Backer v. Palisades Growth Capital, 246 A.3d 81

Alex Bäcker, majority common stockholder and co‑founder/former CEO of QLess, was removed as CEO in June 2019; charter/stockholder agreements contemplated expanding the board and adding the CEO as a director if Alex ceased to be CEO.
The board hired Kevin Grauman as CEO in September 2019; Alex initially expressed support in communications and asked that Grauman be added to the board email thread and circulate resolutions.
Series A‑1 director Hodong Nam and independent director Ivan Markman resigned (Nam earlier, Markman on Nov. 14, 2019), leaving a three‑person board (Alex, Ricardo Bäcker, Jeff Anderson).
After Markman’s resignation, Alex prepared a secret counter‑agenda (not shared with other directors) to terminate Grauman, appoint himself CEO/director, add consultant Patricio Cuestra as a common director, and amend the bylaws to change quorum rules.
At the Nov. 15, 2019 meeting Alex excluded Grauman, unveiled and passed the counter resolutions over Anderson’s objections, and effectively locked in control; Palisades (majority Series A preferred) filed suit in Chancery seeking to invalidate the actions.
The Court of Chancery held the November 15 actions void in equity because the Bäckers affirmatively deceived Anderson to secure attendance/quorum; the Delaware Supreme Court affirmed.

Issue	Plaintiff's Argument (Palisades)	Defendant's Argument (Bäckers)	Held
Whether Chancery’s finding of affirmative deception was clearly erroneous	Bäckers misrepresented support for Grauman and induced Anderson to attend; equity voids the actions	Evidence does not show deception; court misread emails (e.g., "bod") and rewrote exhibits	Finding of affirmative deception was not clearly erroneous; affirmed
Whether court imposed an equitable advance‑notice requirement for regular meetings	Deception, not meeting type, justifies equitable relief	Court effectively imposed a notice/agenda requirement for regular meetings, contrary to Klassen	Court did not impose an equitable notice rule for regular meetings; relief rested on affirmative misrepresentations
Whether Anderson’s attendance/participation bars equitable relief	Deception justified relief despite attendance	Anderson remained, voted against measures, so per authorities participation defeats relief	Participation defense was waived (not timely raised below); Court did not reach merits; relief stands
Whether equitable relief improperly supplanted Voting Agreement (bootstrapping)	Relief addresses directors’ inequitable conduct, not contractual enforcement	Remedy impermissibly provides extracontractual relief where contract governs	Remedy upheld: Chancery acted on directors’ equitable duties distinct from contractual breach

Schnell v. Chris‑Craft Indus., 285 A.2d 437 (Del. 1971) (equitable principles can make legally permissible acts voidable when exercised inequitably)
Klassen v. Allegro Dev. Corp., 106 A.3d 1035 (Del. 2014) (no default advance‑notice/agenda requirement for regular board meetings)
OptimisCorp v. Waite, 137 A.3d 970 (Del. 2016) (Delaware courts condemn ‘‘Pearl Harbor’’‑style ambushes; value full board deliberation)
In re Invs. Bancorp., 177 A.3d 1208 (Del. 2017) (directorial acts are ‘‘twice‑tested’’—legal authorization and equitable review)
City of Fort Myers Gen. Emps.’ Pension Fund v. Haley, 235 A.3d 702 (Del. 2020) (fiduciary duty of candor; cannot use superior information to mislead co‑fiduciaries)
Nemec v. Shrader, 991 A.2d 1120 (Del. 2010) (contractual obligations govern disputes addressed expressly by contract; caution against ‘‘bootstrapping’’)
RBC Capital Mkts., LLC v. Jervis, 129 A.3d 816 (Del. 2015) (deference to trial court where two permissible views of documentary/testimonial evidence exist)
Cede & Co. v. Technicolor, 758 A.2d 485 (Del. 2000) (factfinding may rest on documentary, testimonial, and inferential evidence)