Harris v. Harris
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In this action brought by Plaintiffs, three out of the five children of Dr. Robert M. Harris and Mary Ellen Harris, who were gifted certain shares of the corporation formed by their father (Company), as tenants of by the entirety, the Court of Chancery deferred a decision on Michael Schwager's motion to dismiss the counts that named him as a defendant, holding that a determination must be made as to whether personal jurisdiction over Schwager existed.
Plaintiffs alleged that as Dr. Harris's health was failing, Mary Ellen and her friends and advised scheme to seize control of the Company and engaged in a series of self-dealing transactions that tunneled millions of dollars out of the Company. Plaintiffs brought claims for breach of fiduciary duty and abetting breaches of fiduciary duty against Mary Ellen and her advisors, including Michael Schwager, challenged a merger that Mary Ellen effectuated to move the company to New Jersey, and argued that Mary Ellen violated the trust agreement. Schwager filed a motion to dismiss the claims against him for lack of personal jurisdiction. The Court of Chancery deferred considering Schwager's motion to dismiss under 12(b)(6) until after the trial court could determine whether jurisdiction over Schwager existed, holding that additional jurisdictional discovery was required.
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