Articles Posted in Delaware Court of Chancery

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Petitioners sought a statutory partition of a house and lot owned by Petitioners and Respondent. Respondent objected and brought her objections as a counterclaim in which Respondent requested a private sale of the property and alleged that she was entitled to money from her mother’s estate. The master’s final report issued finding that Respondent had not raised a cognizable defense or counterclaim regarding the statutory partition and that the court lacked jurisdiction over the probate issues. The Court of Chancery affirmed the report in all respects based upon its independent findings of fact and law, holding that the Master correctly recommended that Respondent’s claims be dismissed without prejudice for lack of jurisdiction. View "Collins v. Collins" on Justia Law

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The beneficial owner of a Delaware statutory trust sought to inspect certain of the trust’s books and records. The trust denied the beneficial owner’s request, asserting that the form of the request and the motivations underlying the request were improper. The beneficial owner filed a complaint asserting both a contractual demand and a statutory demand. The Court of Chancery granted the beneficial owner’s motion for summary judgment, holding that the beneficial owner was entitled to inspect, examine, and copy the requested information under its contractual demand. View "Grand Acquisition, LLC v. Passco Indian Springs DST" on Justia Law

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After a beneficial owner (Grand Acquisition) of a Delaware statutory trust sought to inspect certain of the trust's books and records, the trust (Passco Trust) denied the request, arguing that the form of the request and the motivations underlying the request both were improper. The bulk of the parties’ dispute centers on whether the trust agreement incorporates the statutory requirements of 12 Del. C. 3819 and, if so, whether the beneficial owner has satisfied those requirements. In this case, the court concluded that Grand Acquisition is entitled to the requested information under its contractual demand where the owners' right to books and records under the Trust Agreement is not subject to the Delaware Statutory Trust Act's, 12 Del. C. 3801-3826, preconditions and defenses, the owners' right to books and records under the Trust Agreement includes the requested information, and Passco Trust has failed to prove its implied improper purpose defense. Accordingly, The court granted Grand Acquisition's motion for summary judgment and denied Passco Trust's motion for summary judgment. View "Grand Aquisition, LLC v. Passco Indian Springs DST" on Justia Law

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Before Russell Banks died, Russell and his brother, David Banks, owned together fifteen parcels of real estate in Sussex County, Delaware. The granting language of the deed to each parcel stated that the property was conveyed to the brothers as “joint tenants with right of survivorship.” David asserted that this language granted joint tenancies with right of survivorship (WROS) and that the properties passed to him in full upon Russell’s death. Mackie Banks, the executrix of Russell’s estate, filed an inventory for Russell’s estate asserting that the properties were conveyed to the brothers as tenants in common and that the Estate held a fifty percent ownership interest in the properties. David filed a petition to quiet title on the properties. The Court of Chancery granted David’s motion for judgment on the pleadings, holding that the language conveying the property as “joint tenants with right of survivorship” was sufficient to create a joint tenancy WROS and not a tenancy in common. View "Banks v. Banks" on Justia Law

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Bennie Farren died leaving a will under which he bequeathed his former residence and other assets to a trust. The trust contemplated that Patricia McGlaughlin could live in Bennie’s former residence for the remainder of her life. Rebecca Courson, Bennie’s ex-wife, filed a claim against the Estate based on a child support order entered by a Florida court in 1986 and modified in 1987. Andrew Farren, Courson’s biological son and the executor of Bennie’s estate, accepted Courson’s claim as a valid debt of the Estate. Thereafter, Andrew filed a petition to sell Bennie’s former residence to raise additional funds. McGlaughlin opposed Andrew’s petition and also petitioned to remove Andrew as executor. The Court of Chancery (1) granted Andrew’s motion in part, holding that the Florida orders constituted a final judgment entitled to full faith and credit under the federal Constitution but that there was insufficient evidence in the record to consider the facts and equities involved in ordering a sale of Bennie’s residence; and (2) denied McGlaughlin’s motion for summary judgment, holding that the evidence was insufficient to support judgment as a matter of law as to Courson’s claim that Andrew breached his fiduciary duties by accepting his mother’s claim. View "In re Estate of Bennie P. Farren" on Justia Law

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Settlor established a trust (Trust) for the maintenance of two burial lots. The Wilmington and Brandywine Cemetery (the Cemetery) and PNC Bank, N.A. (the Trustee) petitioned to modify the Trust, to direct that three percent of the net asset value of the Trust be distributed annually to the Cemetery for the general maintenance of the Cemetery. Contending that the Trust had a charitable purpose, the Cemetery and Trustee relied on the common law doctrine of cy pres, Delaware's statutory codification of the cy pres doctrine, and the common law doctrine of deviation in seeking modification. The Court of Chancery denied the petition, holding that petition did not provide any basis for modifying the Trust. View "In re Latimer Trust" on Justia Law

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Petitioners in this case were current beneficiaries of seven testamentary trusts. Petitioners sought orders approving the resignations of individual trustees, confirming the appointment of Northern Trust Company of Delaware as the successor corporate trustee for each trust, confirming Delaware as the situs of each trust, reforming the trust, and accepting jurisdiction over the trusts. The Court of Chancery dismissed the petitions, declining to adjudicate this multistate trust matter in deference to the courts which asserted jurisdiction over and had an ongoing supervisory role with respect to the testamentary trusts. Specifically, the Court held (1) the petitions for the 1960 and 1969 trusts should be filed in New Jersey and Texas, if appropriate; and (2) the petition for the 2005 trusts should be filed in the jurisdiction where probate matters were ongoing or refiled with supplemental information in the Court of Chancery. View "In re Peierls Family Testamentary Trusts" on Justia Law

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Petitioners in this case were current beneficiaries of five inter vivos trusts. Seeking declarations designed to cause Delaware to govern the administration of the trusts so they could be reformed to take advantage of features authorized by the Delaware trust statute, Petitioners requested orders approving the resignations of individual trustees, confirming the appointment of Northern Trust Company of Delaware as the sole successor trustee for each trust, and confirming Delaware as the situs of each trust. The Court of Chancery denied the petitions, holding that the petitions failed primarily because Delaware law did not govern the trusts, as each of the trusts affirmatively selected the governing law of a different jurisdiction. View "In re Peierls Family Inter Vivos Trusts" on Justia Law

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Petitioners in this case were the current trustees of a Washington charitable trust. Petitioners petitioned the Court of Chancery for orders (1) approving their resignations, (2) confirming the appointment of Northern Trust Company of Delaware as successor trustee, (3) confirming Delaware as the situs of the trust, (4) determining that Delaware law governs the administration of the trust, (5) accepting jurisdiction over the trust, and (6) reforming the trust to include an array of additional administrative positions. The Court accepted jurisdiction over the trust for the limited purpose of considering the application for reformation and held (1) Petitioners' first four requests sought impermissible advisory opinions, and to the extent the petition sought these declarations, it was dismissed; (2) Petitioners' application for reformation was denied, as Petitioners did not advance any recognized basis for reforming the Trust; and (3) jurisdiction over the trust was not retained. View "In re Ethel F. Peierls Charitable Lead Unitrust" on Justia Law

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This action came before the Court of Chancery on a petition for a decree of distribution in an estate matter. Petitioner and his sister, Respondent, were the intestate heirs of their mother's estate. Ordinarily the estate would be divided evenly between the two of them. Petitioner argued, however, that his sister was not entitled to any additional funds from the estate because (1) she benefited when the estate's property was sold and the proceeds were used to pay off a mortgage she owed on the property, which had the effect of decreasing the amount available in the estate for distribution to the heirs, and (2) Respondent's actions as administratrix depleted the value of the estate. The Court of Chancery ordered that all of the assets in the estate should be distributed to Petitioner, concluding that, after accounting for the benefit Respondent received when the mortgage was paid off, and the loss caused to the estate by the breach of Respondent's fiduciary duties, there were no funds remaining in Respondent's share of the estate. View "In re Riley" on Justia Law