The Plaintiffs aver that "[e]ntering judgment before ruling on Plaintiffs’ request would have precisely the consequences that Delaware law forbids: Plaintiffs ‘would [be] penalized for bringing a successful claim against the [Defendants] for breach of their fiduciary duty of loyalty.’ " Judgment Response at 11 (quoting William Penn P'ship v. Saliba, 13 A.3d 749, 758-59 (Del. 2011) ). The Plaintiffs assert that there is " ‘just reason for delay,’ " because "Delaware law does not permit such a grossly inequitable result."
Cede & Co. v. Technicolor, Inc., 758 A.2d 485, 491 (Del.2000).William Penn Partnership v. Saliba, 13 A.3d 749, 758 (Del.2011).Id.
6 Del. C. § 18–1101(c). 62. William Penn P'ship v. Saliba, 13 A.3d 749, 756 (Del.2011) (citing Bay Ctr. Apartments Owner, LLC v. Emery Bay PKI, LLC, 2009 WL 1124451, at *8 (Del.Ch. Apr. 20, 2009)).
That the Court of Chancery awards attorney's fees in appropriate cases serves to police corporate conduct generally, not just to control the way corporations litigate. See William Penn P'ship v. Saliba, 13 A.3d 749, 759 (Del. 2011)("The Chancellor's decision to award attorneys' fees and costs was well within his discretion and is supported by Delaware law in order to discourage outright acts of disloyalty by fiduciaries."). Consequently, an award of attorney's fees premised on a pre-litigation breach of a fiduciary's duty of loyalty is substantive and not procedural even though the authority for such an award is the Chancellor's "broad discretionary power to fashion appropriate equitable relief," William Penn P'ship v. Saliba, 13 A.3d at 758, not a statute, the typical source of loser-pays attorney's fees, see Boyd v. Rosene & Assocs. v. Kan. Mun. Gas Agency, 174 F.3d at 1126.
For instance, that routine fee-shifting may discourage wholesome litigation, particularly in cases where an imbalance of resources between parties exists. William Penn P'ship v. Saliba, 13 A.3d 749, 758 (Del. 2011). Weinberger v. UOP, Inc., 517 A.2d 653, 654 (Del. Ch. 1986).
In that situation, some courts have also exercised their discretion to award attorneys' fees and costs. See William Penn P'ship v. Saliba, 13 A.3d 749, 759 (Del. 2011) (affirming chancery court's award of attorneys' fees when plaintiff established breach but could not prove damages); Cline v. Grelock, No. 4046-VCN, 2010 WL 761142, at *2-3 (Del. Ch. Mar. 2, 2010) (awarding costs).
The Plaintiffs insist that Delaware courts " ‘examine the transaction as a whole and both aspects of the test must be satisfied; a party does not meet the entire fairness standard simply by showing that the price fell within a reasonable range that would be considered fair.’ " Response to Motion for Reconsideration at 8 (quoting William Penn Partnership v. Saliba, 13 A.3d 749, 756–57 (Del. 2011) ). The Plaintiffs maintain that Delaware courts accordingly oftentimes conclude that fairly priced transactions are not entirely fair on account of the absence of fair dealing.
Under the American Rule, each party is responsible for its own attorneys' fees regardless of the outcome of the litigation. William Penn P'ship v. Saliba, 13 A.3d 749, 758 (Del. 2011). This default rule is not invariable, and there are several recognized exceptions.
Reis, 28 A.3d at 467 (citing Tremont Corp., 694 A.2d at 432); see also Tremont Corp., 694 A.2d at 432 ("[H]ere, the process is so intertwined with price that under Weinberger's unitary standard a finding that the price negotiated by the Special Committee might have been fair does not save the result."); Gentile III, 2010 WL 2171613, at *9 ("From a tainted process, one should not be surprised if a tainted price emerges."). William Penn P'ship v. Saliba, 13 A.3d 749, 758 (Del. 2011). The parties devote considerable attention in their post-trial briefs to the import of this Court's recent post-trial, entire fairness decision in Trados.
In general, “managers of a Delaware limited liability company owe traditional fiduciary duties of loyalty and care to the members of the LLC.” William Penn P'ship v. Saliba, 13 A.3d 749, 756 (Del. 2011).