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Barry M. Klayman

Member

: Wilmington
1201 North Market Street
Suite 1001
Wilmington, DE 19801
P: (302) 295-2035
F: (215) 701-2209

Barry M. Klayman

Recent Publication:
Chancery Addresses Subrogation Rights in the Context of Claims for Indemnification
Barry Klayman, a member of Cozen O’Connor’s Commercial Litigation and Bankruptcy, Insolvency & Restructuring Practice Groups, and Mark Felger, co-chair of the Bankruptcy, Insolvency & Restructuring Practice Group, co-authored an article in Delaware Business Court Insider on a recent Court of Chancery case dealing with the rights of a putative subrogee in the context of a claim for indemnification of defense costs.
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Barry M. Klayman concentrates his practice in the areas of civil and commercial litigation, fiduciary and corporate governance, and bankruptcy. He represents clients in many industries, including manufacturing, environmental services, financial and professional services, software manufacturers, publishers, retailers, real estate developers and real estate brokers.

Barry has extensive jury trial experience in Pennsylvania and Delaware, and has handled numerous jury trial cases, including a case that was reputed at the time to have been the longest civil jury trial in Philadelphia Court of Common Pleas history.

Barry’s corporate governance practice involves representing corporations, directors, officers, stockholders and other stakeholders. He also advises clients on implementing policies and mechanisms to ensure compliance with best practices.

Barry’s bankruptcy practice involves representation of debtors, trustees, and creditors in adversary actions in bankruptcy court, particularly in prosecuting and defending preference actions and D&O liability claims. In addition, he frequently advises creditors concerning their rights and remedies in bankruptcy court.

Barry also has experience handling complex civil litigation matters and has represented employers and manufacturers in cases dealing with personal injury claims due to exposures to asbestos, benzene, lead and other heavy metals, PCB, solvents and other hazardous substances. He has also litigated several cases in the Delaware Valley that deal with civil rights issues, including the rights of persons with physical and mental disabilities.

Barry is a frequent lecturer on civil litigation topics and legal ethics for the National Business Institute. He also writes a monthly feature for the Delaware Business Court Insider, an online publication.

Barry serves on the board of directors of the Jack M. Barrack Hebrew Academy (formerly Akiba Hebrew Academy) in Radnor, Pa. He was president of the school from 2000 to 2003. He formerly served as a member of the Jewish Federation of Greater Philadelphia’s Committee on Policy, Strategy and Funding and chaired the Committee on National and Overseas Services. Until May 2009, he served on the board of directors of BBYO, Inc., and its predecessor, the B'nai B'rith International Youth Commission. He was chairman and a member of the board of directors of the Philadelphia Region B'nai B'rith Youth Organization.

Barry earned his undergraduate degree, magna cum laude, from Columbia University and his law degree, cum laude, from Harvard Law School.

Experience

Defended class action plaintiffs, Kleen Products LLC; R.P.R. Enterprises, Inc., El Jay Poultry Corporation; and Mighty Pac, Inc. from complaint by the Chapter 11 debtors seeking to enjoin pursuit of an anti-trust conspiracy action under the Sherman Act for price fixing in the container board industry as being violation of the Chapter 11 discharge and related discharge injunction.

Represented the Commonwealth of Pennsylvania in a class action dealing with the rights of mentally handicapped persons and was involved in the implementation and monitoring of a comprehensive consent decree following their deinstitutionalization.

Represented WestPoint International, Inc., and its officers and directors in litigation alleging breaches of fiduciary duty in connection with bylaw changes and issuance of preferred stock.

Represented Wilmington Trust Company as indenture trustee in an action to enjoin a bank merger that violated the terms of the indenture agreement.

Represented Hyosung Corporation in actions alleging breaches of commercial agreements.

Represented a regional trucking company in defense of an action for a commission by an investment advisor.

Represented the former owner of a secondary lead smelting facility in lawsuits by former employees alleging toxic exposures to lead and other heavy metals.

Represented North American Asbestos Corporation, Pittsburgh Coning Corporation and Pneumo Abex Corporation in numerous cases alleging toxic exposures to asbestos and asbestos containing products.

News

Barry Klayman Victory Before the Delaware Court of Chancery Highlighted in Delaware Law Weekly

September 04, 2014

Barry Klayman, a member of Cozen O'Connor's Commercial Litigation Department, secured a significant victory before the Delaware Court of Chancery on behalf of firm client QC Communications, Inc. The court found that a former officer and employee of WJKS Kiss 101.7, a Wilmington radio station owned by QC Communications, had enriched himself by breaching his fiduciary duty of loyalty, and held the defendant liable to repay the money he had diverted from the radio station.

Barry Klayman and Mark Felger quoted in Delaware Business Court Insider

January 18, 2012

Barry Klayman and Mark Felger were quoted in the Delaware Business Court Insider article entitled ''Delaware Bankruptcy Court Expounds on Meaning and Significance of Stern'' regarding Judge Christopher S. Sontchi's views on the significance of the Supreme Court's decision in Stern v. Marshall.

Barry Klayman and Mark Felger featured in Delaware Business Court Insider

August 10, 2011

Barry Klayman and Mark Felger featured in Delaware Business Court Insider

Chancery Addresses Subrogation Rights in the Context of Claims for Indemnification

April 04, 2018

Barry Klayman, a member of Cozen O’Connor’s Commercial Litigation and Bankruptcy, Insolvency & Restructuring Practice Groups, and Mark Felger, co-chair of the Bankruptcy, Insolvency & Restructuring Practice Group, co-authored an article in Delaware Business Court Insider on a recent Court of Chancery case dealing with the rights of a putative subrogee in the context of a claim for indemnification of defense costs.

Financial Distress Is a Prerequisite to Good-Faith Bankruptcy Filing

March 07, 2018

Mark Felger, co-chair, and Barry Klayman, a member of Cozen O'Connor's Bankruptcy, Insolvency & Restructuring Practice Group, co-wrote an article in Delaware Business Court Insider about the In re Rent-A-Wreck of America, Case that was dismissed by the district of Delaware.

Stockholders Agreement Interpreted to Not Run Afoul of DGCL [Delaware Business Court Insider]

February 14, 2018

Barry Klayman and Mark Felger, members of Cozen O'Connor's Commercial Litigation and Bankruptcy, Insolvency & Restructuring Practice Groups, discuss a recent Delaware Court of Chancery case, Schroeder v.Buhannic in the Delaware Business Court Insider.

Bankruptcy Judge Applies Anti-Forfeiture Statute to Save Debtor's Exercise of Option to Renew Lease [Delaware Business Court Insider]

January 17, 2018

Barry Klayman and Mark Felger, members of Cozen O'Connor's Commercial Litigation and Bankruptcy, Insolvency & Restructuring Practice Groups, discuss a recent Delaware bankruptcy case, In re Fresh-G Restaurant Intermediate Holding, in Delaware Business Court Insider.

Receiver's Disallowance of Creditor's Claim Subject to De Novo Review [Business Court Insider]

December 06, 2017

Barry Klayman and Mark Felger, members of Cozen O’Connor’s Bankruptcy, Insolvency & Restructuring Practice Group, discuss case B.E. Capital Management Fund v. Fund.com in Delaware Business Court Insider.

Bankruptcy Court Affirms Authority to Approve Nonconsensual Third-Party Releases [Delaware Business Court Insider]

November 08, 2017

Barry Klayman and Mark Felger, members of Cozen O’Connor’s Bankruptcy, Insolvency & Restructuring Practice Group, discuss the significant decision reached in In re Millennium Lab Holdings II, in Delaware Business Court Insider.

Corporation Is Not Precluded From Contradicting Its Own 30(b)(6) Witness [Delaware Business Court Insider]

October 11, 2017

Barry Klayman and Mark Felger, members of Cozen O’Connor’s Bankruptcy, Insolvency, & Restructuring Practice Group, discuss, in the Delaware Business Court Insider, a recent case in which the Delaware Court of Chancery refused to preclude a defendant corporation from offering evidence at trial that contradicted or was otherwise inconsistent with the deposition testimony of its Rule 30(b)(6) witness, although the plaintiffs would be able to rely on the earlier 30(b)(6) testimony and use it for impeachment.

Bankruptcy Court Predicts Del. Will Recognize Existence of De Facto LLCs [Delaware Business Court Insider]

September 06, 2017

Barry Klayman and Mark Felger, members of Cozen O’Connor’s Bankruptcy, Insolvency & Restructuring Practice, discuss a recent case in which the Bankruptcy Court for the District of Delaware predicted that the state’s courts would recognize the existence of de facto limited liability companies, just as they recognize de facto corporations, in Delaware Business Court Insider.

Drop Shipped Goods Failed to Qualify for Administrative Expense Priority in Bankruptcy

August 09, 2017

Barry Klayman and Mark Felger, members of the Cozen O’Connor Bankruptcy, Insolvency & Restructuring Practice Group, discuss in the Delaware Business Court Insider a recent case in which the Bankruptcy Court for the District of Delaware held that goods delivered directly to the debtor's customers within 20 days prior to the bankruptcy petition, even though at the debtor's direction and utilizing the debtor's account with the shipper, will not qualify for administrative priority treatment under section 503(b)(9) of the Bankruptcy Code because the debtor never had physical possession of the goods.

Standing in Foreclosure Actions Requires Holding Both Mortgage and Note

July 05, 2017

Barry Klayman and Mark Felger, members of Cozen O'Connor's Bankruptcy, Insolvency & Restructuring Practice, discuss in the Delaware Business Court Insider a recent case in which a divided Delaware Supreme Court held that a mortgage assignee must be entitled to enforce the underlying obligation that the mortgage secures in order to foreclose.

Court Lacks Personal Jurisdiction Over Nonresident Blogger, Website Host

June 07, 2017

Barry Klayman and Mark Felger discuss a case from the Delaware Superior Court dealing with the issue of an allegedly defamatory article that caused injury to a Delaware corporation hosted on a website outside of Delaware.

Tribal Sovereign Immunity of Casinos in Preference Actions

May 10, 2017

Mark Felger and Barry Klayman discuss a recent case from the Delaware Bankruptcy Court in The Delaware Business Court Insider.

Delaware’s Anti-SLAPP Statute Limited to Land Use Disputes

April 05, 2017

Mark Felger and Barry Klayman discuss a recent case from the Delaware Court of Chancery in The Delaware Business Court Insider.

Dollar Cap on Committee Professional Fees Under Confirmed Plan

March 08, 2017

Mark Felger and Barry Klayman discuss a case involving the effect of a DIP financing order cap on professional fees after a Chapter 11 plan is confirmed in the Delaware Business Court Insider. .

Directors Are Public Figures for Election-Related Communications Among Investors

February 08, 2017

Mark Felger and Barry Klayman discuss a case of first impression from the Court of Chancery in The Delaware Business Court Insider.

Post-Confirmation Examinations Pursuant to Bankruptcy Rule 2004

January 18, 2017

Mark Felger and Barry Klayman discuss a recent bankruptcy court decision in The Delaware Business Court Insider.

Turnover Order Cannot Trump Prohibition on Disclosure of ESI by Email Service Provider [Delaware Business Court Insider]

December 21, 2016

Mark Felger and Barry Klayman discuss a recent Delaware bankruptcy court decision regarding the federal Stored Communications Act.

Bankruptcy Court Holds Class-Action Waiver in Arb Agreement Violates NLRA [Delaware Business Court Insider]

November 09, 2016

Mark Felger and Barry Klayman discuss a recent Delaware bankruptcy court decision in The Delaware Business Court Insider.

Vendor’s Reclamation Rights Survive Lien of Post-Petition DIP Loan [Delaware Business Court Insider]

October 12, 2016

Mark Felger and Barry Klayman discuss a recent Delaware bankruptcy court decision in The Delaware Business Court Insider.

Post-Confirmation Noncore Claim Defeats Bankruptcy Court Jurisdiction [Delaware Business Court Insider]

September 07, 2016

Mark Felger and Barry Klayman discuss a decision that limits jurisdiction over post-confirmation, noncore claims by the trustee of a liquidating trust.

Bankruptcy Judge Allows Filing of Class-Based Proof of Claim [Delaware Business Court Insider]

August 10, 2016

Mark Felger and Barry Klayman discuss a recent Delaware bankruptcy decision allowing the filing of a class-based proof of claim.

Use of ‘Golden Share’ to Block Voluntary Bankruptcy Violates Federal Laws [Delaware Business Court Insider]

July 06, 2016

Mark Felger and Barry Klayman discuss a recent Delaware bankruptcy decision in their Delaware Business Court Insider article.

Champerty and Maintenance Redux [Delaware Business Court Insider]

June 08, 2016

Mark Felger and Barry Klayman discuss the status of champerty and maintenance actions in Delaware in their DBCI article, “Champerty and Maintenance Redux.”

Supreme Court Rejects Fear of ‘Super-Director’ [Delaware Business Court Insider]

May 11, 2016

Mark Felger and Barry Klayman discuss a Delaware Supreme Court case addressing the issue of honesty and fair dealing among directors.

Production of Metadata Ordered on Showing of Particularized Need [Delaware Business Court Insider]

April 06, 2016

Mark Felger and Barry Klayman discuss the showing of particularized need required to compel the production of metadata in The Delaware Business Court Insider.

Judge Rejects Fee Defense Provisions in Retention Applications [Delaware Business Court Insider]

March 09, 2016

Mark Felger and Barry Klayman discuss two decisions from the U.S. Bankruptcy Court for the District of Delaware in the Delaware Business Court Insider.

Complex Unsettled Foreign Law Issues and Forum Non Conveniens [Delaware Business Court Insider]

February 17, 2016

Mark Felger and Barry Klayman discuss the impact of complex, unsettled issues of foreign law in the dismissal of cases on forum non conveniens grounds.

Superior Court Reaffirms Strong Public Policy In Favor of Arbitration

January 13, 2016

Mark Felger and Barry Klayman, both members of Cozen O’Connor’s Bankruptcy group, discuss mandatory arbitration provisions and a recent Delaware decision.

WARN Act Violation States Fiduciary Duty Breach [Delaware Business Court Insider]

December 09, 2015

Mark Felger and Barry Klayman, both members of Cozen O’Connor’s Bankruptcy group, discuss a recent case in which a judge came to the conclusion that a knowing violation of the law by a fiduciary is a breach of duty.

Limiting Reach of Section 205: An Exercise in Statutory Interpretation [Delaware Business Court Insider]

November 11, 2015

Barry Klayman and Mark Felger discuss the Court of Chancery's recent decision limiting the scope of DGCL Section 205 to declaring the validity of, but not the invalidity of, a defective corporate act

A Cautionary Tale For Involuntary Bankruptcy Petitioners [Law360]

October 26, 2015

Barry Klayman discusses the recent decision by the U.S. Court of Appeals for the Third Circuit in In re: Forever Green Athletic Fields Inc., which held that an involuntary bankruptcy petition filed under 11 U.S.C. § 303 may be dismissed for bad faith.

3rd Circuit Affirms Bad Faith Involuntary Bankruptcy Dismissal Increasing Risk of Punitive Damages [Bankruptcy, Insolvency & Restructuring Alert]

October 19, 2015

The decision places another hurdle for creditors to surmount when considering whether to put a debtor in bankruptcy and creates another means for debtors to oppose such filings. It also enumerates the standard for evaluating whether a filing is in bad faith.

Chancery Rejects Controller's Conspiracy Claims [Delaware Business Court Insider]

October 14, 2015

Barry M. Klayman and Mark E. Felger published an article in the Delaware Business Court Insider discussing the finding that the plaintiffs' conduct was "prejudicial to the administration of justice" in the OptimisCorp v. Waite case.

Advancement Claims Not Entitled to Priority in LLC Receivership [Delaware Business Court Insider]

September 09, 2015

Barry M. Klayman and Mark E. Felger published an article in the Delaware Business Court Insider discussing the cases of Andrikopoulos v. Silicon Valley Innovation LLC and Henson v. Sousa. The main dispute between the parties in both cases was whether, in the context of LLC receiverships under Delaware law, advancement claims are administrative expenses or unsecured creditor claims.

Forum Selection Clause Held Waiver of Removal Right [Delaware Business Court Insider]

August 12, 2015

Barry M. Klayman and Mark E. Felger published an article in the Delaware Business Court Insider discussing the case of Interdigital v. Wistron, which answers the question of whether a forum selection clause in an agreement constitutes a waiver of a party’s right to remove the case to federal court if the other party files suit in a Delaware state court.

Derivative Standing in Bankruptcy Proceedings [Delaware Business Court Insider]

July 07, 2015

Barry M. Klayman and Mark E. Felger, members in the firm's Wilmington office, published an article in the Delaware Business Court Insider discussing the case of In re Optim Energy LLC (Walnut Creek Mining v. Cascade Investment LLC) and why the opinion in this case is noteworthy.

Section 220 Demand Doesn't Extend to Non-employee Directors' Private Email [Delaware Business Court Insider]

June 10, 2015

Barry M. Klayman and Mark E. Felger, members in the firm's Wilmington office, published an article in the Delaware Business Court Insider discussing the case of In re Lululemon Athletica 220 Litigation and whether a corporation can search the personal email accounts of its non-employee directors under Section 220.

Automatic Stay Doesn't Apply to Right to Compel Annual Meeting [Delaware Business Court Insider]

May 13, 2015

Barry M. Klayman and Mark E. Felger, members in the firm's Wilmington office, published an article in the Delaware Business Court Insider titled ''Automatic Stay Doesn't Apply to Right to Compel Annual Meeting.'' The article discusses the case of In re SS Body Armor I and if a stockholder has the right to compel a debtor to hold an annual meeting for the purpose of electing a new board of directors continues during the pendency of a Chapter 11 proceeding, and that the automatic stay does not apply to the exercise of that right.

Non-signatory May Enforce Forum Selection Clause to Defeat Removal [Delaware Business Court Insider]

April 08, 2015

Barry M. Klayman and Mark E. Felger, members in the firm's Wilmington office, published an article in the Delaware Business Court Insider titled "Non-signatory May Enforce Forum Selection Clause to Defeat Removal." The article discusses the case of Carlyle Investment Management LLC v. Moonmouth, and how the case can be instructive for its application of Delaware law to the question of when a non-signatory to an agreement will be bound by its forum selection clause and whether the forum selection clause can be enforced by another non-signatory.

Court Adopts Narrow View of Exception to Borrowing Statute [Delaware Business Court Insider]

March 10, 2015

Barry M. Klayman and Mark E. Felger, members in the firm's Wilmington office, published an article in the Delaware Business Court Insider titled "Court Adopts Narrow View of Exception to Borrowing Statute." The article discusses Delaware's borrowing statute and statute of limitations, and specifically the case of Saudi Basic Industries v. Mobil Yanbu Petrochemical, 866 A.2d 1 (Del. 2005).

Fiduciary Duty Claims Held Non-core and Subject to Jury Trial [Delaware Business Court Insider]

February 10, 2015

Barry M. Klayman and Mark E. Felger, members in the firm's Wilmington office, published an article in the Delaware Business Court Insider titled "Fiduciary Duty Claims Held Non-core and Subject to Jury Trial." The article discusses whether or not claims for breach of fiduciary duty are aiding and abetting breach of fiduciary duty against an officer and director of a debtor core proceedings, and whether those claims are subject to trial by jury.

Proceeds of Insurance Policy Are Property of Estate [Delaware Business Court Insider]

January 14, 2015

Barry M. Klayman and Mark E. Felger, members in the firm's Wilmington office, published an article in the Delaware Business Court Insider titled ''Proceeds of Insurance Policy Are Property of Estate.'' This article discusses the case of Chartis Specialty Insurance v. Tri-Valley (In re Tri-Valley), Adv. No. 12-51243 (MFW) (Bankr. D. Del. Nov. 25, 2014) and third-party insurance policies in bankruptcy cases.

Chancery Court Addresses Section 220 Demands on Close Corporations [Delaware Business Court Insider]

December 03, 2014

Barry M. Klayman and Mark E. Felger, members in the firm's Wilmington office, published an article in the Delaware Business Court Insider titled '''Chancery Court Addresses Section 220 Demands on Close Corporations.'' This article discusses Jefferson v. Dominion Holdings and the principles of Section 220.

'Ministerial Acts' Exception Applies to Corrected Judgment Order [Delaware Business Court Insider]

November 12, 2014

Barry M. Klayman and Mark E. Felger, members in the firm's Wilmington office, published an article in the Delaware Business Court Insider titled, '''Ministerial Acts' Exception Applies to Corrected Judgment Order.'' This article discusses the Delaware Superior Court's recent decision in Universal Music Investments v. Exigen Ltd., C.A. No. N13C-10-300-FSS (Del. Super. Aug. 25, 2014), which explores the effect of the automatic bankruptcy stay on an order correcting a mistake in a prior order. The decision also discussed whether a guarantor is in privity with the primary obligor for res judicata purposes.

Potential Claimants Get 'Redo' on Adequacy of Bar Date Notice [Delaware Business Court Insider]

October 08, 2014

What constitutes constitutionally adequate notice to a debtor's unknown creditors of the deadline for filing proofs of claim? In White v. Jacobs (In re New Century TRS Holdings), Civ. No. 13-1719-SLR (D. Del. Aug. 19, 2014), the U.S. District Court for the District of Delaware concluded that the adequacy of the notice provided to unknown creditors had not been meaningfully explored by the bankruptcy court and likely was not reasonably calculated to apprise them of the bar date.

Claims of Branding, Acquisition and Control Satisfy Single-Employer Test [Delaware Business Court Insider]

September 10, 2014

The Worker Adjustment and Retraining Notification Act (WARN Act) was enacted in 1988 to allow workers to adjust to the prospective loss of employment from a plant closing or mass layoff. It requires employers to give affected employees 60 days' advance notice of such events. Employers that violate the WARN Act's notice requirements are liable to the affected workers for each day that notice is not provided up to 60 days. Often, however, plant closings and mass layoffs presage an employer's demise, so workers look to affiliates of the employer, such as a solvent parent or lender, to show that they acted as a "single employer" in making the termination decision and share liability for the WARN Act violation.

Fee Award Nixed After Client Abandons Case [Delaware Business Court Insider]

August 13, 2014

In a neat, short opinion, the Delaware Supreme Court dealt with a situation that the chief justice characterized as "Kafkaesque" at oral argument and "unusual" in the written opinion. In Crothall v. Zimmerman, No. 608, 2013 (Del. June 9, 2014), the court reversed a fee award to plaintiffs’ counsel who had personally intervened in the case below solely for the purpose of seeking attorney fees for the work he had performed in the litigation after the plaintiff had abandoned the lawsuit prior to the entry of a final judgment. The court held that the plaintiff's former counsel did not create a corporate benefit and was not entitled to attorney fees because the plaintiff did not obtain an authoritative ruling of the Court of Chancery that could create a corporate benefit.

Confidentiality Orders in a Books-and-Records Inspection, Part II [Delaware Business Court Insider]

July 15, 2014

In part I of this article, we discussed how in Quantum Technology Partners IV L.P. v. Ploom, C.A. No. 9054-ML (Del. Ch. May 14, 2014) (Master's Final Report), Master in Chancery Abigail M. LeGrow faced the "unwelcome task" of finding an appropriate middle ground between the extreme positions taken by the parties in a Section 220 action concerning what terms should be included in a confidentiality order in connection with the inspection of corporate books and records where inspection was sought in part to assist the stockholder in marketing its shares.

Confidentiality Orders in a Books-and-Records Inspection, Part I [Delaware Business Court Insider]

July 09, 2014

A minority stockholder in a privately held corporation makes a demand to inspect the books and records of the corporation under Section 220 of the Delaware General Corporation Law. The stockholder states that the purpose of the inspection is to value his shares and to explore a possible sale of the stock. The corporation offers to provide some, but not all, of the requested documents.

Chancery Court Clarifies When Counterclaims Are Advanceable [Delaware Business Court Insider]

June 11, 2014

Harry Pontone, a former officer and director of The York Group and its subsidiary, Milso Industries, was a defendant in an action brought by the two companies and their parent company in federal court in Pennsylvania. The Pennsylvania plaintiffs alleged that Pontone, while still employed by York and Milso, participated in a wrongful scheme to induce several of their employees and many of their customers to switch to their main competitor. They alleged that these actions violated Pontone's employment agreement, which included express noncompete and nonsolicitation covenants, as well as the common law. The Pennsylvania plaintiffs asserted numerous claims against Pontone, including claims for breach of contract, breach of fiduciary duty, tortious interference with contractual relations, unfair competition, and unjust enrichment.

'Own Counsel' Defense Rejected in Awarding Class Counsel Fees [Delaware Business Court Insider]

May 14, 2014

Can a party that retains its own counsel be liable to pay a fee to another party's counsel or to class counsel? The answer, according to the recent Court of Chancery opinion in Smith, Katzenstein & Jenkins v. Fidelity Management & Research, C.A. No. 8066-VCL (Del. Ch. April 16, 2014), is a resounding yes. The court rejected the defendants' "own counsel" defense in an action to recover attorney fees and costs for benefits conferred as a result of the plaintiffs' prosecution and settlement of a class action as contrary to longstanding Delaware precedent dealing with shared causation in the award of fees and expenses when an attorney creates a common fund for, or confers a common benefit upon, a readily ascertainable group.

Superior Court: Champerty, Maintenance 'Alive and Well in Delaware' [Delaware Business Court Insider]

April 23, 2014

The doctrines of champerty and maintenance live on in Delaware, at least for the time being. In Charge Injection Technologies v. E.I. du Pont de Nemours & Co., C.A. No. N07C-12-134-JRJ (Del. Super., Feb. 27, 2014), interlocutory appeal refused, No. 160, 2014 (Del. Apr. 7, 2014), the Superior Court considered whether the doctrines of champerty and maintenance are dead in Delaware and held that, absent a ruling to that effect from the Delaware Supreme Court, it would continue to recognize the doctrines.

The Interpretation of Contractual Survival Clauses [Delaware Business Court Insider]

March 12, 2014

Barry Klayman and Mark Felger, members of Cozen O'Connor's Bankruptcy, Insolvency & Restructuring Department, continue their discussion of the interpretation of survival clauses for contractual representations and warranties under Delaware law with a second article on the subject in The Delaware Business Court Insider. They note the court's surprising view on reps and warranties that the parties expressly agree are to survive indefinitely.

Interpretation of Contractual Survival Clauses Under Del. Law [Delaware Business Court Insider]

February 18, 2014

Agreements, especially acquisition agreements, typically contain representations and warranties by one party to the other. The agreements also typically prescribe the duration of those representations and warranties in so-called survival clauses. The treatment of these clauses under Delaware law may surprise many practitioners. In GRT v. Marathon GTF Technology Ltd., C.A. No. 5571-CS (Del. Ch. Jul. 11, 2011), Delaware Chancery Court Chancellor Leo E. Strine Jr. held that a clause limiting the period of time in which contractual representations and warranties survive closing acts as a statute of limitations on the buyer's ability to commence litigation f or breach.

The Reanimation of a Dissolved Delaware Corporation [Delaware Business Court Insider]

January 16, 2014

When does the life of a Delaware corporation end? Not as long as there are third-party claimants with claims to assert and undistributed assets available to satisfy them. In Anderson v. Krafft-Murphy, No. 85, 2013 (Del. Nov. 26, 2013), asbestos tort claimants in lawsuits pending in other jurisdictions against Krafft-Murphy Co., a dissolved Delaware corporation, sought the appointment of a receiver to enable them to lawfully pursue their claims against the corporation in those other courts beyond the statutory three-year winding-up period. The Court of Chancery had granted summary judgment in favor of the corporation, holding that claims filed more than 10 years after the date of dissolution were time-barred and should be dismissed, and claims filed less than 10 years after the date of dissolution could proceed without a court-appointed receiver.

No Safe Harbor Protection for Triangular Setoff Under Swap Agreement [Delaware Business Court Insider]

December 18, 2013

Does the Bankruptcy Code allow for triangular setoffs in swap and repurchase agreements after commencement of the debtor's bankruptcy case? In Sass v. Barclays Bank (In re American Home Mortgage Holdings), Adv. Proc. No. 11-51851 (CSS) (Del. Bankr. Nov. 8, 2013), the court held that the Bankruptcy Code does not allow parties to set off non-mutual obligations, regardless of whether the agreements are subject to the safe harbor provisions of 11 U.S.C. §§ 559-661.

Electricity Not a Good for Administrative Priority Claims [Delaware Business Court Insider]

November 13, 2013

Is electricity a good for purposes of establishing an administrative priority claim under Section 503(b)(9) of the U.S. Bankruptcy Code? That is the question that U.S. Bankruptcy Judge Christopher Sontchi of the District of Delaware answers in In re NE Opco, Case No. 13-11483 (CSS) (Bankr. D. Del. Nov. 1, 2013). Faced with a split in authority from other jurisdictions and no written opinions on the subject in the U.S. Court of Appeals for the Third Circuit, Sontchi, in a fascinating opinion, holds that electricity is not a good for purposes of Section 503(b)(9).

Director Vacancies Can Be Filled Using Stockholder Vote [Delaware Court Business Insider]

October 09, 2013

The Delaware General Corporation Law, like the business corporation law of most states, provides in Section 223(a) that vacancies on a corporate board can be filled through appointment of new directors by the existing directors unless the certificate of incorporation or bylaws provide otherwise. However, unlike the corporation law in other states, Section 223(c) of the DGCL allows stockholders in certain circumstances to petition the Court of Chancery to direct that a special stockholders' meeting take place in order to fill the vacancies through a stockholder vote. Section 223(c) commits the decision to grant the petition to the discretion of the court.

Laches Decision Reversed 'in the Interest of Justice' [Delaware Business Court Insider]

September 11, 2013

It is not often that the Delaware Supreme Court rejects the specific arguments advanced by an appellant and then decides the matter in the party's favor on grounds not asserted by that party but considered sua sponte by the court. Such was the case in Levey v. Brownstone Asset Management, LP, No. 551, 2012 (Del. Aug. 27, 2013), wherein the court reversed the decision of the Court of Chancery and remanded for further proceedings "in the interest of justice."

Relations-Back Doctrine Applied in Adversary Actions [Delaware Business Court Insider]

August 15, 2013

Two recent bankruptcy cases decided on the same day by the same judge dealt with motions to amend the complaints in preference actions. Both cases illustrate the court's application of the relation-back doctrine, with differing results. Along the way, the court addressed the requirements for proper service and equitable tolling of the statute of limitations

Single Employer Test Emphasizes De Facto Control Factor [Delaware Business Court Insider]

July 10, 2013

Barry Klayman and Mark Felger of the Wilmington office authored an article titled, "Single Employer Test Emphasizes De Facto Control Factor," in the most recent edition of The Delaware Business Court Insider. The article discusses two recent decisions from the Delaware district and bankruptcy courts on a parent corporation's liability under the federal WARN Act for a subsidiary's failure to provide advance notice of employee layoffs. To read the full article, click here.

Definition of Property Limited Under Bankruptcy Code [Delaware Business Court Insider]

June 12, 2013

Barry Klayman and Mark Felger discuss the recent bankruptcy court decision in The Majestic Star Casino LLC v. Barden Development, specifically the case's expansive view of what constituted property of the debtor's estate.

Chancery Affirms Director's Right of Access to Corporate Information [Delaware Business Court Insider]

May 08, 2013

A recent Chancery Court decision underscores the broad scope of a director's right to information, even where he is a plaintiff in litigation action against the corporation. In Kalisman v. Friedman, the court held that a corporation could not assert the attorney-client privilege or work-product doctrine to withhold documents from a director who had been frozen out of the deliberative process on a controversial recapitalization plan.

District of Delaware Federal Court Rejects Say-on-Pay Suit [Delaware Business Court Insider]

April 10, 2013

In Raul v. Rynd, C.A. No. 11-560-LPS (D. Del. Mar. 14, 2013), the U.S. District Court for the District of Delaware dismissed a derivative lawsuit brought on behalf of a Delaware corporation alleging that its board of directors, assisted by the board's compensation consultant, breached fiduciary duties and securities laws by approving compensation to the company's top executives despite the failure of a "say-on-pay" shareholder vote on that compensation. The suit was dismissed for failure to satisfy the pre-suit demand requirement for derivative actions and to state a claim upon which relief may be granted. The court's opinion underscores the strong policy of the Dodd-Frank Act making say-on-pay votes nonbinding.

Summary Judgment Motion Not Preceded by Motion to Compel Akin to Trial by Ambush [Delaware Business Court Insider]

March 13, 2013

On January 2, the Delaware Supreme Court issued a trilogy of cases dealing generally with the issue of whether a case should be dismissed for the attorneys' failure to obey scheduling orders.

Administrative Priority Status Given to Indemnification Obligation Claim [Delaware Business Court Insider]

February 13, 2013

In WM Inland Adjacent LLC v. Mervyn's LLC...the U.S. Bankruptcy Court for the District of Delaware faced a question of first impression: whether a claim arising from an indemnification provision in a nonresidential commercial lease with the debtor, which the debtor rejected post-petition, was entitled to administrative priority under §365(d)(3), or was a pre-petition, general unsecured claim under §502(g).

Supreme Court Upholds Standing of Class Representative Who Sold Shares Before Class Certification [Delaware Business Court Insider]

January 09, 2013

Must a shareholder class representative in a breach of fiduciary duty action own stock in the corporation continuously through the final class certification to have standing to represent the class?

Business Judgment Standard Applies to Transfer of Assets by Foreign Representatives in Chapter 15 Proceeding [Delaware Court Insider]

December 12, 2012

In what the court characterized as an apparent matter of the first impression, U.S. Bankruptcy Judge Christopher S. Sontchi of the District of Delaware considered what legal standard applies in a Chapter 15 case to a transfer of assets located in the United States pursuant to a "global" transaction previously approved by another court in a foreign main proceeding.

Bankruptcy Court Finds No Subject Matter Jurisdiction Over Post-Confirmation Declaratory Judgment Action

November 21, 2012

How far will the bankruptcy court go in exercising post-confirmation jurisdiction in an adversary action based on a pre-petition state law claim?

Chancery Court Blocks Suit to Void Completed Merger as Ultra Vires [Delaware Business Court Insider]

October 10, 2012

Chancery Court Blocks Suit to Void Completed Merger as Ultra Vires - Delaware Business Court Insider - In Southeastern Pennsylvania Transportation Authority v. Volgenau, 2012 WL 4038509 (Del. Ch. Aug. 31. 2012.), Vice Chancellor John W. Noble dismissed a direct action challenging a consummated merger transpiration on the grounds that the merger violated the company's certificate of incorporation and was ultra vires, but left standing a claim for breach of fiduciary duty against the directors of the company for approving the transaction in violation of the certificate of incorporation.

Bankruptcy Court Holds Mechanic's Liens Trimp DIP Liens [Delaware Business Court Insider]

September 12, 2012

Bankruptcy Court Holds Mechanic's Liens Trimp DIP Liens - Delaware Business Court Insider - The bankruptcy court is frequently called upon to consider the priority between and among liens held by debtor in possession (DIP) lenders and pre-petition secured lenders and holders of other pre-petition perfected liens. In , Adv. No. 09-51074 (KJC), decided August 30, the court faces such a conflict.

Chancery Court Loosens Restrictions of Confidentiality Designation, Trusting Lawyers' Good Faith [Delaware Business Court Insider]

August 15, 2012

Chancery Court Loosens Restrictions of Confidentiality Designation, Trusting Lawyers' Good Faith - Delaware Business Court Insider - It is common practice in Chancery Court cases to enter into a stipulated confidentiality order permitting parties to designate certain documents as confidential and to limit their disclosure and use by parties in the pending litigation.

Frequently, the confidentiality orders contain several classifications that can be utilized by the parties to restrict even further the disclosure of certain documents to counsel for the parties or to designated persons.

Safe Harbor Unavailable for Payments to Collateralize Letter of Credit in Bond Redemption [Delaware Business Court Insider]

May 09, 2012

Safe Harbor Unavailable for Payments to Collateralize Letter of Credit in Bond Redemption - Delaware Business Court Insider -

Nondebtor Parent's Revocation of S Corporate Election Held To Be Void [Delaware Business Court Insider]

March 28, 2012

Nondebtor Parent's Revocation of S Corporate Election Held To Be Void - Delaware Business Court Insider -

Bankruptcy Court Holds Equitable Tolling Doesn't Apply to Look-Back Period [Delaware Business Court Insider]

February 08, 2012

Bankruptcy Court Holds Equitable Tolling Doesn't Apply to Look-Back Period - Delaware Business Court Insider -

Delaware Bankruptcy Court Expounds on Meaning and Significance of Stern [Delaware Business Court Insider]

January 18, 2012

Delaware Bankruptcy Court Expounds on Meaning and Significance of Stern - Delaware Business Court Insider -

Bankruptcy Court Asserts Jurisdiction to Determine Debtor's State Tax Liability [Delaware Business Court Insider]

November 23, 2011

Bankruptcy Court Asserts Jurisdiction to Determine Debtor's State Tax Liability - Delaware Business Court Insider - At a time when practitioners debate the reach of bankruptcy court jurisdiction, the Delaware court continues to assert its jurisdiction in the face
of new challenges. In In re Indianapolis Downs LLC, the U.S. Bankruptcy Court for the District of Delaware held that it had jurisdiction to decide whether a state taxing authority could continue to collect a state tax on part
of the debtor’s revenue from slot-machine wagering. In doing so, the court turned back

Chancery Court Allows LLC Member to Inspect Books and Records of LLC Subsidiary [Delaware Business Court Insider]

October 26, 2011

Chancery Court Allows LLC Member to Inspect Books and Records of LLC Subsidiary – Delaware Business Court Insider – In the Aug. 31 case DFG Wine Co. LLC v. Eight Estates Wine Holdings LLC, the Delaware Court of Chancery considered the question of the right of a limited liability company member to inspect the books and records of the company's subsidiary. In
this post-trial letter opinion, the court granted an LLC member the right to inspect certain books and records of the company's subsidiary

Affirming Creditor's Lack of Derivative Standing, Supreme Court Underscores Plain Meaning of LLC Act [Delaware Business Court Insider]

September 21, 2011

Affirming Creditor's Lack of Derivative Standing, Supreme Court Underscores Plain Meaning of LLC Act - Delaware Business Court Insider - Earlier this month, in CML V LLC v. Bax, the Delaware Supreme Court held that a creditor of an insolvent limited liability company lacks standing under the Delaware Limited Liability Company Act to bring a derivative action against the LLC's former managers. In so doing, the court gave effect to the plain meaning of the LLC Act and drew a sharp distinction between the rights of creditors of insolvent LLCs and those of creditors of insolvent corporations.

Bankruptcy Court Rejects Challenge to Personal Jurisdiction in Preference Case [Delaware Business Court Insider]

July 13, 2011

Bankruptcy Court Rejects Challenge to Personal Jurisdiction in Preference Case - Delaware Business Court Insider - In a June 22 decision in a case of first impression, the Delaware Bankruptcy Court turned back a due process challenge to the exercise of the court's personal jurisdiction over a preference defendant. In In re DBSI Inc., the trustee sought to avoid and recover pre‐petition transfers made to various insiders and
pre‐petition transfers made on behalf of the insiders to the IRS and other taxing authorities.

Bankruptcy Court Rejects Bright- Line Rule for Substantially Contemporaneous Exchange [Delaware Business Court Insider]

June 21, 2011

Bankruptcy Court Rejects Bright- Line Rule for Substantially Contemporaneous Exchange - Delaware Business Court Insider - Bankruptcy Court Judge Kevin Gross, in In re J. Silver Clothing Inc., a 2011 case
out of the District of Delaware, rejected an argument that the 10-day (now 30-
day) period in Bankruptcy Code Section 547(e)(2) provides a bright-line limit as
to whether a transfer is "substantially contemporaneous"

Controversial Fraudulent Conveyance Decision in Tousa Reversed [Bankruptcy, Insolvency & Restructuring Alert!]

February 18, 2011

Controversial Fraudulent Conveyance Decision in Tousa Reversed - Bankruptcy, Insolvency & Restructuring Alert! - In what has validated lenders’ belief in the propriety of a parent corporation’s borrowing based in part on the parent company’s guarantees and assets of its operating subsidiaries, the United States District Court for the Southern District of Florida, on February 11, 2011, reversed the controversial Southern District of Florida Bankruptcy Court’s decision in In re TOUSA, Inc., which dramatically expanded the powers of a bankruptcy trustee to set aside as a

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Practice Areas

Bankruptcy, Insolvency & Restructuring

Complex Litigation

Litigation

Education

Harvard Law School, J.D., cum laude, 1977
Columbia University, B.A., magna cum laude, 1974

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