285 A.3d 143
Del. Ch.2022Background
- P3 Health Group Holdings, LLC (P3) was a Delaware LLC controlled by private equity fund Chicago Pacific; Hudson Vegas was a minority investor.
- Mathur, a Chicago Pacific principal, held no formal title at P3 but led and directed substantial aspects of a proposed de‑SPAC merger (negotiations, advisor instructions, capitalization/Pipe and tax structuring, document control).
- Hudson withheld consent to the Original Deal Structure because it would have triggered its contractual consent rights; Chicago Pacific/P3 restructured the deal to exclude Hudson (the New Deal Structure).
- Hudson sued after the merger closed, alleging Mathur tortiously interfered with Hudson’s contractual rights under the LLC Agreement (Count XI).
- Mathur moved to dismiss under Court of Chancery Rule 12(b)(2), contesting personal jurisdiction and arguing he was not a manager subject to service under 6 Del. C. §18‑109(a).
- The court analyzed whether Mathur could be served as an "acting manager" under §18‑109(a) (and alternatively under the long‑arm statute) and whether exercising jurisdiction comported with due process.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §18‑109(a) permits service on Mathur as an "acting manager" | Mathur materially participated in P3’s management of the merger and thus may be served as an acting manager | Mathur had no formal role; participation must be deeper to confer manager status | Court: At pleading stage, facts support inference Mathur materially participated; service under §18‑109(a) proper |
| Whether absence of any formal title precludes acting‑manager status | Formal title not required; substance over form; precedent permits treating non‑titled actors as de facto managers | Mathur: lack of official role distinguishes him from typical acting managers; reliance on cases declining jurisdiction | Court: No formal title required; factual control and instructions to advisors suffice to show acting manager/de facto manager |
| Whether exercising jurisdiction over Mathur satisfies due process/minimum contacts | Mathur’s managerial acts were central to P3 (a Delaware LLC); Delaware has strong interest; suit concerns internal affairs governed by Delaware law | Mathur: insufficient contacts with Delaware; inconvenient or improper forum | Court: Due process satisfied—claims arise from acts tied to a Delaware entity; forum appropriate |
| Whether Delaware long‑arm (§3104(c)) supplies alternate jurisdictional basis | Filing the certificate of merger in Delaware is a jurisdictional act supporting jurisdiction under §3104(c) | (Implicit) additional jurisdictional acts are required or insufficient contacts | Court: §3104(c) provides an alternative basis (consistent with prior decision) |
Key Cases Cited
- Ryan v. Gifford, 935 A.2d 258 (Del. Ch. 2007) (plaintiff bears burden to show basis for court's jurisdiction)
- Matthew v. Fläkt Woods Gp. SA, 56 A.3d 1023 (Del. 2012) (two‑part personal jurisdiction inquiry: valid service and minimum contacts)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (minimum contacts/due process standard)
- AeroGlobal Capital Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428 (Del. 2005) (forum contacts and fair play factors for Delaware jurisdiction)
- Assist Stock Mgmt., L.L.C. v. Rosheim, 753 A.2d 974 (Del. Ch. 2000) (Delaware's strong interest in adjudicating internal‑affairs disputes of its entities)
- Gatz v. Ponsoldt, 925 A.2d 1265 (Del. 2007) (equity looks to substance over form in evaluating parties' relationships)
- Istituto Bancario Italiano SpA v. Hunter Eng'g Co., 449 A.2d 210 (Del. 1982) (factors for reasonableness in exercising jurisdiction)
- World‑Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (U.S. 1980) (principles on forum convenience and interstate judicial interests)