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.
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.
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.
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…)
A Purchase-Price Adjustment Is Not the End of the Road With Indemnification on the Table
In Golden Rule Financial Corporation v. Shareholder Representative Services LLC, the Delaware Court of Chancery held that, following a post-merger purchase-price adjustment that benefited the seller, the buyer may still receive indemnification from the seller for that adjustment payment if the adjustment was caused by a misrepresentation in the agreement or a warranty breach.
Gutterball Claims: Delaware Court Rejects Contract and Fraud Claims in the Face of Fair Disclosures
In a recent post-trial opinion in BBP Holdco, Inc. v. Brunswick Corporation, the Delaware Superior Court addressed an unusual M&A dispute. After a spin off of one of Brunswick’s bowling divisions, the buyers claimed that they had been defrauded not because Brunswick failed to disclose an ongoing regulatory issue, but because Brunswick allegedly failed to disclose enough about the issue, including how it might unfold in the future. The court soundly rejected this theory, holding that Brunswick fulfilled its obligation to fairly disclose the issue in sufficient detail for the buyers to perform their own independent investigation.
Winding Back the Clock: Delaware Supreme Court Clarifies When Fraudulent Concealment Resets a Contractual Limitations Period
The Delaware Supreme Court recently clarified the circumstances when a fraudulent concealment claim will toll a contractual limitations period. In LGM Holdings, LLC v. Gideon Schurder, et al., the sellers of a pharmaceutical business moved to dismiss the buyers’ claims for breaches of the representations and warranties in the parties’ purchase agreement, arguing they were time-barred by a five-year survival period in the agreement’s indemnification provision. The buyers argued that this five-year period should be tolled under the fraudulent concealment doctrine, but the trial court disagreed, dismissing the claim after finding that fraudulent concealment did not toll the survival period because the buyers had learned of the potential claim within that five-year period. The Delaware Supreme Court reversed the dismissal, and in doing so, offered useful guidance for the pleadings requirements for a fraudulent concealment claim and when fraudulent concealment will apply to a contractual limitations period.
Sale of Buyer’s Equity Provides “Good Faith” Justification for Not Earning Earnout
As we have written about in the past, earnout provisions in M&A agreements are often ways to find value and bridge a buyer’s and seller’s differing expectations of the future. But they also are ripe for litigation, especially if the buyer changes the way the business is run or pursues other opportunities that may affect the earnout. Such disputes are highly fact-specific and often turn on the unique issues facing the acquired business. A recent case from the Delaware Court of Chancery illustrates an example of a buyer not having to pay an earnout when its conduct to not enter into new business with a potential customer was influenced by a simultaneous transaction to sell an equity stake in the buyer.
Words Matter: Different Definitions of “Commercially Reasonable Efforts” Lead to Different Results in Drug-Development Earnout Disputes
Acquisitions of biotech companies with development-stage drug candidates often include earnout agreements. The buyer pays the seller’s stockholders with cash or stock upfront, and the seller’s stockholders are entitled to additional payments if the drug or drugs in development reach certain milestones, often culminating in FDA approval or commercialization. Achieving those milestones can take many years and requires the buyer to make substantial investments in clinical trials and regulatory approval. Because the right to earnout payments depends to a significant degree on a buyer’s actions in developing the asset, a seller will seek a provision in the acquisition agreement requiring the buyer to use commercially reasonable efforts in drug development.
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.
