Advancement obligations can arise when a company asserts affirmative defenses or counterclaims in litigation with former officers and directors. In an August 10, 2026 report in Lipp v. Mixedbread AI, Inc. (which remains subject to final ruling from the Court of Chancery), Magistrate in Chancery David Hume IV considered whether a company can avoid those obligations by changing course after a former officer demands advancement. The report concluded that Mixedbread’s verified interrogatory responses, reinforced by representations in the advancement proceeding, ended advancement for three defenses even without a timely pleading amendment. Advancement was not terminated for a fourth defense because Mixedbread continued to rely on the former officer’s alleged failure to perform his chief technology officer role.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Elizabeth Y. Austinhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngElizabeth Y. Austin2026-10-23 10:34:092026-10-23 10:35:13Lipp v. Mixedbread AI Addresses How a Company Can End an Advancement Obligation
Corporate titles have proliferated. Delaware’s officer-consent statute has not. In Altigen Communications, Inc. v. Day, C.A. No. 2025-1298-JTL (Del. Ch. Aug. 21, 2026), Vice Chancellor J. Travis Laster held that the Delaware Court of Chancery lacked personal jurisdiction over a Utah-based chief strategy officer accused of breaching his fiduciary duties. While Delaware’s Officer Consent Statute, 10 Del. C. § 3114(b), can reach an executive whose title differs from the senior-officer roles listed in the statute—“president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasure or chief accounting officer”—that extended reach will occur only where the executive’s responsibilities functionally equate to or significantly overlap with one of those roles. Altigen’s allegations established that the defendant, Ryan Day, was a senior executive with operational responsibilities, but they did not establish that he functioned as the company’s president, chief executive officer, chief operating officer, or another officer covered by the statute.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2025/05/MN-24015-Enhanced-Scrutiny-Blog-Imagery-Refresh_3.jpg606833Elizabeth Y. Austinhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngElizabeth Y. Austin2026-10-14 09:56:202026-10-14 09:56:20The C-Suite Is Not a Jurisdictional Catchall: Court of Chancery Clarifies Delaware’s Officer-Consent Statute
M&A agreements routinely send disputes over earnouts and purchase-price adjustments to an independent accountant, and, as this blog has discussed before, the parties then fight over how much the accountant can decide. Earlier this year, in Fortis Advisors, LLC v. Stillfront Midco AB, 361 A.3d 43 (Del. 2026), the Delaware Supreme Court affirmed an order compelling a seller to bring its covenant and information-rights claims before an accountant that the merger agreement designated as an “Arbitrator.” See our coverage of that decision here.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Robert S. Velevishttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngRobert S. Velevis2026-10-08 15:01:052026-10-08 15:01:05Still Experts After Stillfront: Two Chancery Decisions Confine Independent Accountants to Accounting Disputes
A July 1, 2026 order from the Delaware Court of Chancery provides another insight into the risks of using generative artificial intelligence (“GenAI”) without adequate human review, and highlights the court’s increased focus on organizational controls governing AI use. Although Leiske v. Kidd concerned litigation conduct and the duties of attorneys and law firms rather than directors’ fiduciary duties or corporate AI governance, the order suggests a growing judicial focus on not only individual misuse of AI, but also on the processes, controls, and oversight surrounding how AI is deployed within an organization. That focus reflects themes discussed in our May 2026 post, which examined SDNY’s inquiry into organizational questions arising from the use of ChatGPT in government decision-making.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2023/05/MN-18360_Updated-Enhanced-Scrutiny-Blog-imagery_833x606_32.jpg606833Jaime A. Bartletthttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngJaime A. Bartlett2026-09-24 11:15:282026-09-24 11:15:28How to Win and Still Lose: Delaware Court of Chancery’s Expanding Focus From Individual AI Misuse to Organizational Governance
You join a virtual meeting and a banner appears: The meeting is being transcribed by AI. You scan the attendees, glance at the agenda, and run a quick risk-benefit analysis. Who turned it on? Should I say something? Will someone else? Has everyone consented? Will the transcript be accurate and secure? And is there a risk if the AI transcript and the meeting minutes differ?
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00David A. Gordonhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngDavid A. Gordon2026-09-17 14:10:472026-09-17 14:11:42When the Meeting Minutes and the AI Transcript Don’t Match: Litigation Insights from Delaware Chancery
In Paragon Metals Holdings LLC v. Smith, No. 385, 2025 (Del. July 1, 2026), the Delaware Supreme Court held that a buyer could justifiably rely on representations in an acquisition agreement even though its due diligence failed to uncover information showing those representations were false. The decision confirms that a seller cannot avoid liability for knowingly false representations by arguing that better diligence by the buyer would have revealed the truth.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2024/11/MN-24015-Enhanced-Scrutiny-Blog-Imagery-Refresh_2.jpg606833Jim Ducayethttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngJim Ducayet2026-09-15 09:04:072026-09-14 17:44:49Hiding the Ball Has Consequences: Delaware Supreme Court Reverses on Justifiable Reliance in M&A Fraud Claim
In Drakes Landing Associates, L.P. v. Tilden Park Capital Management, L.P. (Del. Ch. July 29, 2026), the Delaware Court of Chancery confronted an issue of first impression: how, if at all, the Revlon enhanced-scrutiny framework applies when the board of a public benefit corporation (“PBC”) navigates a change-of-control transaction. Revlon directs a board, in a sale-of-control scenario, to obtain the best price reasonably available for stockholders. However, under Section 365(a) of the Delaware General Corporation Law (“DGCL”), directors of a PBC are statutorily obligated to balance stockholders’ pecuniary interests against the interests of other stakeholders and the corporation’s stated public benefit when conducting corporate business.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Ian M. Rosshttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngIan M. Ross2026-09-08 14:44:052026-09-08 14:44:05Court of Chancery Confirms No Price-Maximization Duty on Public Benefit Corporation Directors
Lipp v. Mixedbread AI Addresses How a Company Can End an Advancement Obligation
Advancement obligations can arise when a company asserts affirmative defenses or counterclaims in litigation with former officers and directors. In an August 10, 2026 report in Lipp v. Mixedbread AI, Inc. (which remains subject to final ruling from the Court of Chancery), Magistrate in Chancery David Hume IV considered whether a company can avoid those obligations by changing course after a former officer demands advancement. The report concluded that Mixedbread’s verified interrogatory responses, reinforced by representations in the advancement proceeding, ended advancement for three defenses even without a timely pleading amendment. Advancement was not terminated for a fourth defense because Mixedbread continued to rely on the former officer’s alleged failure to perform his chief technology officer role.
(more…)
Elizabeth Y. Austin
Chicago
laustin@sidley.com
Ryan D. Fane
Chicago
rfane@sidley.com
The C-Suite Is Not a Jurisdictional Catchall: Court of Chancery Clarifies Delaware’s Officer-Consent Statute
Corporate titles have proliferated. Delaware’s officer-consent statute has not. In Altigen Communications, Inc. v. Day, C.A. No. 2025-1298-JTL (Del. Ch. Aug. 21, 2026), Vice Chancellor J. Travis Laster held that the Delaware Court of Chancery lacked personal jurisdiction over a Utah-based chief strategy officer accused of breaching his fiduciary duties. While Delaware’s Officer Consent Statute, 10 Del. C. § 3114(b), can reach an executive whose title differs from the senior-officer roles listed in the statute—“president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasure or chief accounting officer”—that extended reach will occur only where the executive’s responsibilities functionally equate to or significantly overlap with one of those roles. Altigen’s allegations established that the defendant, Ryan Day, was a senior executive with operational responsibilities, but they did not establish that he functioned as the company’s president, chief executive officer, chief operating officer, or another officer covered by the statute.
(more…)
Elizabeth Y. Austin
Chicago
laustin@sidley.com
Gina R. Bohannon
Chicago
gbohannon@sidley.com
Still Experts After Stillfront: Two Chancery Decisions Confine Independent Accountants to Accounting Disputes
M&A agreements routinely send disputes over earnouts and purchase-price adjustments to an independent accountant, and, as this blog has discussed before, the parties then fight over how much the accountant can decide. Earlier this year, in Fortis Advisors, LLC v. Stillfront Midco AB, 361 A.3d 43 (Del. 2026), the Delaware Supreme Court affirmed an order compelling a seller to bring its covenant and information-rights claims before an accountant that the merger agreement designated as an “Arbitrator.” See our coverage of that decision here.
(more…)
Robert S. Velevis
Dallas
rvelevis@sidley.com
Chaddy Georges
San Francisco
cgeorges@sidley.com
How to Win and Still Lose: Delaware Court of Chancery’s Expanding Focus From Individual AI Misuse to Organizational Governance
A July 1, 2026 order from the Delaware Court of Chancery provides another insight into the risks of using generative artificial intelligence (“GenAI”) without adequate human review, and highlights the court’s increased focus on organizational controls governing AI use. Although Leiske v. Kidd concerned litigation conduct and the duties of attorneys and law firms rather than directors’ fiduciary duties or corporate AI governance, the order suggests a growing judicial focus on not only individual misuse of AI, but also on the processes, controls, and oversight surrounding how AI is deployed within an organization. That focus reflects themes discussed in our May 2026 post, which examined SDNY’s inquiry into organizational questions arising from the use of ChatGPT in government decision-making.
(more…)
Jaime A. Bartlett
San Francisco
jbartlett@sidley.com
Asher J. Zlotnik
New York
asher.zlotnik@sidley.com
When the Meeting Minutes and the AI Transcript Don’t Match: Litigation Insights from Delaware Chancery
You join a virtual meeting and a banner appears: The meeting is being transcribed by AI. You scan the attendees, glance at the agenda, and run a quick risk-benefit analysis. Who turned it on? Should I say something? Will someone else? Has everyone consented? Will the transcript be accurate and secure? And is there a risk if the AI transcript and the meeting minutes differ?
(more…)
David A. Gordon
Chicago
dgordon@sidley.com
Holly J. Gregory
New York
holly.gregory@sidley.com
Takayuki Ono
Chicago, Tokyo
tono@sidley.com
Matt S. Jackson
Chicago
matthew.jackson@sidley.com
Ryan E. Parker
Chicago
ryan.parker@sidley.com
Hiding the Ball Has Consequences: Delaware Supreme Court Reverses on Justifiable Reliance in M&A Fraud Claim
In Paragon Metals Holdings LLC v. Smith, No. 385, 2025 (Del. July 1, 2026), the Delaware Supreme Court held that a buyer could justifiably rely on representations in an acquisition agreement even though its due diligence failed to uncover information showing those representations were false. The decision confirms that a seller cannot avoid liability for knowingly false representations by arguing that better diligence by the buyer would have revealed the truth.
(more…)
Jim Ducayet
Chicago
jducayet@sidley.com
Deborah Sands
New York
dsands@sidley.com
Court of Chancery Confirms No Price-Maximization Duty on Public Benefit Corporation Directors
In Drakes Landing Associates, L.P. v. Tilden Park Capital Management, L.P. (Del. Ch. July 29, 2026), the Delaware Court of Chancery confronted an issue of first impression: how, if at all, the Revlon enhanced-scrutiny framework applies when the board of a public benefit corporation (“PBC”) navigates a change-of-control transaction. Revlon directs a board, in a sale-of-control scenario, to obtain the best price reasonably available for stockholders. However, under Section 365(a) of the Delaware General Corporation Law (“DGCL”), directors of a PBC are statutorily obligated to balance stockholders’ pecuniary interests against the interests of other stakeholders and the corporation’s stated public benefit when conducting corporate business.
(more…)
Ian M. Ross
Miami
iross@sidley.com
Vincent J. Margiotta
New York
vmargiotta@sidley.com
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