Fake Corporate Records, No Control: Court of Chancery Rejects Control Claim Under Section 225
The Delaware Court of Chancery threw out a Section 225 control claim in Berg v. Bar Lavi after determining that the plaintiff’s alleged stock ledger and written consent were fabricated. Expert testimony showed the documents were retro‑fitted using a later template, with font and formatting inconsistencies that undermined their credibility. The court also noted the plaintiff’s own conduct over years reflected no ownership, and a failure to follow basic incorporation formalities meant the alleged stock issuance was invalid. Consequently, the plaintiff lacked standing, and the defendants recovered half of their reasonable attorney’s fees.
Court of Chancery Rejects Fiduciary Duty and Veil-Piercing Theories in Crypto Case
The Delaware Court of Chancery dismissed Hash Asset Management’s lawsuit against DMA Labs and related parties, finding it lacked subject‑matter jurisdiction because the fiduciary‑duty and veil‑piercing claims were insufficiently pled. The court emphasized that commercial relationships between sophisticated parties do...
When “The Devil Made Me Do It” Is Not a Defense: Lessons in AI Governance and Organizational Oversight From an...
A May 7, 2026 Southern District of New York decision rejected the government’s attempt to blame ChatGPT for terminating over 1,400 DEI‑related federal grants. The court found the agency’s AI‑assisted workflow lacked meaningful human oversight, proper prompt design, and documentation, rendering it...
Texas Corporate Litigation Reforms Take Hold: Federal Court Enforces Texas’s 3% Ownership Requirement for Derivative Claims
Texas Senate Bill 29, enacted in 2025, permits corporations with over 500 shareholders to impose a 3% ownership threshold for derivative lawsuits. In the March 2026 decision *Gusinsky v. Reynolds*, a U.S. District Court dismissed a Southwest Airlines shareholder claim...
Who Started It? Delaware Court of Chancery to Address Whether Contacting DOJ Is ‘Initiating’ a Proceeding in Advancement Case
On March 6, 2026 a Delaware Court of Chancery magistrate issued a report in Rushikesh Manche v. MVMT Labs, Inc. that affirmed the former CFO’s right to advancement of legal fees despite the company’s claim he had "initiated" the DOJ investigation into...
Securities Litigation Against Life Sciences Companies: 2025
Securities class actions against publicly traded life‑sciences firms remained steady in 2025, with 44 new filings matching the prior year. Defendants succeeded in 59% of dispositive motions, a rate consistent with historical trends. Pre‑approval product cases enjoyed a higher dismissal...
Bad Investments, Not Bad Faith: Caremark Claims Have Limits
The Delaware Court of Chancery in Marchner v. B. Riley reaffirmed that Caremark claims are limited to situations where directors actually know of legal violations, not merely poor investment outcomes. The court dismissed a shareholder derivative suit because the plaintiff...
Delaware Supreme Court Reinforces the Importance of Precision in Drafting ADR Provisions in Merger Agreements
The Delaware Supreme Court upheld that an arbitration clause covering earn‑out calculations also encompasses bad‑faith claims about those calculations in the Fortis Advisors v. Stillfront merger dispute. The case involved Stillfront’s 2019 $90 million acquisition of Kixeye, with an earn‑out tied...
Activist That Encouraged Merger Only To Change Its Mind Denied “Extraordinary Remedy” Of A Deal Injunction
The Delaware Court of Chancery rejected HoldCo’s request for an injunction to block Comerica’s merger with Fifth Third, finding the deal‑protection provisions lawful and not coercive. HoldCo, which had initially championed the transaction, could not demonstrate a colorable claim or irreparable...
Shareholder Engagement in Flux: Recent Developments and Practical Implications
The SEC’s recent clarification of Rule 14a‑8 reshapes how companies must handle shareholder proposals, while regulators intensify scrutiny of proxy advisors. Concurrently, vote‑no/withhold campaigns and new retail voting programs are gaining traction, adding complexity to the 2026 proxy season. Updated guidance...