A recurring question in deal litigation is when a handful of large investors who roll over their equity in a take-private become a “control group” subject to entire fairness review. In Le Clair v. KnowBe4, Inc., C.A. No. 2024-1143-KSJM (Del. Ch. May 27, 2026), Chancellor Kathaleen St. J. McCormick answered that question against
Fiduciary Duties
When a Board Designee Serves Two Masters: Zync v. Porsche in the Court of Chancery
By Carl D. Neff on
A recurring tension in venture-backed companies is that the investor who funds the business often wants a seat at the board table, and once its designee takes that seat, he or she owes fiduciary duties to the company, not to the investor who put them there. A recent decision from the Court of Chancery shows…
Delaware Court of Chancery Invalidates Board’s Application of a Voting Limitation Pursuant to Company Charter
By Carl D. Neff on
In the decision of Deann M. Totta, et al. v. CCSB Financial Corp., C.A. No. 2021-0173-KSJM (Del. Ch. May 31, 2022), the Court of Chancery held that the board of directors of Defendant, CCSB Financial Corp. (“CCSB”), misapplied a vote aggregation provision in the corporation’s charter that disenfranchised the shareholder Plaintiffs and, furthermore, was…