Biolase, Inc. v. Oracle Partners, L.P.
97 A.3d 1029
Del.2014Background
- Biolase, Inc. is a Delaware public company; Oracle sued under 8 Del. C. § 225 to determine the Biolase board composition.
- Before the February 28, 2014 meeting, Biolase had six directors: Pignatelli, Moll, Nemoy, Talevich, Arrow, and Low.
- Arrow resigned orally at the February 28, 2014 meeting and Clark was appointed to fill the vacancy; Nugent was appointed to fill Low's seat later.
- Pignatelli authorized the press release announcing Arrow's resignation and Clark's appointment; he later opposed Clark’s role after learning Clark aligned with a faction.
- Biolase filed a Form 8-K on March 6, 2014 stating eight directors existed, yet the March 3 press release indicated Arrow and Low had resigned and Clark and Nugent were appointed.
- Court of Chancery held Arrow resigned by oral statement, Low did not resign at the meeting, and Clark was properly appointed; Nugent had no vacancy to fill at the time of his appointment; Oracle’s request for attorneys’ fees was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 141(b) is permissive or mandatory. | Pignatelli argues §141(b) requires written resignation; Oracle. | Biolase argues oral resignations permitted by §141(b). | §141(b) is permissive; oral resignations allowed. |
| Whether Arrow resigned by an oral statement at the February 28, 2014 meeting. | Oracle contends Arrow did resign as of the meeting. | Pignatelli faction argues the resignation was not properly documented. | There was substantial evidence Arrow resigned and Clark was appointed to fill the vacancy. |
| Whether the final judgment denying attorneys’ fees was an abuse of discretion. | Oracle contends fee issue should be decided separately after trial. | Oracle did not preserve a fee argument in trials or post-trial briefs. | No abuse of discretion; fee request was properly denied. |
Key Cases Cited
- Bay City, Inc. v. Williams, 2 A.3d 1060 (Del.2010) (reiterates permissive interpretation of ‘may’ in § 141(b))
- Schock v. Nash, 732 A.2d 217 (Del.1999) (supports oral resignations under § 141(b))
- One-Pie Investments, LLC v. Jackson, 43 A.3d 911 (Del.2012) (judicial interpretation consistent with longstanding § 141(b))