Deann M. Totta v. CCSB Financial Corp., a Delaware corporation

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE DEANN M. TOTTA, LAURIE ) MORRISSEY, CHASE WATSON and ) PARK G.P., INC., a Missouri corporation, ) ) Plaintiffs, ) ) v. ) C.A. No. 2021-0173-KSJM ) CCSB FINANCIAL CORP., a Delaware ) corporation, ) ) Defendant. ) ORDER DENYING APPLICATION TO CERTIFY INTERLOCUTORY APPEAL AND REQUEST FOR ENTRY OF PARTIAL FINAL JUDGMENT 1. Defendant CCSB Financial Corporation (“CCSB”) is a holding company that owns a small community bank. The plaintiffs are Park G.P., Inc. (“Park”) and its slate of nominees who stood for election at the CCSB 2021 annual meeting (the “Park Nominees”). In connection with its 2021 director election, CCSB’s incumbent board invoked a provision in its charter that prohibits a stockholder from exercising more than 10% of the company’s voting power in an election (the “Voting Limitation”). The board instructed the inspector of elections not to count any votes above the Voting Limitation that were submitted by Park, the Park Nominees, and an entity affiliated with a nominee’s father. Due to this instruction, the Park Nominees lost the election. The plaintiffs sued under Section 225 of the Delaware General Corporation Law to invalidate the board’s instruction to the inspector of elections. The parties stipulated to trial on a paper record. 2 2. The court ruled in favor of the plaintiffs in a post-trial opinion issued on May 31, 2022 (the “Opinion”). 1 The court issued an order implementing that opinion on July 18, 2022 (the “July 18 Order”), 2 which provided that the Park Nominees won the 2021 election and were directors. 3 In the July 18 Order, the court also reserved jurisdiction to hear an application for an award of attorneys’ fees and expenses for the corporate benefits that the plaintiffs conferred on CCSB and its stockholders. 4 3. Although the July 18 Order retained jurisdiction for the purpose of hearing the plaintiffs’ application for attorneys’ fees, CCSB noticed an appeal on August 16, 2022. 5 The Delaware Supreme Court issued a notice to show cause, directing CCSB to explain why the appeal should not be dismissed for failure to comply with Supreme Court Rule 42. 6 4. CCSB did not first respond to the Supreme Court’s notice to show cause or dismiss its appeal. Instead, on August 19 and 22, CCSB moved for certification of interlocutory appeal (the “Interlocutory Appeal Motion”) 7 and separately sought clarification in the form of a Request for Partial Final Judgment under Court of Chancery 1 C.A. No. 2021-0173-KSJM, Docket (“Dkt.”) 76. 2 Dkt. 92. 3 Id. at 4. 4 Id. 5 Dkt. 94 (“Def.’s Notice of Appeal”). 6 Dkt. 95. 7 Dkt. 97. 3 Rule 54(b) (the “Rule 54(b) Motion”). 8 On August 29, 2022, the plaintiffs filed a joint opposition to CCSB’s Interlocutory Appeal Motion and Rule 54(b) Motion. 9 5. On August 24, 2022, the plaintiffs moved for attorneys’ fees and expenses (the “Fee Petition”). 10 CCSB has not responded to the Fee Petition. 6. Meanwhile, on …

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