Delaware Court of Chancery Finds No “Truth” to Minority Shareholder’s Allegations of a Lock-Up Conspiracy by Truth Social Operator, But Does Not Reach Presidential Immunity
In September, the Delaware Court of Chancery dismissed a lawsuit by minority shareholder United Atlantic Ventures, LLC (“UAV”) against Trump Media and Technology Group Corp. (“TMTG”), the operator of social media platform Truth Social, and several other individual Defendants, including President Donald Trump, Devin Nunes, Donald Trump Jr., and Kash Patel. In the 55-page opinion, Vice Chancellor Will found that the Court of Chancery need not decide whether the case should be stayed based on presidential immunity, because all of the claims were incompatible with Delaware law, insufficiently pled “conspiracy theories,” or better suited for Florida state court.
Potential Control Won’t Do: Court of Chancery Confirms Common Law Standards for Actual Control Regarding Challenged Transactions
Recently, in Witmer v. Armistice Capital, LLC, Delaware’s Court of Chancery dismissed a stockholder plaintiff’s derivative suit against Armistice Capital, LLC, a large investor in Aytu Biopharma, Inc., for, among other things, purported breaches of fiduciary duty and aiding and abetting fiduciary breaches, in connection with two transactions for which the plaintiff alleged Aytu overpaid, the investor improperly benefited, and the investor exercised control.
With a Fresh Look at the Facts in Columbia Pipeline, the Delaware Supreme Court Continues to Narrow Aiding and Abetting Liability for Acquirers
On June 17, 2025, the Delaware Supreme Court for the second time in six months reversed a post-trial damages award against an acquiring company accused of aiding and abetting breaches of fiduciary duty by target company management. The June 17 decision is In re Columbia Pipeline Group, Inc., Merger Litigation, 2025 WL 1693491 (Del. June 17, 2025). The earlier decision is In re Mindbody, Inc. Stockholder Litigation, 332 A.3d 349 (Del. 2024).
Plaintiffs Try Their Luck Against Lottery.com SPAC Financial Advisor
This blog frequently has covered SPAC-related litigation (recently, here, here, and here), and the potential consequences of the Delaware Court of Chancery’s rulings in the MultiPlan and Gig3 cases. As discussed previously, the decisions in Multiplan and Gig3, among others, may portend increased litigation surrounding de-SPAC transactions, and particular focus by the plaintiffs’ bar on any actual or perceived conflicts of interest. A relatively recent complaint filed in the Court of Chancery targeting the Lottery.com SPAC deal may represent plaintiffs’ attorneys further widening the net of liability: the case targets not only the SPAC fiduciaries themselves but also the independent financial advisor that purportedly conducted due diligence in connection with the de-SPAC transaction. Financial advisors often are intimately involved in the SPAC process: they help screen which companies are attractive targets for a SPAC merger and, once a target is chosen, conduct diligence to determine that the target is a genuinely good merger partner. The Lottery.com complaint focuses on the financial advisors’ due diligence and on an allegedly conflict-prone compensation structure for those advisors, and alleges liability against an additional (and often deep-pocketed) class of defendant.
