Concessions and Particularity: How a Derivative Challenge to a Discounted Insider Financing Failed at the Pleading Stage
In the recent decision Marstrand Partners, L.P. v. Israel Biotech Fund I, L.P., C.A. No. 2024-0421-KSJM (Del. Ch. May 27, 2026), Chancellor McCormick dismissed a derivative challenge to a steeply discounted insider financing after holding that the plaintiff failed to plead demand futility under Court of Chancery Rule 23.1. Although the plaintiff disputed the ability of only two directors to consider a demand impartially, the plaintiff failed to plead particularized facts showing either director was conflicted.
Facts, Not Labels: The Limits of Delaware Notice Pleading
In Caerus Group, LLC v. Chemicar Europe NV, No. 2025-0393-BWD, 2026 WL 668208 (Del. Ch. Mar. 10, 2026), the Delaware Court of Chancery issued a strong reminder that notice pleading does not mean no pleading. Vice Chancellor David dismissed claims arising out of a failed automotive-products joint venture because the pleadings substituted conclusions and speculations for facts and therefore could not pass muster under Rule 12(b)(6). Chemicar underscores that the Court of Chancery will closely scrutinize the level of factual detail provided in determining whether a complaint is viable or merely a conclusory grievance, particularly where standards like entire fairness, gross negligence, or knowing participation are in play. (more…)
Kitchen-Sink Pleading Will Not Fly In Delaware
Vice Chancellor Glasscock recently affirmed in BV Advisory Partners, LLC v. Quantum Computing Inc., C.A. No. 2022-0719-SG, that more is not always better when it comes to pleading claims. In ruling on motions to dismiss filed by all defendants, the Court dismissed six Defendants for failure to plead personal jurisdiction under Rule 12(b)(2), and also dismissed eight of ten causes of action pled against the remaining Defendants for failure to state a claim under Rule 12(b)(6). In each of the Court’s holdings dismissing both Defendants and causes of action (summarized below), the Court identified the various ways in which Plaintiff relied to its detriment on conclusory allegations and impermissible bootstrapping. This ruling serves as a reminder to litigants that the Court of Chancery is well-equipped to strip down complaints bloated by tangential claims and theories of liability that are not sufficiently supported by alleged facts.
