In a case the court itself characterized as “a product of mutual deceit,” Vice Chancellor Will issued a post-trial memorandum opinion in Ami Shafrir Berg v. Shai Bar-Lavi, et al., C.A. No. 2025-0959-LWW (Del. Ch. Mar. 27, 2026), rejecting a plaintiff’s attempt to seize control of Tracki, Inc. through a Section 225 proceeding after trial revealed that the corporate documents on which the plaintiff relied — a written consent and a stock ledger — had been fabricated.

Background

Tracki, Inc. is a Delaware corporation that sells GPS tracking devices under a direct-to-consumer subscription model. The company was incorporated in February 2019 as a vehicle for the “Tracki” brand, which had been developed by Vestigo Technologies Ltd., an Israeli corporation founded by defendant Shai Bar-Lavi. Plaintiff Ami Shafrir Berg managed Tracki’s Amazon sales and marketing operations through his own entity, Totoco, Inc., under a formal consulting agreement that described Tracki as “a subsidiary of Vestigo.”

The dispute centered on who rightfully owned Tracki’s stock. Berg claimed to be Tracki’s sole stockholder based on a purported 2019 written consent that issued all 200 authorized shares to him. On August 20, 2025, Berg generated two additional written consents: the first purporting to remove Bar-Lavi and defendant Saul Bienenfeld from the board and elect Berg as sole director, and the second reducing the board to one member, terminating Bar-Lavi and Bienenfeld as officers, and appointing Berg to all officer positions. Berg then initiated this Section 225 proceeding to obtain judicial confirmation of these actions.

Three Independent Grounds for Rejection

Vice Chancellor Will found that Berg failed to establish his ownership of Tracki on multiple independent grounds.

First, forensic expert testimony demonstrated that the 2019 written consent was fabricated. The defendants’ expert identified font and color anomalies in the document and ran a side-by-side comparison showing that the 2019 consent was created using a later-drafted 2020 written consent — first created on July 9, 2020 — as a template. The portions granting authority to Berg were the only differences between the two documents, written in a distinct CID Type 2 font common to Asian-language character sets. Berg resides in Thailand. The court credited this evidence and found the 2019 documents inauthentic, rejecting Berg’s account that he received them via Skype and stored them on an SD card that he misplaced for years before rediscovering it in an empty suitcase.

Second, even setting aside the forensic evidence, the court found a fundamental corporate law defect. Tracki’s certificate of incorporation did not name initial directors, and no incorporator meeting or written consent was ever held to elect them as required by 8 Del. C. § 108. The 2019 written consent purported to have Bar-Lavi act as Tracki’s “sole director,” but he was never validly elected to that role. Without a lawfully constituted board, the stock issuance was itself invalid.

Third, the court examined Berg’s post-formation conduct as extrinsic evidence and found it fatal to his ownership claim. For years, Berg repeatedly corroborated Vestigo’s ownership of Tracki — in financial documents, bank loan applications, the consulting agreement, and his own filings in Israeli litigation as recently as late 2024, where he described Tracki as a Vestigo subsidiary. The court found Berg’s explanation for these representations — a “secret pact” to hide his ownership because of reputational concerns — implausible.

Because Berg failed to prove he was a stockholder or director, he lacked standing to maintain the Section 225 action, and judgment was entered for the defendants.

Attorneys’ Fees and Mutual Misconduct

Finding that Berg litigated the case in bad faith by relying on fabricated documents, Vice Chancellor Will shifted fees to the defendants. However, the court reduced the award by half to account for the defendants’ own serious misconduct. In particular, Bienenfeld — an attorney barred in New York and Florida — admitted at trial to submitting sworn affidavits to the court containing false statements about Tracki’s governance, conduct the court analogized to perjury. Bienenfeld also admitted to routinely backdating corporate documents, including the 2020 written consent and multiple sets of bylaws.

Practical Implications

This decision underscores that the Court of Chancery takes the integrity of corporate records seriously. Parties who fabricate written consents, stock ledgers, or other corporate documents to manufacture standing in a Section 225 proceeding face not only the loss of their claims but also fee-shifting for bad faith litigation. But the case also highlights a more routine pitfall: even facially valid corporate documents can fail if underlying statutory formalities — such as the election of initial directors under Section 108 — were never observed. As I previously discussed in my overview of Section 225 of the DGCL, these summary proceedings provide a swift mechanism for resolving corporate control disputes, but that mechanism depends on both the authenticity and the legal validity of the underlying corporate records.

The partial fee reduction is also noteworthy. Even when one party’s misconduct is clear-cut, the Court of Chancery will examine the conduct of all parties — including whether attorneys submitted false sworn statements — and may adjust fee awards accordingly.