Leon v. Orlando, C.A. No. 2024-0311-LWW (Del. Ch. June 5, 2024) In an action to determine the rightful manager of a Delaware limited liability company (“the Company”), the Court of Chancery required plaintiff to post a bond to maintain a status quo order that restricts the Company’s transfer of certain shares of stock pending a final determination of who rightfully controls the Company. The Company, a sponsor of a special acquisition vehicle, received the shares as part of a merger with a third-party. The Court required plaintiff to post a bond because the defendants may suffer losses if the stock price declined during the period the status quo order restricted the sale of the shares at issue. The Court set the bond amount based on the closing stock price the trading day before the bond becomes due. Because an amount equal to 100% of a potential loss might be unaffordable for the individual stockholder plaintiff, the Court exercised its equitable discretion to require a bond equal to 10% of the potential loss.
