Double Jeopardy: Answers to Six Questions About Donald Trump’s Second Impeachment Trial

DEAN FALVY

Dean Falvy, a lecturer at the University of Washington School of Law in Seattle, addresses six key questions about Donald Trump’s second impeachment trial. Falvy provides clear and supported answers to frequently asked questions such as whether the Senate can act to remove Trump from the presidency, whether it can hold a trial after his term expires, who should preside, and whether he will lose his presidential perks.

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Backer v. Palisades Growth Capital

Docket: 156, 2020

Opinion Date: January 15, 2021

Judge: Montgomery-Reeves

Areas of Law: Business Law, Corporate Compliance

Appellant Alex Bäcker was the co-founder and majority common stockholder of QLess, Inc. In June 2019, the Company’s board removed Alex as CEO following an internal investigation into workplace complaints. Alex eventually relented to the change and expressed support for his successor, Kevin Grauman. In the week leading up to the November 15, 2019 board meeting, the Company’s outside counsel circulated board resolutions that, among other things, would appoint Grauman to the board. Alex made a series of statements that collectively represented support for Grauman’s appointment. On the eve of the board meeting, the Company’s independent director unexpectedly resigned, giving Alex a board majority. Alex leapt into action, devising a secret counter agenda to fire Grauman and lock-in Alex’s control of the Company. Alex caught his fellow directors by surprise at the meeting, passing his counter agenda over objections and seizing control of the Company. Palisades Growth Capital II, L.P., the majority owner of the Company’s Series A preferred stock, filed a complaint in the Court of Chancery seeking to reverse Alex’s actions. Following a paper trial, the court held that, even if technically legal, the board’s actions were invalid as a matter of equity because Alex affirmatively deceived a fellow director to establish a quorum. After review of the parties briefs and the record on appeal, the Delaware Supreme Court held the Court of Chancery's finding of affirmative deception was not clearly erroneous. The Supreme Court also held that the Court of Chancery did not impose an equitable notice requirement for regular board meetings, that Appellants failed to properly raise an equitable participation defense below, and that the Court of Chancery did not exercise its equitable powers to grant relief for a de facto breach of contract claim. Accordingly, the Supreme Court affirmed the Court of Chancery’s March 26, 2020 Memorandum Opinion.