Crothall v. Zimmerman, 94 A.3d 733

Zimmerman, a common Adhezion Biomedical, LLC unitholder, co-founder, former CEO and former director, filed a derivative suit against Adhezion's directors and two investors who allegedly controlled Adhezion.
He challenged financing transactions and unit issuances, arguing they were substantively unfair and violated the Operating Agreement because issuances lacked a separate-unitholder amendment approval.
Chancery rejected the substantive unfairness claim but held the Operating Agreement violated because issuances lacked a separately voted common unitholder amendment.
Because the breach caused no damages, Chancery awarded only nominal damages of one dollar.
Zimmerman abandoned the suit before final judgment; he sold his units, depriving him of standing to pursue fiduciary claims, and the court dismissed the case for lack of standing.
Zimmerman’s former counsel obtained a fee award, based on a mooted ruling that could have created a corporate benefit, though no final judgment existed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing and dismissal on mootness	Zimmerman retained standing until abandonment; dismissal inappropriate.	Abandonment moots claims and defeats standing; no final judgment for appeal.	No final judgment; standing and mooting prevented corporate benefit analysis.
Attorney’s fees for creating corporate benefit	Counsel created a corporate benefit via the mooted ruling warranting fees.	No corporate benefit since claims were mooted and final judgment never entered.	No entitlement to fees; mooted ruling cannot support a benefit created by abandonment.
Effect of mooted ruling on appealability and issue preclusion	Post-trial opinion could be tested on appeal to create binding interpretation.	No final judgment; issue preclusion cannot attach.	Issue preclusion and appellate testing ineffective due to absence of final judgment.
Robustness of the Operating Agreement interpretation	Operating Agreement ambiguity supported the court’s prior interpretation favoring common unitholder vote.	Posture and trial testimony supported a different reasonable reading.	We decline to address the mooted ruling’s merits; no corporate benefit from counsel’s work.

Zimmerman v. Crothall, 62 A.3d 676 (Del. Ch. 2013) (derivative suit; corporate benefit and attorney’s fee issues)
In re First Interstate Bancorp Consol. S’holder Litig., 756 A.2d 353 (Del. Ch. 1999) (fees where defendants’ actions mooted plaintiffs’ claims and created benefit)
Columbia Casualty Co. v. Playtex FP, Inc., 584 A.2d 1214 (Del. 1991) (claim preclusion/issue preclusion requiring final judgment)
Tyndall v. Tyndall, 238 A.2d 343 (Del. 1968) (preclusion principle, finality requirements)
Fuqua Industries, Inc. S’holder Litig., 752 A.2d 126 (Del. Ch. 1999) (derivative litigation incentives and lawyer conduct)
Bird v. Lida, Inc., 681 A.2d 399 (Del. Ch. 1996) (monitoring incentives and derivative litigation challenges)