As the Editor-in-Chief of the National Law Review‘s publication called the Delaware Corporate and Commercial Law Monitor, I’m pleased to share the latest edition that has now been published. My role for this publication is in addition to my full-time practice and maintaining this blog–now in its 21st year–as well as upholding my rich family life and participation in various religious, cultural, professional and community organizations.

The Delaware Corporate and Commercial Law Monitor curates articles from many commentators around the country on the titular topic.

By: Chauna A. Abner*

This article first appeared in a recent issue of the Delaware Business Court Insider, and is reproduced here with their kind permission.

The Delaware Court of Chancery recently confirmed that when an LLC’s operating agreement provides that a managing board will manage the company, absent language to the contrary, all decisions must be made by the managing board—even  when the decision is whether to remove two of the three members of the board.

In Ropko v. Burdi, C.A. No. 2024-1193-PAF (Del. Ch. Mar. 16, 2026), two of the three members of McNeil Investment Group, LLC (“MIG”)’s managing board (the “Managers”)  filed suit against the third manager, who was also the Executive Chairman and founder of the company (“Executive Chairman”) after the Executive Charman purported to remove the Managers from the 3-manager board.

As part of a restructuring of MIG, the parties executed a letter agreement (“Voting Agreement”) providing that so long as the Executive Chairman is a member of the Board, actions of the Board will require his consent and the Managers “will vote in the same manner” as him. Two days later, MIG adopted the operative operating agreement which vested management of the company in the Managing Board and provided that the Managing Board consisted of the Managers and the Executive Chairman. Just over a year later, the Executive Chairman issued a written consent purporting to remove the Managers from the Board. The Written consent was signed by the Executive Chairman individually and on behalf of the Managers “pursuant to that certain [Voting] Agreement.”

The Managers filed suit seeking declaratory relief that their removal was improper and attorneys’ fees pursuant to MIG’s operating agreement. After a two-day trial and post-trial briefing, the Court found in favor of the Managers on both issues. The Executive Chairman argued that the Voting Agreement authorized him to vote on the Managers’ behalf in their capacities as members of the Board of Managers. The Court rejected this argument explaining that although the LLC Act allows managers to vote by proxy, an agreement to vote by proxy must include language of “clear agency appointment.” The Court concluded that there was no language in either the operating agreement or the Voting Agreement that authorized the Executive Chairman to act on behalf of the Managers.

The Executive Chairman also argued that, Voting Agreement aside, the formalities associated with the removal should be excused because “a contractual party need not perform a futile act.” The Court rejected this argument too. The Court analyzed the  limited body of case law in Delaware addressing futility in the context of contract compliance and explained that this body of case law has been limited to notice-and-cure provisions that do not apply here. In declining to apply the futility doctrine, the Court reinforced the well-established principle that “[w]hen an alternative entity agreement prescribes how its governing body must act, the governing body may not ignore it. Nor will this court refuse to enforce it merely because on party deems it to be inconvenient.”

After finding that the Executive Chairman violated the operating agreement by purporting to remove the Managers, the Court went on to hold that the Managers were entitled to their reasonable attorneys’ fees and expenses in the litigation pursuant to the fee-shifting provision of the operating agreement.

The Court’s decision provides helpful reminders to practitioners:

  • Proxy instruments must expressly evidence an agency relationship between the principal and proxy holder to be valid;
  • If the intent is for a board of managers to be able to remove board members without requiring the approval of those members, then the operating agreement should clearly state so; and
  • The Court has yet to permit the doctrine of futility to be employed to excuse board governance formalities.

*Chauna is a business and commercial litigation Partner at Lewis Brisbois where she represents clients to resolve a wide range of business disputes in state and federal court and in arbitration. Chauna’s practice focuses on high-stakes disputes of corporations and other forms of entities, stockholders, members of boards of directors, and members and managers of LLCs. She has extensive experience in matters involving demands for books and records, fiduciary duties, and corporate governance.

A recent Delaware Court of Chancery decision determined that the forum clause in the Tesla bylaws, after its redomestication in Texas, requiring derivative suits to be brought in Texas, would be upheld even though the lawsuits at issue were filed shortly before the Tesla shareholders approved the change and despite the suits being filed when the applicable Delaware bylaws required the forum to be Delaware.

In the matter styled In re Tesla, Inc. Derivative Litigation, Cons., C.A. No. 2024-0631-BWD (Del. Ch. April 13, 2026), the court discussed the established authority permitting forum clauses to be enforced even when adopted for a period of time after the lawsuits at issue were filed.

Brief Background

The derivative litigation at issue was filed at a time when the bylaws of Tesla designated Delaware as the exclusive forum for derivative litigation. After its redomestication, the new Tesla bylaws designated Texas as the exclusive forum for derivative litigation. The lawsuits involved were filed before Tesla’s new bylaws with a Texas forum clause, as approved by their stockholders, became effective.

Highlights of Court’s Analysis

The court recognized that there is precedent for courts to look to later points in time when determining venue, such as when a defendant appears or a time when a movant seeks transfer.

The court refused to second-guess Tesla stockholders’ chosen forum by purporting to weigh the advantages and disadvantages of Texas law and procedure relative to Delaware. The court emphasized that the owners of the corporation voted to require the derivative litigation be filed in a Texas forum and that, based on the present facts, it was not inequitable to enforce their decision.

Key Principles

  • The court recognized that the proper procedural rubric for addressing a motion to dismiss based on a forum selection clause is found in the improper venue provision of Rule 12(b)(3).
  • Forum selection provisions, including corporate bylaws, are presumptively valid and should be specifically enforced unless the resisting party “clearly shows that enforcement would be unreasonable and unjust or that the clause is invalid for such reasons as fraud and overreaching.” Slip op.at 9.
  • The court recited relevant authority recognizing that courts sometimes look to later points in time when determining venue. Slip op. at 13. The court also referred to other jurisdictions applying Delaware law to enforce forum selection clauses adopted after the derivative litigation was filed. Id.
  • The court relied on settled Delaware law that a forum selection bylaw may apply retroactively to cover claims arising from conduct that occurred prior to the adoption of the bylaws. Slip op. at 14.
  • The court explained that:

“a stockholder does not have a vested right to litigate in a particular forum, even for claims arising from past conduct, because the contractual relationship among the directors, officers, and stockholders formed within the statutory framework of the DGCL is, by design, flexible and subject to change in the manner that the DGCL spells out, and investors know about when they purchased stock in a Delaware corporation.”

Slip op. at 14.

  • The court further observed that: “a stockholder should hold the reasonable expectation that the board could adopt such a bylaw at any time, subject to an as-applied challenge.” Id.
  • The court rejected arguments that Section 266(a) of the DGCL was violated, in part because plaintiffs never had any vested rights or an obligation to litigate in a particular forum because as the court instructed: “Our corporate law has long rejected the so-called ‘vested rights’ doctrine, the notion that a corporation’s governing documents cannot be amended in a manner that diminishes or divests pre-existing stockholder rights.” Slip op. at 19.
  • The court also rejected a claim that DGCL Section 115 was violated. Section 115 deals with a prohibition against bylaws prohibiting the filing of internal corporate claims in Delaware, but the court reasoned that Section 115 does not apply in in this matter because the statute governs Delaware corporations and Tesla was not incorporated in Delaware when it adopted the Texas forum bylaw. Slip op. at 21.
  • Finally, the court also rejected the argument, based on the facts of this case, that the Texas bylaw was unreasonable or unjust based on a comparison of Texas and Delaware law because:

Courts are ill-equipped to quantify the cost and benefits of one state’s corporate governance regime over another’s, and attempting to do so risks intruding on the value judgments of state legislatures and directors, as well as stockholders.”

Slip op. at 24 (quoting Maffei v. Palkon, 339 A.3d 705, 743-44 (Del. 2025)). Some citations and quotes omitted.

The Delaware Court of Chancery recently imposed attorneys’ fees in connection with a request for sanctions for violation of a Confidentiality Order in the matter styled Accelerant Twister, LLC v. Marjo, LLC, C.A. No. 2023-0887-LWW (Del. Ch. April 10, 2026).

This short letter ruling followed a prior decision in this case to disqualify a putative expert, based on the court’s finding that there was a “meaningful failure to obey the clear terms” of the governing Confidentiality Order. Slip op. at 2, n.2 (citing transcript of rulings from the bench after a hearing on January 23, 2026).

During that hearing, after briefing, the court found that over 300-pages of confidential material were submitted to a designated expert nearly six months before the expert executed the required undertaking. Id.

The court awarded reasonable attorneys’ fees incurred in “bringing and briefing” the motion for sanctions as a remedy. Id.

Flouting Confidentiality Order

In the prior Bench Ruling, the court found that a conflict of interest provided grounds for disqualification based on the prior representation of one of the parties. The court also found that the Confidentiality Order was flouted by disseminating sensitive material to the putative expert months before he agreed to be bound by it. The award of attorneys’ fees was necessary to cover the time spent to investigate the violation and to litigate the contumacious behavior. Slip op. at 3.

Reasonableness of Fees

After a discussion about the reasonableness of hourly rates, the court concluded that a blended rate of just over $1,000 was reasonable under the circumstances, referring to Rule 1.5 of the Delaware Lawyers’ Rules of Professional Conduct and the economic survey for hourly rates conducted by the American Intellectual Property Law Association. Patent-related issues in this case were integral, and the attorneys who performed the work had specialized skills in various other areas of the law. The partners involved ranged in experience from 12 through 40 years of practice.

This post was prepared by Rae Ra, a corporate and commercial litigation associate in the Delaware office of Lewis Brisbois.

On March 27, 2026, members of the Delaware Court of Chancery, the Register in Chancery, and practitioners gathered for a CLE seminar to discuss best practices in the Court of Chancery.  Topics ranged widely, from filing mechanisms to discovery disputes to sage advice from the Court itself. Regardless of whether one is a beginning litigator or a seasoned practitioner, the CLE offered several helpful tips and reminders.

Below are some highlights that this author found particularly pertinent:

  1. Anticipate both the lifecycle and immediate consequences of the litigation
  • Commencing litigation involves more than just filing the complaint–consider e-discovery considerations that will arise down the road, the litigation hold, the economic rationale for the suit, etc.
  • Anticipate immediate consequences of the suit (e.g., advancement demands from defendant directors).
  • What is the end goal of the client?
  1. The Register in Chancery works tirelessly to ensure dockets are maintained in a clear and consistent manner
  • Everyone should review the Court of Chancery Rules and the Guidelines for Persons Litigating in the Court of Chancery on best practices–this point could not be emphasized enough from both the Court and the RIC.
  • With a staff of less than 20, the RIC works all day to review filings and answer questions from practitioners. The RIC also leaves comments for why a filing was rejected.
  • Case carts are moved physically from floor to floor by the Court staff–consider this when filing unnecessarily voluminous trial exhibits.
  • This is a prestigious docket, and the RIC wants this done right.
  1. This is a court that moves with the pace of business–be clear on actual timelines
  • Chancellor McCormick remarked that the Court moves with the pace of business and expects attorneys to let the Court know what that pace is.
  • When scheduling dates, the Court does NOT hold potential dates–the longer you wait, the more likely available time slots will be filled up.
  1. Clarity really helps to resolve discovery disputes
  • Depending on the complexity of the case, consider whether a discovery mediator or special magistrates may be needed (but they can be expensive)
  • Make sure to fully meet and confer on discovery disputes – be clear on what exactly you’re looking for and why. See if there are misunderstandings that don’t have to end up at Court. The Court sees when a party is asking for everything under the sun, and that hurts that party’s credibility.
  • There may be a resource forthcoming from the Court this year addressing and aggregating bench rulings on discovery disputes – stay tuned!
  1. Remember the Delaware Way
  • Protect your reputation and credibility at all times–treat your fellow practitioners and the Court with professionalism and civility.
  • Anything you write may get in front of the Court, and if you’re mean to the staff, the Court will hear about it.
  1. (Re) Familiarize yourself with the Bluebook
  • Chancellor McCormick noted that correctly cited and bluebooked briefs are another measure of credibility for the Court. The level of attention and detail can make a difference in making your case.

Frank Reynolds, who has been covering Delaware corporate decisions for various national publications for over 40 years, wrote this article.

The full Delaware Supreme Court recently ruled that the federal Employee Retirement Income Act of 1974 does not automatically bar the managers of an investment fund from accessing ERISA assets to defend themselves from state law breach of duty claims in Invictus Global Management, LLC, et al. v. Invictus Special Situations Master I, L.P., Del. Supr., No. 283, 2025 (April 13, 2026).

Justice Karen Valihura’s April 13 opinion on behalf of the en banc Delaware high court agreed with the appellant fiduciaries that (1)  the requested advancement for state-law claims, which is subject to recoupment, would not necessarily relieve ERISA fiduciary duty or responsibility and (2) that advancement is not contingent on a showing of ability to repay under either the fund’s governing documents or ERISA.   Therefore, advancement would not always impermissibly relieve the fund fiduciaries’ duty under ERISA, the high court ruled.

Importantly for D&O insurance and indemnification specialists, the justices pointed to a U.S. Ninth Circuit Court of Appeals opinion in  Johnson v. Couturier 572 F.3d 1067, 1080 (9th Cir. 2009), as to when “advancement may be enjoined under section 410 if (i) there is a likelihood that a fiduciary duty was breached or (ii) the ERISA fiduciary is unable to demonstrate an ability to repay.”  

Any deliberate wrongful acts or gross negligence?   

The justices noted that the Ninth Circuit’s decision in Johnson relied on a determination that the indemnification provisions were likely void under section 1110 if they “clearly ‘purport to relieve’ Defendants from their fiduciary responsibilities under ERISA.”  In that ruling, the Ninth Circuit noted that the indemnification provisions “provide[d] complete indemnity so long as the challenged acts or omissions d[id] not involve deliberate wrongful acts or gross negligence. 

The prudent man standard

The Ninth Circuit determined that the indemnification agreements effectively limit Defendants’ liability under ERISA, “ so long as they do not engage in deliberate violations of the ERISA ‘prudent man’ standard of care.”

Background

Plaintiff Invictus Special Situations Master I, L.P.  was a privately held fund formed to make and hold investments from ERISA. Defendants-appellants are Invictus Global   Management, LLC and Invictus Special Situations I GP, LLC and various individuals associated with them collectively accused of misusing their positions.

In October 2023, the Fund’s controlling limited partners removed Invictus GP and IGM as the Fund’s general partner and management company, respectively, and filed this action for wrongful acts or gross negligence. The Fund sought injunctive and declaratory relief, claiming defendants breached the Partnership Agreement and Management Agreement by withholding information — and approximately $10 million in Fund assets after the Fund removed Invictus GP and IGM as its general partner and management company.

The Chancery decision

The Court of Chancery determined that, based on federal case law and United States Department of Labor guidance, section 1110 renders void any contractual provision that purports to allow an ERISA-regulated plan to indemnify and advance funds to an ERISA fiduciary using plan assets.  The fiduciaries argued that canceled out the right to advancement that Delaware law provided them.

Reversed on appeal

On appeal, the Fund argued that both indemnification and advancement have the exculpatory effect of “abrogating the plan’s right to recovery from the fiduciary for breaches of fiduciary obligations.”

The fiduciaries contended that, “While the rights to indemnification and advancement are correlative, they are still discrete and independent rights, with the latter having a much narrower scope,” but “the ultimate right to keep payments characterized as an ‘advancement’ depends upon whether the former corporate official is entitled to indemnification.”

The high court ruled that, “Any breach of fiduciary duties under ERISA, including breaches of the prudent person standard and per se violations, would constitute non-indemnifiable Disabling Conduct. Thus, the Fund retains the right to recover from Defendants for any ERISA fiduciary duty breaches.”

“The parties have not cited any decision of any court that has applied the relevant provisions of ERISA to bar advancement for expenses incurred in defending claims arising under state law,” the Supreme Court noted.

The Federalist Society prepared a video/podcast that explains what the Court of Chancery is, and what it does, and why it may have some outsized influence within the area of its jurisdiction. The link follows:

https://www.bing.com/videos/riverview/relatedvideo?q=Delaware%20Corporate%20Law%20101&mid=D99A26661EA82B312254D99A26661EA82B312254&ajaxhist=0

A recent Delaware Court of Chancery decision is notable for addressing the nuances of an analysis about whether a Certificate of Cancellation for an LLC should be nullified, in a post-trial opinion styled: In re Reinz Wisconsin Gasket, LLC, C.A. No. 2022-0859-MTZ (Del. Ch. April 2, 2026).

Background

The background of this case includes the prior appointment of a receiver, and another procedural ruling highlighted on these pages. The issue addressed in this decision was whether the dissolution requirements of the LLC Act were correctly followed—and if not, whether the Certificate of Cancellation should be nullified. After a 56-page post-trial decision the court concluded that the applicable provisions of the LLC Act were not violated.

Highlights of Court’s Analysis

The extensive factual and legal details of this decision should be studied, but noteworthy highlights include the following:

  • Unlike the lower standard of good cause that applies to the appointment of a receiver in connection with a dissolution, in order to nullify a Certificate of Cancellation it must be proven by a preponderance of the evidence that the applicable provisions of the LLC Act were violated. See Slip op. at 31 and n. 162.
  • Section 18-804 governs the distribution of a dissolved LLC’s assets. Section 18-804(b)(2) requires a dissolved LLC to “make such provision as will be reasonably likely to be sufficient to provide compensation for any” pending claims.
  • Section 18-804(b)(3) requires the LLC to do the same for foreseeable future claims “likely to arise or become known to the limited liability company within 10 years after the date of dissolution.”
  • The LLC Act provides some flexibility for those tasked with making provision for a dissolved LLC’s claims and obligations but because the statute obligates dissolved LLCs to make provisions for claims only “to the extent of assets”, an LLC “can dissolve in compliance with the LLC Act without making such provisions if it had no assets.” Slip op. at 29.
  • Section 18-203 provides that a Certificate of Cancellation should only be filed “upon the dissolution and the completion of winding up a limited liability company.” Slip op. at 30.
  • If an LLC is not wound up in accordance with the LLC Act, the court “may nullify the Certificate of Cancellation, which effectively revives the LLC and allows claims to be brought by and against it.” Id.
  • The court referred to the corporate analogue of Section 18-805 involving the dissolution of a corporation pursuant to 8 Del. C. § 279. Slip op. at 32 and footnote 167.
  • Section 18-804’s reach is limited: “A litigable claim constitutes an asset of the company insofar as it can reasonably provide for pending or likely claims.” Slip op. at 51.

As an added bonus, the court discussed the requirement for an aiding a abetting claim that includes “quantifiable damages that are logically and reasonably related to a harm or injury.” Slip op. at 55-56.

A recent Chancery decision is blogworthy due to its analysis of an extreme case of spoliation coupled with other bad faith litigation conduct in NICbyte LLC v. Startop Investments, LLC, C.A. No. 2023-0637-NAC (Del. Ch. April 8, 2026).

Initially, I observe that egregious facts such as those offered in this case shed little light on more common situations where spoliation is more nuanced and: (i) is not intentional; (ii) does not include bad faither actions; and (iii) is not clearly prejudicial in terms of not obviously making dispositive evidence unavailable.

I am avoiding the discussion of the detailed factual background and the merits of the case involving the enforceability of loan documents in this thorough 45-page post-trial decision, so I can highlight the spoliation aspects.

Highlights

  • The court described the “vast scale” of the deletion of clearly relevant evidence around the time that discovery requests were served, and also again about the time that a motion to compel was filed. Slip op. at 22-23.
  • Importantly, the court referred to Rule 37(e), which only allows the court to assume that the information lost was unfavorable: if the spoliation was reckless or intended to deprive another party of the use of the information in litigation. Slip op. at 37.
  • The court recited in great detail the extensive and intentional deletion of voluminous electronic communications, as well as forged documents, and lies to the court by some of the parties involved.
  • Fees were shifted as a penalty, in addition to other sanctions such as making adverse inferences.

Although not directly related to spoliation, the court provides a useful recitation of the law relating to actual authority, Slip op. at 31, and apparent authority, Slip op. at 32, as well as the doctrine of in pari delicto at footnote 136, and the difference between void and voidable, footnote 137.

I will be one of the speakers in Houston on April 17 at the Annual National Firearms Law Seminar, the largest gathering of Second Amendment attorneys in the country. The seminar provides a unique opportunity for attorneys, judges, FFLs, and others interested in firearms law to discuss recent developments in the law.

The 2026 seminar will include discussions of the recent cases before the U.S. Supreme Court, other federal and state litigation involving the right to keep and bear arms, updates on the National Firearms Act, Congressional enforcement of the Second Amendment, infringing the Second Amendment by abridging the First Amendment, state constitutional provisions, and artificial intelligence and the practice of law (legal ethics).

I will be speaking about state constitutional litigation, in particular the cases I have litigated over the last two decades or so on this topic. These cases often take many years to wind through the appellate courts and can be quite expensive to litigate.

The Civil Rights Defense Fund helps to defray costs for selected cases they carefully choose from around the country. Details about the seminar are available at https://lawseminar.nradefensefund.org/