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Court of Chancery Addresses the Scope of Summary Control Disputes and Effectiveness of Written Consents

Posted In Case Summaries

Brown v. Kellar, C.A. No. 2018-0687-MTZ (Del. Ch. Dec. 21, 2018)

Control disputes, like those under Section 225 of the DGCL, are summary, narrow proceedings limited to the issues regarding title to office.  The Court of Chancery will not hear or decide “collateral” matters.  Whether something is collateral turns on whether it is necessary to decide it to resolve the claim to office.  That, in turn, depends on the particular facts and claims of the case.  All this is due to the jurisdictional limitations of statutory control disputes as well as the policy of securing prompt resolutions.  In this summary judgment ruling, the Court declines to deem certain defenses collateral that related to the validity of a stockholder consent under equitable principles.  The ruling also addresses when a consent is treated as technically effective under Delaware law, i.e., usually upon delivery.