonable doubt that (1) [a majority of] the directors are disinterested and independent [or] (2) the challenged transaction was otherwise the product of a valid exercise of business judgment.”

Stritzinger alleged that the remaining seven members of the Board were not disinterested because they acted in bad faith when they approved the loan transaction and thus faced a substantial threat of personal liability for taking the action. Although the Court questioned whether a substantial threat of personal liability applied to the first or second prong of Aronson, regardless of what prong that factor applied to, Stritzinger did not allege demand futility.  The Court found that Stritzinger’s complaints boiled down to “a disagreement with the substance of the decision the Board made to approve the transaction.”

As to the receiver count, the Court stated that without a statutory basis for the appointment of a receiver, the Court could only appoint a receiver in cases of, “fraud, gross mismanagement, positive misconduct by corporate officers, breach of trust, or extreme circumstances showing imminent danger of great loss which cannot otherwise be prevented.”  The Court found that none of the allegations in Plaintiff’s Second Amended Complaint reached anywhere near the level necessary to appoint a receiver and dismissed the Complaint.

Read the full opinion here.

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Calculating the Appropriate TRO Bond Amount

In Applied Energetics, Inc. v. George Farley and AnneMarieCo., LLC, CA No. 2018-0489-TMR, the Vice Chancellor addressed the appropriate bond the Plaintiff must post in connection with a preliminary injunction.  Court of Chancery Rule 65(c) requires that any applicant seeking a restraining order or injunction post sufficient security for the payment of costs and damages suffered by a party that is improperly enjoined. The bond represents that maximum amount that the enjoined party may recover.

Courts “err on the high side in setting a bond” because actual damages are difficult if not impossible to calculate. The party seeking a bond must show a credible basis for the amount of claimed damages, however the bond need not be calculated with mathematical certainty.

The Defendants sought a bond of $1,750,000 –  representing 50% of the value of their 25,000,000 shares on July 5, 2018 with per-share damages of $0.07.

Plaintiff sought a nominal bond because of the strength of Plaintiff’s claims.  Even if the Court were to award more than a nominal bond, Plaintiff contended that Defendants’ damages were speculative and exaggerated because the Defendants cannot legally or practically sell all their 25,000,000 shares.

The Court held that the appropriate measure of damages for the shares “is the difference between (1) the price of Applied Energetics stock on the date Defendants could have and would have sold their shares at a higher price but for the injunction … and (2) the as-yet-unknown price of Applied Energetics stock on the date Defendants sell the shares.”  To calculate the unknown price, the Court analyzed the historical prices of Applied Energetics stock since the date the injunction was issued to find an average intraday low price of $0.111 per share. The per-share damages estimate was the difference between $0.14 (the share price when Defendants could have sold their shares) and $0.111, or $0.029.

The Court agreed, in part, with Plaintiff and found that AMC could not sell more than 1,911,949 of its 20,000,000 shares per quarter.  The Court found AMC’s estimated damages to be $55,446.52 –  1,911,949 shares multiplied by $0.029.  No trading restrictions applied to Farley’s 5,000,000 shares and thus the bond as applied to Farley’s shares was $145,000.  The Court set a bond of $200,446.52 – the total damages of AMC’s and Farley’s nearly 7,000,000 shares to be posted within five days of the Order.

The Court’s opinion is available here.


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