Delaware Court of Chancery

Delaware Court of Chancery
Court name	Delaware Court of Chancery
Established	1792
Country	United States
Location	Wilmington, Delaware
Type	Appointment by Governor of Delaware
Authority	Delaware Constitution of 1897
Appeals to	Supreme Court of Delaware
Terms	12 years (chancellors)
Positions	5 (plus masters)

Delaware Court of Chancery

The Delaware Court of Chancery is a state court in Wilmington, Delaware specializing in equity matters, most prominently corporate dispute resolution. Established in 1792 under the Delaware Constitution of 1792 and operating under successive state constitutions including the Delaware Constitution of 1897, it has become central to U.S. corporate litigation involving General Motors, Apple Inc., The Walt Disney Company, Facebook, and countless other corporations. The court's decisions regularly influence jurisprudence cited by the Supreme Court of the United States, the United States Court of Appeals for the Third Circuit, and courts across the United Kingdom.

History

The court traces roots to the English Court of Chancery tradition and the colonial legal structures of Delaware Colony, adopting principles from equity jurisprudence developed in Chancery Division (England), the Court of Chancery of England and Wales, and early American chancery courts such as those in Pennsylvania and New York (state). Its institutional evolution involved interaction with influential figures and institutions including Richard S. Rodney, Henry du Pont, Alfred P. Robinson, and state actors in Dover, Delaware. The court's modern prominence grew in the 20th century alongside the rise of corporate entities like DuPont and Chrysler Corporation, attracting corporate litigants from New York City law firms such as Skadden, Arps, Slate, Meagher & Flom, Cravath, Swaine & Moore, and Wachtell, Lipton, Rosen & Katz.

Jurisdiction and jurisdictional basis

The court exercises exclusive and original jurisdiction over equity cases under statutory frameworks like the Delaware General Corporation Law, fiduciary duty claims between directors and shareholders involving corporations such as ExxonMobil and Berkshire Hathaway, and internal corporate governance disputes arising in entities formed under state statutes like the Delaware Revised Uniform Limited Partnership Act and the Delaware Limited Liability Company Act. Its mandate is grounded in provisions of the Delaware Constitution of 1897 and legislative enactments passed by the Delaware General Assembly. The court adjudicates matters involving fiduciary duties, corporate dissolution, injunctions, specific performance, and contested mergers and acquisitions involving firms such as WarnerMedia, Time Warner, AT&T Inc., and Oracle Corporation.

Structure and organization

The court is headed by the Chancellor (Delaware), assisted by a panel of Vice Chancellor, masters in chancery, and a clerk’s office in Wilmington. Appointments to the bench are made by the Governor of Delaware with confirmation by the Delaware Senate, and chancellors serve fixed terms with practices influenced by models from the Court of Chancery (England), the Supreme Court of Delaware, and federal courts like the United States District Court for the District of Delaware. The court's staff includes court clerks, law librarians, and support personnel who interact with litigants represented by law firms such as Skadden, Arps, Slate, Meagher & Flom and Morris, Nichols, Arsht & Tunnell, as well as corporate counsel from Chevron Corporation, Goldman Sachs, and JPMorgan Chase.

Notable procedures and remedies

The court employs equitable remedies familiar from chancery practice including injunctive relief, specific performance, accounting, and constructive trusts. It frequently decides expedited motions such as preliminary injunctions in proxy fights involving companies like CBS Corporation and Viacom, and uses expedited schedules for disputes over tender offers, freeze-outs, and short-form mergers under provisions of the Delaware General Corporation Law. The court also utilizes special masters and expedited discovery orders in high-stakes matters involving hedge funds like Pershing Square Capital Management and private equity firms such as The Carlyle Group. Its procedural doctrines—such as demand futility analysis and the business judgment rule—interact with standards articulated in cases involving corporate actors like Kodak, Tyco International, and Enron.

Notable cases and impact on corporate law

Landmark opinions from the court have shaped doctrines around fiduciary duty, director independence, disclosure obligations, and merger fairness. Decisions in matters involving Revlon, Inc., Unocal Corporation, and Symington-related jurisprudence influenced takeover defenses and board responsibilities. Key Chancery opinions in mergers—addressing transactions by firms such as The Walt Disney Company and Dell Technologies—have been cited extensively by the Supreme Court of Delaware and commentators from institutions like Harvard Law School, Yale Law School, and Columbia Law School. The court's jurisprudence has affected capital markets, merger negotiations among conglomerates like General Electric and Siemens, and governance norms adopted by institutional investors including BlackRock and Vanguard Group.

Criticism and reform efforts

Critiques have focused on forum shopping for incorporation in Delaware, perceived judicial deference or activism in corporate governance decisions, and the concentration of corporate litigation in a single jurisdiction. Scholars and institutions including The Brookings Institution, American Bar Association, and academics from Stanford Law School and University of Pennsylvania Law School have debated reforms such as expanded transparency, appointment procedures involving the Delaware Judicial Nominating Commission, and statutory amendments to the Delaware General Corporation Law. Legislative and bar association proposals have considered adjustments to case assignment, fee structures involving major firms like Wachtell, Lipton, Rosen & Katz, and measures to address concerns raised in disputes featuring corporations like Facebook and Tesla, Inc..

Category:Courts in Delaware Category:Delaware law