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.
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.
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?
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.
Strayed from the Path: Dodiya v. Franklin and the Emerging Rules of the DGCL’s Section 144 Safe Harbors
On August 26, 2026, the Court of Chancery issued Dodiya v. Franklin, C.A. No. 2025-0932-LWW (Del. Ch. Aug. 26, 2026), concluding that the “striking breakdown in corporate governance” detailed in the complaint made the “predictable path to safe harbor” under amended Section 144 of the Delaware General Corporation Law (DGCL) unavailable at the pleading stage. Dodiya’s message for boards is simple: the safe harbors deliver powerful protection, particularly by virtue of the presumption of disinterestedness afforded to directors determined to be independent for listing standard purposes, but only to boards that (i) run a process that is not grossly negligent and (ii) provide materially accurate disclosure to stockholders.
Mind the Gap: Delaware Court of Chancery’s Clarification of the Implied Covenant’s Contractual Gap-Filling Role
Although the implied covenant of good faith and fair dealing applies to nearly every contract governed under Delaware law, many claims alleging its breach fail at the earliest stages of litigation. Even when an implied covenant claim survives such preliminary stages, Delaware courts remain reluctant to permit it to proceed absent a genuine contractual gap. In fact, earlier this year in Johnson & Johnson v. Fortis Advisors – an implied covenant claim that survived through trial intact – the Delaware Supreme Court reversed on appeal, concluding there was no genuine contractual gap to be filled where the contract “repeatedly and expressly conditioned” the earnouts at issue. There, Justice LeGrow explained that the implied covenant applies in two narrow circumstances: (1) when a contract allocates discretionary authority to one party over a central aspect of the contract, and (2) to address unforeseen developments that threatened the bargained-for expectation in the contract, as the Delaware Supreme Court had set forth in Nemec v. Shrader.
Delaware Court of Chancery Draws a Line on Release Conditions in M&A
In a recent post-trial decision, the Delaware Court of Chancery held that a corporation breached its certificate of incorporation by conditioning payment of merger consideration on a stockholder’s execution of a joinder agreement that included a broad release of claims. The court held that the stockholder’s damages were limited to the merger consideration payable under the merger agreement and that prejudgment interest was owed as a matter of right. The decision is a useful reminder for deal lawyers that merger consideration generally should not be used as leverage to obtain a release unless the release is properly supported and enforceable. (more…)
Court of Chancery Rejects Fiduciary Duty and Veil-Piercing Theories in Crypto Case
Earlier this year, the Delaware Court of Chancery dismissed a suit brought by Hash Asset Management, Limited (“Hash”) arising from a failed cryptocurrency investment involving DMA Labs, Inc. (“DMA”), ICHI Foundation, and several individuals allegedly affiliated with those entities. Hash Asset Mgmt. Ltd. v. DMA Labs, Inc., No. 2025-0374-BWD (Del. Ch. Feb. 9, 2026). Vice Chancellor David found the Court of Chancery lacked subject matter jurisdiction because the claim for breach of fiduciary duty and veil-piercing theory was insufficiently pled.
When “The Devil Made Me Do It” Is Not a Defense: Lessons in AI Governance and Organizational Oversight from an SDNY Decision
As companies increasingly integrate generative and agentic AI into core business functions, a May 7, 2026 decision from the United States District Court for the Southern District of New York1 highlights several fundamental guardrails for corporate legal and compliance departments to consider. Although the case arose in the context of government decision-making, the opinion carries broader implications for any entity that embeds generative AI in its processes.
Chancery to Directors: Don’t Play Dirty
The Delaware Court of Chancery recently provided a powerful reminder of the Court’s equitable purpose, and how it will not countenance bad faith or duplicity. In Ghatty v. Mudili et. al., three board members of a five-member board voted at a special board meeting to remove the remaining two directors from their officer positions, and later sued under 8 Del. C. § 225 to seek confirmation that the two directors had been validly removed from their officer roles. The Defendants challenged their removal on a number of grounds. The Court of Chancery considered one argument dispositive: that the meeting notice was inherently deficient because the meeting agenda omitted the removal action effectuated at the meeting, and indeed misleadingly suggested that one Defendant’s officer role would be expanded. The Court condemned the notice as “duplicity,” voided the vote, and held that the Defendants remained officers of the Company.
