The Delaware Supreme Court recently affirmed a Chancery decision that was highlighted on these pages, which described the limited scope of a summary proceeding under DGCL Section 225 to determine who properly holds a corporate office.

In Barby v. Young, No. 391-2023 Order (Del. June 11, 2024), the high court described that among the limited related topics that can be addressed in connection with determining who properly holds a corporate office, are: the validity of stock issuances, stock transfers, and stock acquisitions to determine which vote should be counted in ascertaining proper board composition. See footnote 2.

The court emphasized that the limited scope of a 225 proceeding cannot include the rescission of a transaction procured through unlawful behavior, which is the type of relief that can only be obtained in a plenary action in a court that has in personam jurisdiction over necessary parties as opposed to an in rem Section 225 proceeding.