R. Montgomery Donaldson
Partner
R. Montgomery “Monty” Donaldson is a partner in Montgomery McCracken’s Delaware office and Chair of the Business Litigation Practice Group. Monty's practice focuses on business counseling and litigation, with an emphasis on matters involving complex business transactions, corporate governance, securities, and special proceedings under the Delaware General Corporation Law and alternative entity laws. Monty’s litigation practice also involves an array of commercial matters, including commercial contract (such as co-development, licensing, merger and asset sale agreements), intra-organizational disputes (including member, partner and shareholder disputes), joint venture disputes, intellectual property cases, smear campaigns (internal and third party), and business tort cases. Many of these matters are litigated in the federal and state courts of Delaware, including the internationally-recognized Delaware Court of Chancery. In these and other representations, Monty is called upon to serve as primary counsel or as Delaware counsel in coordination with reputable firms located throughout the country and abroad.
Clients have included:
- Corporations (private and publicly-traded), limited liability companies, partnerships, and liquidating trusts
- Officers (including some of the most highly-compensated C-suite executives in the U.S.), boards and director committees
- Sophisticated investors, including founders, family offices, venture capital and private equity
- Joint ventures and co-developers
- Entrepreneurs and their early-stage enterprises
Services provided to these clients have involved consultation where litigation is threatened or in connection with transactions (such as controller transactions and inside funding rounds) implicating nuanced governance issues, the prosecution and defense of direct and derivative breach of fiduciary duty claims, and all manner of commercial disputes, ranging from “busted deals” and funding rounds in venture-backed companies to contract indemnity claims in the context of mergers, divestitures and asset acquisitions. Monty also counsels and oversees special committee processes, from inception through the deliberative process, negotiations and ultimate recommendation.
Monty has provided Delaware legal opinions in the context of both routine and extraordinary transactions. He has published extensively, including most recently in the Delaware Journal of Corporate Law (“Inside Funding Rounds in Venture-Backed Companies: The Perils of ‘Effective Control’”). In collaboration with his corporate and transactional colleagues, Monty has counseled controlling shareholders, minority shareholders who may be deemed to exercise effective control broadly or in connection with a specific transaction, founders, directors and director committees in connection with a wide array of matters, including change in control transactions, funding rounds and internal investigations.
Monty served as lead counsel under the provisions of the Private Securities Litigation Reform Act of 1995, representing institutional investors and shareholder classes in, among others, In re Dollar General Sec. Litig. and In re DaimlerChrysler Sec. Litig., the latter concerning the 1998 trans-Atlantic merger of Chrysler Corporation and Daimler-Benz AG. The settlements obtained in some of the cases in which Monty has been involved were among the largest obtained in comparable securities litigation. In addition to class claims, Monty represented a $120 billion state pension fund in opt-out litigation arising from a $58 billion merger creating at the time the largest U.S. banking operation. This matter settled at a substantial premium over the per share settlement obtained on behalf of the class.
Monty was lead trial counsel in the widely-publicized Basho Technologies litigation (Basho Tech. Holdco B, LLC v. Georgetown Basho Inv., LLC, 2018 WL 3326693 (Del. Ch. July 6, 2018)). There, Monty and his trial team represented Basho’s co-founder, former CEO and Chairman of the Board and numerous affiliated investment entities. Monty’s clients claimed that a venture capital investor and its board designees committed serial breaches of fiduciary duty to secure majority control over and extract value from Basho (a data software technology company), ultimately causing the company to fail. Delaware Court of Chancery Vice Chancellor J. Travis Laster’s 126-page post-trial opinion (affirmed on appeal) strongly condemned the actions taken by Basho’s controller, and awarded $20 million in damages to Monty’s clients.
Further demonstrating the breadth of his experience, Monty was one of three attorneys representing a team of distinguished scientists who successfully challenged the U.S. government's intended disposition of 9,000 year-old human remains in the internationally-publicized "Kennewick Man" litigation, featured on NOVA ("Mystery of the First Americans") and the Discovery Channel ("Discover Magazine: The Earliest Immigrants"). He since has represented the Ethnic Minority Council of America in the equally controversial "Spirit Cave Mummy” litigation in the Federal District of Nevada.
Monty received his J.D. from Dickinson School of Law where he was Senior Editor of the Dickinson Law Review and a member of the Appellate Moot Court Board. He earned his B.A. degree from Bucknell University.
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1 of 5 Credentials
Selected Representations Business Litigation
- Basho Tech. Holdco B, LLC v. Georgetown Basho Inv., LLC, 2018 WL 3326693 (Del. Ch. July 6, 2018) (representation of co-founder, former CEO and Chairman of the Board and affiliated investment entities in prosecuting fiduciary duty claims against VC investor and board designees)
- AIG Corp. Consol. Derivative Litig., C.A. No. 769-N (Del. Ch. 2004) (defense of former CEO of Gen Re in connection with shareholder derivative claims)
- Ortsman v. ADESA, et al., C.A. No. 2670-VCL (Del. Ch. 2007) (representation of Adesa’s CEO, COB and CFO against shareholder breach of fiduciary duty claims arising from private equity acquisition transaction)
- In re Compucom Systems, Inc. Stockholders Litig., C.A. No. 499-N, 2005 WL 2481325 (Del. Ch. Sept 29, 2005) (defense of special committee in connection with shareholder breach of fiduciary duty claims)
- Teachers’ Retirement System of Louisiana v. Scrushy, C.A. No. 20529, 2004 WL 423122 (Del.Ch. March 2, 2004) (defense of former HealthSouth director in connection with direct and derivative shareholder claims)
- Blackthorn Partners, L.P. v. Malone (Del. Ch. 2010) (representation of Thomson Reuters Lipper Hedge Fund Award recipient in connection with breach of fiduciary duty claims arising from sale of Liberty Media business unit to DirecTV)
- In re Cal-Maine Foods, Inc. Shareholders Litig., C.A. No. 20507 (Del. Ch. 2003) (representation of sophisticated shareholder group challenging proposed freeze-out transaction)
- Miron v. Microsoft Corp., et al., C.A. No. 1149-CC (Del. Ch. 2005) (defense of corporation and board designees in connection with direct and derivative shareholder claims)
- Encompass Services Holding Corp. v. Prosero Inc., C.A. No. 578-N, 2005 WL 332810 (Del. Ch. Feb. 3, 2005) (statutory shareholder appraisal action)
- Sicking v. JetStar Holdings, Inc., C.A. No. 2232-N (Del. Ch. 2006) (statutory shareholder appraisal action)
Commercial Litigation
- Julius W. Erving II v. ABG Intermediate Holdings 2, LLC, et al., No. 2021-0816-NAC (Del. Ch. 2023) (claims alleging breach of brand development and marketing contracts)
- Jack v. Jack Acquisitions, Inc., et al., No. 19-0052-CFC (Del. Sup. 2020) (assignment and indemnity disputes arising under stock purchase agreement)
- Southco, Inc. v. Penn Engineering and Manufacturing Corp., No. 1:10-CV-00003-LPS (D. Del. 2010) (patent infringement and invalidity claims)
- Winchester Carpet & Rug Co. v. WebVention Holdings LLC, No. 11-00337-GMS (D. Del. 2011) (patent non-infringement action)
- Redwood Regional Medical Group v. CCE Partners, LLC, No. 6273-VCS (Del. Ch. 2010) (LLC member dispute involving direct and derivative claims)
- Philip A. Templeton, M.D., P.A. v. EmCare, Inc., No. 11-CV-00808-SSR (D. Del. 2011) (declaration of rights under membership interest purchase agreement)
- Olson v. Microsoft Corp., et al., C.A. No. 06C-01-355 (Del. Super. 2006) (defense of corporation in connection with contractual employment claims)
- CertainTeed Corp. v. Celotex Corp., C.A. No. 471-N (Del. Ch. 2004) (defense of seller corporation and related entities in connection with claims arising from asset acquisition transaction)
- Trull v. Microsoft Corp., C.A. No. 97CH3140 (Cook Co., Ill., Chanc. Div. 1997) (defense of corporation against consumer class action)
General Business
- Process and risk management consulting in connection with both routine and extraordinary transactions
- Recommendation, implementation, and oversight of prophylactic measures such as recusal and special committee processes in the context of private equity (“going private”) acquisitions, reverse stock splits, funding rounds, recapitalizations and a wide array of interested or controlling shareholder transactions
- Internal investigations of potential director or officer misconduct
Cultural Antiquities/North American Indian Law
- Co-representation of scientists in successfully challenging federal government’s intended disposition of nine-thousand-year-old human remains in the internationally publicized “Kennewick Man” litigation, featured on NOVA (“Mystery of the First Americans”) and the Discovery Channel (“Discover Magazine: The Earliest Immigrants”)
- Representation of Ethnic Minority Council of America in supporting Bureau of Land Management’s decision against repatriating ancient mummified remains and cultural items in “Spirit Cave Mummy” litigation held in Federal District Court for the District of Nevada
Selected Speaking Engagements - Presenter, “The Allure of the First State: Delaware as a Preferred Organizational Situs,” Business Law Institute, 2016
- Presenter, “The Allure of the First State: A Brief Overview of Delaware’s Preeminence as a Business Formation Situs,” State Bar of Arizona Annual Convention, June 2017
- Co-Chair and Presenter, “Recent Developments in Delaware Corporate and Alternative Entity Law,” Corporation Law Section of the Delaware State Bar Association, May 2012
- Presenter, Webinar series on M&A Litigation; 8 multi-topic webinar presentations, October 2015 through October 2016
- Co-Chair and Presenter, “Recent Developments in Delaware Corporate and Alternative Entity Law,” Corporation Law Section of the Delaware State Bar Association, May 2011
- Co-Chair and Presenter, “Recent Developments in Delaware Corporate and Alternative Entity Law,” Corporation Law Section of the Delaware State Bar Association, April 2010
Selected Publications - Author, “Important Ruling: Delaware Court of Chancery Recognizes Officer Disclosure Duty in Squeeze-Out Transaction Involving Neither Minority Nor Appraisal Rights,” October 2023
- Co-Author, “Important Ruling: Delaware Court of Chancery Declines to Extend Corwin Protection to Post-Closing Unocal Claims for Injunctive Relief,” June 2023
- Author, “Important Ruling: Delaware Court of Chancery Formally Recognizes and Delineates Oversight Duties of Corporate Officers,” January 2023
- Co-Author, “Legislation Enacted: Critical Amendment to DGCL §102(b)(7) Expanding Exculpation to Delaware Corporate Officers,” August 2022
- Co-Author, “Take Note: Potentially Critical Amendment to DGCL §102(b)(7) Expanding Exculpation to Corporate Officers Under Consideration in Delaware,” April 2022
- Quoted, “Slights To Leave Creative Legacy At Delaware Chancery Court,” Law 360, January 2022
- Co-Author, “Delaware Supreme Court Announces Key Changes to Standing Doctrines in Derivative Shareholder Litigation,” September 2021
- Author, “Coster v. UIP Companies, Inc.: Delaware Supreme Court Reminds That Entire Fairness Is Not A Ticket To Ride Where Critical Stockholder Rights Impaired,” Deal Points Volume XXVI, July 2021
- Co-Author, “Stockholder Books and Records Actions: Delaware Supreme Court Levels the Playing Field for Stockholders Seeking to Investigate Malfeasance,” December 2020
- Co-Author, “Del. Jarden Ruling Shows Appraisal Precedent Is Not Inflexible,” Law360, July 2020
- Co-Author, “Delaware Supreme Court Underscores Trial Court’s Wide Latitude in Determining Fair Value,” Law 360, July 2020
- Mentioned, “Litigation Attorney Returns to Montgomery McCracken as Partner,” Delaware Law Weekly, June 2020
- Quoted, “Montgomery McCracken Welcomes Back Seasoned Partner,” Law360, June 2020
- Author, “Inside Funding Rounds in Venture-Backed Companies: The Perils of “Effective Control,”” Delaware Journal of Corporate Law, 2019
- Author, “Disclosures Still Important: Delaware Court of Chancery Assesses Adequacy of Proxy Disclosures in Rejecting Pleading-Stage Application of Corwin Defense,” Client and Counsel Alert, July 2019
- Author, “Delaware Court of Chancery Underscores Importance of Contracting Ahead of Time to Preserve the Seller’s Attorney-Client Privilege in Post-Merger Litigation,” Client and Counsel Alert, May 2019
- Author, “Delaware Court of Chancery Extends Business Judgment Deference to Controller-Driven Stock Reclassification Transaction,” Client and Counsel Alert, January 2018
- Author, “Delaware Court of Chancery Rejects Lawyer-Driven Stockholder Books and Records Demand in Wilkinson v. Schulman,” Client and Counsel Alert, December 2017
- Author, “Further Clarification from Delaware Supreme Court on Deal Price in Statutory Appraisal Actions,” Client and Counsel Alert, August 2017
- Author, “Supermajority Director Removal Bylaw Is Unlawful,” Client and Counsel Alert, February 2017
- Author, “Equity Offers No Forgiveness if Statutes are Skirted,” Delaware Law Weekly, December 2010
- Author, “Managing Conflicts of Interest and Attendant Litigation Risks in the Brave New World of Private Equity Acquisitions,” Financier Worldwide, July 2007
- Author, “Managing Conflicts of Interest and Mitigating Litigation Risks in Private Equity Transactions,” The Legal Intelligencer, November 2007
- Author, “The Court Bars Derivative Claims Against Third Party Conspirators,” Delaware Law Weekly, July 2009
- Author, “Mapping Delaware’s Elusive Divide: Clarification and Further Movement Toward a Merits-based Analysis for Distinguishing Derivative and Direct Claims in Agostino v. Hicks and Tooley v. Donaldson, Lufkin & Janrette, Inc.,” Delaware Journal of Corporate Law, 2005
- Author, “Distinguishing the Derivative From the Direct,” GC Mid-Atlantic, Summer 2004
- Author, “Toward a Merits-Based Analysis of Derivative vs. Direct Claims,” Delaware Law Weekly, April 2004
Professional Activities - Member, Delaware State Bar Association
- Richard S. Rodney Inn of Court
- Corporation Law and Litigation Sections
- Service on Delaware State Bar Association Executive Committee
- Member, Pennsylvania Bar Association (Business Law Section)
