Here are four things you must know before you go.
1. The Court of Chancery has only seven judges
That’s right, just seven: the Chancellor and six Vice Chancellors. They are appointed by the Governor of Delaware and confirmed by the state Senate. Trials in the Court of Chancery are heard by individual members of the Court: there is no jury, nor is the decision voted upon by a panel of judges or by the full Court. If you bring a case to the Court of Chancery, one member of the Court will hear that case and make the ruling.
2. The judges are experts
The Delaware Court of Chancery is best known for hearing corporate conflicts, fiduciary disputes, and cases involving mergers and acquisitions. Some types of business litigation matters that arrive in the Court of Chancery include:
- Breach of fiduciary duty
- Disputes over the control or composition of a board of directors
- Books and records demands (that is, demands by shareholders to inspect the company’s books)
- Appraisal actions (that is, determining the fair value of shares to be “cashed out”)
- Disputes involving closely held companies
- Mergers and acquisitions
The members of the Court are all experts on corporate law, which makes cases in the Court of Chancery more predictable than having a dispute resolved elsewhere, often involving juries or judges who sit in generalist courts. Remember: members of the Court of Chancery develop deep expertise. Your litigation may be relatively new to you, but not to the judge.
3. The members of the Court of Chancery sit “in equity”
The roots of the Delaware Court of Chancery trace back to the English common law system, which featured separate courts to handle “matters of law” and “matters of equity.” During the colonial period, the Court of Chancery was the sole court of equity in England. The Delaware Constitution of 1792 established the Delaware Court of Chancery as the state’s court of equity. The legal term “equity” refers to a type of remedy that allows the court to either stop or compel action, which means the judge’s decision will reflect what is fair in your particular situation.
4. The Delaware legal community is small and closely knit
Attorneys who practice in the Court of Chancery have practical experience that can’t be earned anywhere else. They also understand the “Delaware Way” – a unique, unwritten standard of collegiality and professionalism among Delaware attorneys. So, don’t go in blind. Always work closely with an attorney experienced in Court of Chancery work.
