The seal of the Court of Chancery for the State of Delaware is seen on a wall in Georgetown, Delaware, U.S., June 9, 2021. REUTERS/Andrew Kelly
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(Reuters) – It is not easy to irk a Delaware Chancery Court judge so thoroughly that she will order you to pay the other side’s legal fees and costs.
The default rule in Chancery Court litigation, as in most cases in the U.S., is that litigants pay their own way, win or lose. Delaware has developed an exception that shifts fees to losers who have litigated in bad faith, but the bar is exceedingly high.
In case after case, Chancery Court judges have used adjectives such as “stringent,” “arduous” and “egregious” to describe the standard for fee-shifting. It’s not enough to show merely that one side filed a questionable case or litigated aggressively. You have to show, in essence, that the losing side engaged in intentional misconduct.
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Enter cannabis investor Jeff Menashe and his investment vehicle, DG BF LLC.
According to a ruling on Monday from Vice Chancellor Morgan Zurn, Menashe and his investment company filed a fraudulent inducement suit against cannabis company American General Resources LLC in Chancery Court even though Menashe was not actually duped by the company’s alleged misrepresentations — and even though plaintiffs told a New York State Supreme Court judge…
