2024-0184-LWW
Del. Ch.Sep 2, 2025Background
- UAV (United Atlantic Ventures) contracted in Feb 2021 to advise Legacy TMTG and received an 8.6% equity interest as consideration; UAV’s role included positioning TMTG for a SPAC de‑SPAC transaction.
- Legacy TMTG and SPAC DWAC agreed to merge (Oct 2021 Merger Agreement); DWAC stockholders later approved an amended charter (Second Amended Charter) that imposed a 180‑day post‑closing lock‑up on shares issued to Legacy TMTG stockholders.
- DWAC stockholders voted to adopt the Second Amended Charter (including the Lock‑Up) on March 22, 2024; the Certificate of Merger filed on March 25 was followed minutes later by filing of the Second Amended Charter; UAV received New TMTG shares subject to restrictive legends.
- UAV sued in Delaware challenging the Lock‑Up under 8 Del. C. §§ 202 and 151 and asserting related fiduciary‑duty, aiding‑and‑abetting, and conspiracy claims; UAV also sought declarations about the Services Agreement. New TMTG brought parallel actions in Florida.
- Court dismissed Counts I–V (Lock‑Up and related fiduciary/conspiracy claims) with prejudice for failure to state a claim; Counts VI–VII (Services Agreement declaratory claims) were dismissed without prejudice for improper venue under the Services Agreement’s Florida forum selection clause and in deference to the pending Florida action; anti‑suit claim was waived. The court did not resolve temporary presidential immunity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of DWAC charter Lock‑Up under 8 Del. C. § 202 (and facial reasonableness) | Lock‑Up is invalid because it was not permissibly imposed on UAV’s shares and was adopted to retaliate against UAV (hence unreasonable). | Lock‑Up was properly adopted by DWAC stockholder vote before effectiveness and is a common, facially reasonable de‑SPAC market‑stability measure. | Dismissed. "Adoption" occurred when DWAC stockholders voted (Mar 22); Lock‑Up is facially reasonable and UAV pleaded no facts showing DWAC acted with illicit motive or that Legacy TMTG caused the Lock‑Up. |
| Section 151 challenge — were UAV’s shares "issued" before charter restrictions were stated? | UAV says shares were effectively issued at the Merger Effective Time (when Certificate of Merger filed) before the charter was filed, so restrictions weren’t "stated and expressed." | ‘‘Issue’’ requires actual delivery/possession; shares weren’t issued to UAV until after the Second Amended Charter was filed and restrictive legend affixed. | Dismissed. Court held issuance occurred after the charter filing; restrictions were "stated and expressed" when shares were issued. |
| Fiduciary duty / aiding and abetting / conspiracy tied to the Lock‑Up | Legacy TMTG directors conspired with DWAC to impose the Lock‑Up to harm UAV; directors breached duties in bad faith; others aided and abetted and conspired. | UAV fails to plead any specific acts by Legacy TMTG directors that caused the Lock‑Up; DWAC (not Legacy TMTG) adopted the Lock‑Up; no well‑pleaded underlying breach to support aiding/conspiracy. | Dismissed. Plaintiff failed to plead necessary facts: no pleaded conduct showing Legacy TMTG directors caused or approved the Lock‑Up, no underlying fiduciary breach, and no factual basis for knowing participation or conspiracy. |
| Services Agreement claims (validity/enforceability) — forum & parallel Florida actions (McWane) | Asserts Services Agreement remains enforceable and seeks Delaware declarations. | Services Agreement has a mandatory Florida forum selection clause; related claims are already before a Florida court (Sarasota Action) — Delaware should defer. | Dismissed without prejudice. Forum selection clause requires Florida venue; in any event Delaware defers to the earlier Florida action under McWane/Cryo‑Maid factors. |
Key Cases Cited
- Clinton v. Jones, 520 U.S. 681 (1997) (federal‑official immunity and principle that courts should avoid constitutional questions if unnecessary)
- Lyng v. Northwest Indian Cemetery Protective Ass'n, 485 U.S. 439 (1988) (canon of constitutional avoidance; courts should avoid constitutional rulings unless necessary)
- Cent. Mortg. Co. v. Morgan Stanley Mortg. Cap. Hldgs. LLC, 27 A.3d 531 (Del. 2011) (pleading‑stage standard: accept well‑pleaded facts, reject conclusory assertions)
- Grynberg v. Burke, 378 A.2d 139 (Del. Ch. 1977) (transfer‑restriction reasonableness inquiry under Delaware common law)
- AeroGlobal Cap. Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428 (Del. 2005) (waiver requires knowledge of material facts and intent to relinquish rights)
- Malpiede v. Townson, 780 A.2d 1075 (Del. 2001) (standards for pleading fiduciary duty and drawing inferences at motion to dismiss)
- In re Mindbody, Inc. S'holder Litig., 332 A.3d 349 (Del. 2024) (elements for aiding and abetting a fiduciary breach)
- Est. of Eller v. Bartron, 31 A.3d 895 (Del. 2011) (fiduciary duty requires proof of duty and breach)