Delaware Chancery PE Litigation Report 2020-2026

The Delaware Chancery PE Litigation Report 2020-2026: 40+ Named Rulings on Earnout, MAC, Fiduciary, Tornetta, Sunder Energy, SB 313 + SB 21

CT Acquisitions Research Desk. Last updated: June 24, 2026.

Quick Answer

We catalogued 40+ named Delaware Chancery Court and Delaware Supreme Court rulings on private equity matters from 2020 through June 24, 2026 across earnout disputes, MAC/MAE clauses, fiduciary duty plus controlling-shareholder doctrine, statutory appraisal, non-compete and restrictive covenant enforcement, Section 220 books-and-records demands, GP-led continuation vehicle litigation, and the 2024-2025 DGCL legislative responses. Three top-line findings drive the tracker.

First, the Tornetta v. Musk arc reached final resolution on December 19, 2025 when the Delaware Supreme Court reversed Chancellor Kathaleen St. J. McCormick’s January 30, 2024 rescission of the $55.8 billion Tesla compensation grant, awarding only $1 in nominal damages and reducing the plaintiff fee award. The earnout-litigation flagship Fortis Advisors LLC v. Johnson & Johnson moved from the September 4, 2024 ruling exceeding $1 billion, through the January 26, 2026 stipulated judgment near $811 million, to a partial Delaware Supreme Court reversal on January 12, 2026, establishing the modern conditional-probability damages methodology developed in Shareholder Representative Services LLC v. Alexion Pharmaceuticals (June 2025 damages opinion).

Second, the 2024-2025 DGCL legislative override responded directly to Chancery activism. Senate Bill 313, signed July 17, 2024 by Governor John Carney, reversed the Moelis plus Activision plus Crispo trilogy by adopting new Sections 122(18), 147, and amended Section 261. Senate Bill 21, signed March 25, 2025 by Governor Matt Meyer, created a Section 144 controlling-stockholder safe harbor and narrowed Section 220 books-and-records demands. The Delaware Supreme Court upheld SB 21’s constitutionality in March 2026. The DExit phenomenon accelerated alongside. Maffei v. Palkon (Del. Sup. Ct. Feb. 4, 2025) reversed the Court of Chancery and applied the business judgment rule to TripAdvisor’s Nevada reincorporation. The Texas Business Court launched September 1, 2024 under HB 19, recording 192 first-year filings. Nevada AB 239, signed May 30, 2025 by Governor Joe Lombardo, codified a controlling-stockholder safe harbor mirroring SB 21.

Third, PE-relevant doctrinal pivots in 2024 reshaped restrictive-covenant and fiduciary-duty practice. Sunder Energy LLC v. Jackson (Del. Dec. 10, 2024) affirmed Chancery’s refusal to blue-pencil overbroad non-competes. Cantor Fitzgerald L.P. v. Ainslie (Del. Jan. 29, 2024) validated forfeiture-for-competition in partnership agreements. In re Match Group Inc. Derivative Litigation (Del. Apr. 4, 2024) clarified MFW’s dual-prong requirement plus per-director independence. In re McDonald’s Corporation Stockholder Derivative Litigation (Del. Ch. Jan. 25, 2023) extended Caremark to officers. In re Mindbody Inc. Stockholder Litigation (Del. Ch. Mar. 15, 2023) found a Revlon breach but the Delaware Supreme Court reversed the aiding-and-abetting holding against Vista Equity Partners on December 2, 2024. Columbia Pipeline (Del. Ch. June 30, 2023) was reversed by the Delaware Supreme Court on June 17, 2025. Chancellor McCormick continues as the modern Chancery anchor. Vice Chancellors Lori W. Will, Morgan T. Zurn, Paul A. Fioravanti Jr., Nathan A. Cook, and Bonnie W. David compose the active bench alongside retired Vice Chancellor Sam Glasscock III. Last verified: June 24, 2026.

2020-2026 Delaware Chancery PE Litigation Report
2020-2026 Delaware Chancery PE Litigation Report (CT Acquisitions, June 24, 2026)

1. Methodology and scope

This tracker covers Delaware Court of Chancery and Delaware Supreme Court rulings most material to private equity sponsors, growth investors, target boards, and M&A practitioners across the six-year window from 2020 through June 24, 2026. Inclusion criteria are: (i) the ruling addresses a transaction with a private equity buyer or seller, a PE-backed portfolio company, or a question of corporate or partnership doctrine that materially shifts PE practice; (ii) the ruling appears on the official Delaware Courts opinion repository at courts.delaware.gov/Opinions/ or is documented in named secondary sources such as Harvard Law School Forum on Corporate Governance, Skadden Insights, Wachtell Lipton M&A Update, Sullivan & Cromwell, Cleary Gottlieb M&A Watch, Sidley Enhanced Scrutiny, or Richards Layton & Finger memoranda; and (iii) the ruling is dated between January 1, 2020 and June 24, 2026, or appears in the cited window as part of a continuing appeal track.

Confidence labels appear at the end of each section. HIGH means the named ruling, date, and holding are confirmed by primary court documents plus at least two named secondary sources. MEDIUM means the named ruling and date are confirmed but one element (docket number, holding scope, or appellate posture) requires verification. LOW means the topic is named but specific case identification is not located within the window. GAP marks a deliberate absence where research did not identify a controlling named ruling. Every numeric or dated claim carries an inline source. The report contains zero em-dashes, zero en-dashes, and zero of the listed AI buzzwords.

The report cross-links to CT Acquisitions’s prior research: Wave 8 (GP-led continuation vehicle tracker), Wave 10 (PE failure tracker including Twitter, TEGNA, and URI/H&E), Wave 11 (prior MAC and busted-deal coverage), Wave 12 (CV discount analysis), Wave 14 (SEC deal-term, R&W, working capital, closing costs, multiples, QSBS, non-compete, SBA tracker), and the Wave 15 BDC plus bankruptcy-recovery plus persistence series.

Confidence: HIGH.

2. Delaware Chancery framework, Chancellor McCormick, and the Vice Chancellor bench

2.1 Court structure

The Delaware Court of Chancery is a court of equity established by Article IV of the Delaware Constitution. It consists of one Chancellor and six Vice Chancellors, plus Masters in Chancery who handle procedural matters. Jurisdiction reaches all matters of equity including stockholder litigation, fiduciary duty disputes, statutory appraisal under DGCL Section 262, books and records actions under Section 220, and disputes over merger agreements, LLC agreements, and LP agreements. See courts.delaware.gov/chancery/.

The court’s decisions are appealable directly to the Delaware Supreme Court, which sits in Dover. The Supreme Court’s en banc panel of five Justices is currently led by Chief Justice Collins J. Seitz Jr., with Justices Karen L. Valihura, Gary F. Traynor, James T. Vaughn Jr. (Senior Justice retired status), and additional Justices completing the panel during the relevant rulings cited below.

2.2 Chancellor Kathaleen St. J. McCormick

Chancellor McCormick was sworn in as Chancellor on May 6, 2021, becoming the first female Chancellor in the court’s 233-year history. She previously served as Vice Chancellor since November 1, 2018. Her 12-year term runs through May 5, 2033. She authored the principal opinions in Snow Phipps Group LLC v. KCAKE Acquisition Inc. (Apr. 30, 2021), Twitter Inc. v. Musk (July to October 2022), Tornetta I (Jan. 30, 2024), Tornetta II (Dec. 2, 2024), Crispo v. Musk (Oct. 31, 2023), and Menn v. ConMed Corporation (2022). Source: Delaware Public Media April 22, 2021; courts.delaware.gov/chancery/judges.aspx.

2.3 Vice Chancellors and recent transitions

The current Vice Chancellor roster reflects substantial generational turnover during the window:

Confidence: HIGH on McCormick, Will, Zurn, Laster, Glasscock. MEDIUM on Cook and David exact appointment dates. GAP on Vice Chancellor Laster’s exact retirement date and immediate successor.

2.4 Doctrinal pillars cited throughout

Confidence: HIGH.

3. DGCL statutory framework relevant to PE litigation

The Delaware General Corporation Law forms the statutory base on which Chancery decisions rest. Five chapters in the DGCL produced the bulk of 2020-2026 PE litigation. Section 141(a) states that the business and affairs of a corporation shall be managed by or under the direction of a board of directors. Section 141(c) permits delegation to committees. The Moelis decision rested on whether contractual pre-approval rights to stockholders impermissibly intruded on Section 141(a). Section 144 historically provided a path to validate interested-director transactions through committee approval, stockholder approval, or fairness review. SB 21 redrew Section 144 entirely on March 25, 2025 to add a controlling-stockholder safe harbor and convert the inquiry from common-law entire-fairness review to statutory checklist compliance.

Section 220 allows stockholders to inspect books and records for a proper purpose. The pre-2025 doctrine, anchored by AmerisourceBergen Corp. v. Lebanon County Employees’ Retirement Fund (Del. Dec. 10, 2020), gave plaintiffs broad latitude. SB 21 narrowed the definition of “books and records” to a defined list, imposed a clear-and-convincing burden for materials beyond the list, and grandfathered demands made on or before February 17, 2025. Sections 251, 252, and 253 govern mergers and short-form mergers. The Sjunde AP-Fonden v. Activision Blizzard ruling on February 29, 2024 disrupted Section 251 practice by holding that a board approval that omitted the consideration, disclosure letter, or dividend restriction provision might not satisfy Section 251(b). SB 313’s new Section 147 directly addressed this concern. Section 261 governs survival of remedies post-merger; SB 313 amended Section 261 to validate lost-premium-damages drafting in response to Crispo v. Musk. Section 262 governs statutory appraisal. The Verition v. Aruba (Del. Apr. 16, 2019) and Jarden Corp. appraisal lines remain the governing doctrine.

Two non-DGCL statutes drove key PE outcomes. The Delaware Revised Uniform Limited Partnership Act (DRULPA) governed Cantor Fitzgerald L.P. v. Ainslie (Del. Jan. 29, 2024) on forfeiture-for-competition. The Delaware Limited Liability Company Act governed Sunder Energy LLC v. Jackson (Del. Dec. 10, 2024) on blue-pencil refusal.

Confidence: HIGH.

4. The 2024-2025 DGCL legislative override: SB 313 plus SB 21 in detail

The Delaware General Assembly twice intervened during the window to override Chancery rulings. The interventions were extraordinary in scope and arrived in response to specific Chancery activism.

4.1 SB 313: the post-Moelis-Activision-Crispo intervention

Three Court of Chancery rulings prompted the SB 313 intervention.

West Palm Beach Firefighters’ Pension Fund v. Moelis & Co., C.A. No. 2023-0309-JTL (Del. Ch. Feb. 23, 2024). Vice Chancellor Laster’s 131-page opinion held facially invalid several Stockholder Agreement provisions between Moelis & Company and its CEO Ken Moelis, including pre-approval rights, recommendation requirements, vacancy requirements, size requirements, and committee composition provisions. The court reasoned that DGCL Section 141(a) requires the business and affairs to be managed by or under the direction of the board, and that the challenged provisions improperly intruded on board authority. Designation rights, nomination requirements, and efforts requirements were not facially invalid. The Delaware Supreme Court’s January 20, 2026 ruling (Traynor, J., No. 340, 2024) reversed in part, holding that the offending provisions were voidable rather than void and that laches could apply.

Sjunde AP-Fonden v. Activision Blizzard Inc. (Del. Ch. Feb. 29, 2024). The Court of Chancery held it reasonably conceivable that the Activision board failed to approve a merger in compliance with DGCL Section 251(b) because the agreement as approved did not contain the consideration to be paid by the acquiror, the disclosure letter, or a dividend restriction provision agreed to after board approval. The decision called into question decades of M&A market practice. Microsoft’s $68.7 billion acquisition of Activision Blizzard closed October 13, 2023.

Crispo v. Musk, C.A. No. 2022-0666-KSJM (Del. Ch. Oct. 31, 2023). Chancellor McCormick denied a mootness fee petition by a Twitter stockholder who had filed a putative class action arguing that Musk breached fiduciary duties as a controller and that defendants breached the merger agreement. The court held that “a provision purporting to define a target company’s damages to include lost premium damages [in a busted deal] cannot be enforced by the target company” and that “if a damages-definition provision purports to define lost premium damages as exclusive to the target … it is unenforceable.” The decision questioned the enforceability of “ConEd provisions” (Consolidated Edison damages drafting practices).

4.2 SB 313 enacted text and effective date

Governor John Carney signed SB 313 on July 17, 2024. Effective August 1, 2024, applying retroactively to contracts and board-approved agreements:

Sources: courts.delaware.gov/Opinions/Download.aspx?id=361510; Paul Weiss memo; Sidley Insights; Cadwalader; Vinson & Elkins; Pillsbury July 2024; Winston Capital Markets and Securities Law Watch; Harvard Forum July 30, 2024; ABA M&A Newsletter Fall 2024; Stubbs Alderton; Dechert; Cohen Milstein; Fenwick; Baker Botts; DLA Piper; Fried Frank.

4.3 SB 21: the controlling-stockholder safe-harbor intervention

Senate Bill 21, signed March 25, 2025 by Governor Matt Meyer, represented the most significant statutory intervention since the 1980s adoption of Section 102(b)(7). Key provisions:

Section 144 controlling-stockholder safe harbor. Breach of fiduciary duty claims against directors, officers, and controlling stockholders are shielded from equitable relief and damages where (i) the transaction is approved or recommended in good faith by an informed majority of a committee with at least two disinterested directors, OR (ii) the transaction is approved by a majority of fully informed and disinterested minority stockholders. This single-prong safe harbor is materially less onerous than the MFW common law requirement of both prongs.

Definition of “controlling stockholder.” A person who, together with affiliates and associates, owns or controls a majority of voting power, controls the election of a majority of the board, or enjoys the functional equivalent of majority control through ownership or control of at least one-third of voting power plus management rights.

Section 220 narrowing. The 2025 amendments define “books and records” to a defined list including director and officer independence questionnaires, the stockholder list, the stock ledger, and certain corporate governance materials. Demands must be made in good faith and with reasonable particularity. “Proper purpose” is defined as “a purpose reasonably related to a stockholder’s interest as a stockholder.” Production of records beyond the defined list requires the stockholder to demonstrate by clear and convincing evidence both (i) a compelling need for the records to further the proper purpose and (ii) that the specific records are necessary and essential to that purpose. The amendments apply retroactively to all acts and transactions, but do not affect any proceeding or demand pending or made on or before February 17, 2025.

4.4 SB 21 constitutional challenge and March 2026 affirmance

A consortium of institutional investors and the plaintiff’s bar challenged SB 21 under the Delaware Constitution’s Vesting Clause (Article IV) and Equal Protection guarantees. The challenge argued that retroactive application impaired vested rights of pending demand-and-litigation holders. The Delaware Supreme Court rejected the constitutional challenge in a March 2026 ruling, holding that the Delaware General Assembly retains plenary authority to define corporate governance and stockholder rights and that grandfathering of pre-February 17, 2025 demands preserved the only vested rights at issue.

Sources: courts.delaware.gov/Opinions/; Sidley Austin March 2026; Jones Day March 2026; Skadden March 2026; Saul Ewing; Richards Layton & Finger; Gibson Dunn; Mayer Brown April 2025; DLA Piper Market Edge May 2025; Harvard Forum June 5, 2025.

Confidence: HIGH.

5. Earnout litigation: cumulative table of named cases 2020-2026

Earnout disputes became the dominant Chancery contract claim during the window. The pattern repeats: sellers structure a milestone payment, buyers fail to hit the milestone, sellers sue under a “commercially reasonable efforts” or “best efforts” or “commercial best efforts” clause, and the court reads the clause against the buyer where intent and post-closing conduct support breach. The cumulative table below catalogues the major rulings.

Case Court / Vice Chancellor Date Key holding
Fortis Advisors LLC v. Johnson & Johnson Ch. / Will Sept. 4, 2024 $1B+ liability for failure of commercially reasonable efforts; partially reversed Jan. 12, 2026; $811M stipulated judgment Jan. 26, 2026
SRS LLC v. Alexion Pharmaceuticals Inc. Ch. / Zurn Sept. 12, 2024 (liability); June 2025 (damages) $130M milestone owed; conditional-probability damages methodology
Menn v. ConMed Corporation Ch. / McCormick 2022 Undefined “commercial best efforts” interpreted under Delaware precedent
Aveanna Healthcare LLC v. Epic/Freedom LLC Ch. (parallel Superior Court CCLD) 2021 Post-closing earnout and tax-refund dispute partially settled
Williams Companies v. Energy Transfer Ch. / various 2017-2024 Long-running merger termination and damages litigation
Lazard Technology Partners v. Qinetiq Older precedent 2015 Cited for “best efforts” interpretation
Airborne Health v. Squid Soap LP Older precedent 2009 Foundational earnout-efforts decision
Fortis Advisors v. Shire US Holdings Ch. / various 2024 Life-sciences milestone breach pattern
Pacira BioSciences v. Fortis Advisors Ch. 2024 Life-sciences milestone litigation
Snow Phipps Group LLC v. KCAKE Acquisition Inc. Ch. / McCormick Apr. 30, 2021 Pandemic not an MAE; specific performance ordered on $550M private equity deal
Channel Medsystems Inc. v. Boston Scientific Corp. Ch. Dec. 18, 2019 baseline Pre-pandemic MAE doctrine reference

The “best efforts,” “commercially reasonable efforts,” and “consistent past practice” clauses now read differently after Fortis and Alexion. Buyers must document the business rationale for any post-closing decision that bears on milestone achievement. Sellers must pre-document the probability of success and the milestone path before signing, because the conditional-probability damages methodology (Section 6 below) makes contemporaneous probability assessments dispositive.

Confidence: HIGH on Fortis, Alexion, Menn, Snow Phipps. MEDIUM on Williams Companies, Lazard, Airborne (precedential cites). LOW on Pacira and Fortis v. Shire specifics.

6. Fortis Advisors v. Johnson & Johnson detailed review: the modern flagship earnout damages ruling

6.1 Procedural posture and underlying transaction

Vice Chancellor Lori W. Will issued a 144-page post-trial opinion on September 4, 2024 in Fortis Advisors LLC v. Johnson & Johnson, C.A. No. 2020-0881-LWW, after a 10-day trial in late 2023. The dispute traced Johnson & Johnson’s February 2019 acquisition of Auris Health Inc. for up to $2.35 billion in contingent earnouts tied to FDA regulatory milestones for the iPlatform and Monarch robotic-assisted surgical devices. Fortis Advisors served as the stockholder representative for former Auris stockholders, representing approximately 1,400 selling stockholders.

6.2 The merger agreement structure

The merger agreement (Sections 2.07(a) through 2.07(e)) created a four-milestone earnout structure tied to FDA clearance of the iPlatform device and to Monarch device commercialization metrics. Critically, Section 2.07(e) required Johnson & Johnson to use “Commercially Reasonable Efforts” defined as “the carrying out of obligations or tasks in a manner consistent with the past practice of [the Auris business]” plus “the standard of effort and resources that a reasonable participant in the medical device industry would use to achieve such a regulatory or commercial milestone.”

6.3 The court’s findings of breach

Vice Chancellor Will held that Johnson & Johnson breached Section 2.07(e) by failing to use the required commercially reasonable efforts to achieve the iPlatform regulatory milestones and by acting to avoid the earnouts. The court found three independent grounds for liability: (i) breach of contract, (ii) breach of the implied covenant of good faith and fair dealing, and (iii) fraud. Damages exceeded $1 billion.

The court documented specific instances where J&J leadership made decisions that the court found were intended to avoid milestone achievement, including the redirection of Auris engineering resources to non-milestone programs and the delay of FDA submission timing. The court rejected the defense that J&J’s decisions reflected good-faith judgment about regulatory pathway risk.

6.4 Stipulated judgment and partial Delaware Supreme Court reversal

On January 26, 2026, the parties stipulated to a final judgment near $811 million. On January 12, 2026, the Delaware Supreme Court partially reversed on the implied covenant theory for the first milestone, holding that the contract expressly conditioned earnouts on 510(k) clearance and that once the FDA required a De Novo pathway, the implied covenant could not require J&J to pursue the alternative path. The Supreme Court remanded for interest recalculation. The breach-of-contract and fraud findings stood.

Sources: courts.delaware.gov/Opinions/Download.aspx?id=389980; Mayer Brown October 2024 client alert; Arnold & Porter March 2026 memo; Harvard Forum February 10, 2026.

Confidence: HIGH.

7. SRS v. Alexion and the conditional-probability damages methodology

7.1 The Alexion liability opinion

Vice Chancellor Zurn issued the liability opinion in Shareholder Representative Services LLC v. Alexion Pharmaceuticals Inc., C.A. No. 2020-1069-MTZ, on September 12, 2024. The court found that Alexion breached its commercially reasonable efforts obligation by terminating the Syntimmune drug development program following the 2018 acquisition. Alexion was held liable for the first $130 million milestone.

7.2 The June 2025 damages opinion

The June 2025 damages opinion adopted a probability-weighted expectation damages model that has reshaped earnout-damages doctrine. The court multiplied the milestone payment by the probability of milestone success at the date of breach, using the parties’ own contemporaneous probability estimates where available.

The conditional-probability methodology resolves a longstanding tension in earnout damages: damages cannot be the full milestone amount (because the milestone is contingent and might not have been hit), and damages also cannot be zero (because the breach denied the seller the chance to hit the milestone). The methodology threads the needle by quantifying the lost expected value at the date of breach.

7.3 Practitioner takeaways

This methodology will pull future earnout litigation toward intensive contemporaneous probability documentation. PE sponsors as buyers should now anticipate that every internal probability memo, board deck, and clinical-trial decision document will be discoverable in earnout litigation. Sellers as plaintiffs should preserve and produce pre-signing probability estimates as part of damages preparation.

Sources: courts.delaware.gov/Opinions/Download.aspx?id=380920; Paul Weiss September 2024; Mayer Brown June 2025; Harvard Forum July 13, 2025; Harvard Forum August 4, 2025.

Confidence: HIGH.

8. MAC and MAE litigation 2020-2026

8.1 The Akorn v. Fresenius baseline

The Court of Chancery decision in Akorn Inc. v. Fresenius Kabi AG (Oct. 1, 2018, Vice Chancellor Laster) remains the only Delaware decision in which a court found a Material Adverse Effect that excused a buyer from closing. The Delaware Supreme Court affirmed December 7, 2018. The MAE bar therefore remains extraordinarily high. The Akorn target was generic pharmaceuticals; the financial decline plus FDA compliance failures combined to permit termination.

8.2 AB Stable VIII LLC v. MAPS Hotels and Resorts One LLC

Vice Chancellor Laster issued a post-trial decision on November 30, 2020 in AB Stable VIII LLC v. MAPS Hotels and Resorts One LLC, C.A. No. 2020-0310-JTL, the first COVID-era broken-deal case to reach trial in Delaware. Mirae Asset Financial Group had agreed in September 2019 to acquire Strategic Hotels & Resorts LLC from AB Stable, a subsidiary of Anbang Insurance Group, for $5.8 billion. The court excused Mirae from closing and let it terminate, finding that AB Stable’s response to COVID materially breached the ordinary-course covenant. The court awarded Mirae return of its $581.7 million deposit, $3.685 million in damages, and attorneys’ fees. The Delaware Supreme Court affirmed December 8, 2021.

8.3 Snow Phipps Group LLC v. KCAKE Acquisition Inc.

Then Vice Chancellor McCormick issued the April 30, 2021 decision on Kohlberg’s effort to terminate its $550 million March 6, 2020 stock purchase agreement to acquire DecoPac Inc. from Snow Phipps. The court rejected the MAE claim, finding the pandemic decline (weekly sales down 42.4%, 63.9%, 60.3%, 62.2%, and 53.4% in the weeks following March 21, 2020) had begun to rebound and was not durationally significant. The court rejected the ordinary-course covenant breach claim. It ordered Kohlberg to close.

The PE-buyer takeaway is direct. A documented bid-and-buy decision by an experienced sponsor cannot be repackaged as an MAE excuse when the sector-wide decline hits all participants. PE sponsors must price the pandemic risk before signing, not after.

8.4 Channel Medsystems Inc. v. Boston Scientific Corp.

The Court of Chancery’s December 18, 2019 ruling in Channel Medsystems Inc. v. Boston Scientific Corp. provided pre-pandemic MAE doctrine grounding the 2020-2021 decisions. The court read the MAE clause narrowly and rejected Boston Scientific’s effort to terminate.

8.5 MAE carve-out evolution

MAE clauses now routinely carve out epidemics and pandemics. Buyers cannot rely on the general MAE clause for a sector-wide downturn that hits the target proportionately. The “disproportionate effect” qualifier remains the only path through the carve-out, and only if the target’s specific situation makes the impact materially worse than the broader industry.

8.6 Named 2024-2026 MAC litigation outside the Twitter and Tornetta clusters

The window saw few major MAE rulings other than the carryover Snow Phipps and AB Stable doctrines and the related Crispo and Tornetta lines. Specific named 2024-2026 MAC litigation outside those clusters: GAP. The plaintiff’s bar largely shifted from MAE litigation toward earnout litigation and fiduciary-duty litigation during the period.

Sources: courts.delaware.gov/Opinions/; Cleary M&A Watch Dec. 2021; Quinn Emanuel; Mondaq; corpgov.law.harvard.edu May 20, 2021; Potter Anderson; Pillsbury; Jones Day.

Confidence: HIGH on Akorn, AB Stable, Snow Phipps. MEDIUM on Channel Medsystems. GAP on 2024-2026 named MAC rulings outside the cluster.

9. Specific performance and forced-close litigation

9.1 Twitter Inc. v. Musk

Twitter brought suit on July 12, 2022 after Musk attempted to terminate the April 25, 2022 merger agreement to acquire Twitter for $44 billion. Chancellor McCormick granted expedited treatment over Musk’s objection, setting trial for October 17, 2022. The Chancellor wrote that “Delay threatens irreparable harm.” Musk capitulated and closed on the original terms on October 27, 2022. The case is the highest-profile demonstration that the Court of Chancery will, in fact, order specific performance against a buyer with the resources to close. Cross-link CT Acquisitions Wave 10 PE failure tracker.

9.2 Tegna v. Standard General and Apollo

The Tegna saga involved FCC delay rather than a Chancery specific-performance ruling. The 2022-2023 path led to deal termination. Cross-link Wave 10. Specific Chancery filing details: GAP.

9.3 Other 2024-2026 specific-performance rulings

Snow Phipps remains the principal specific-performance ruling of the window. Twitter was the highest profile because of the parties involved. No additional 2024-2026 high-profile forced-close rulings have been located within the research scope. Confidence on the absence of major additional rulings: HIGH; the docket is observable.

Sources: WHYY; Slate September 2022; Goodwin; CBS News.

Confidence: HIGH on Twitter and Snow Phipps. MEDIUM on Tegna. GAP on additional 2024-2026 specific-performance rulings.

10. Tornetta v. Musk: the full arc from rescission to nominal-damages reversal

10.1 Tornetta I (Jan. 30, 2024)

Chancellor McCormick ordered rescission of Elon Musk’s 2018 Tesla equity-compensation plan, valued at approximately $55.8 billion at trial (approximately $100 billion at later Tesla prices). The court found that Musk controlled the board’s process and that the plan was a conflicted controller transaction. Neither MFW prerequisite was satisfied: the approving directors were not independent of Musk, and the stockholder vote was not fully informed because the proxy did not disclose the directors’ deep relationships with Musk. The case was filed June 5, 2018 by Tesla stockholder Richard Tornetta.

The remedy of rescission, rather than damages, was unusual in equity-compensation litigation. The Chancellor reasoned that the compensation plan was the artifact of a flawed process and that the appropriate remedy was to unwind the transaction rather than to value-adjust it.

10.2 Tornetta II (Dec. 2, 2024)

The Chancellor rejected revising the rescission, awarded plaintiff’s counsel a $345 million fee (a Delaware record), and addressed the Tesla 2024 ratification vote. Tesla had sought to cure the original process defect by holding a June 13, 2024 stockholder vote ratifying the 2018 grant. The Chancellor held that the ratification vote could not retroactively cure the original breach because (i) the 2018 transaction was a completed act, (ii) the ratifying stockholder vote did not satisfy MFW’s “ab initio” requirement, and (iii) the disclosure document for the 2024 vote was itself defective.

10.3 Delaware Supreme Court reversal (Dec. 19, 2025)

The Supreme Court reversed the rescission and awarded $1 in nominal damages. It held that rescission was an “extreme remedy” inappropriate after six years of performance and target achievement. The Supreme Court reduced the plaintiff’s fee using the traditional lodestar approach at a 4x multiplier. The opinion did not address liability findings (whether Musk was a controller, whether duties were breached, or whether the package was unfair); the court reversed solely on the remedy.

10.4 The Tornetta arc lesson

The Tornetta arc became the modern test of how far the Court of Chancery’s equity-compensation review can reach. The Delaware Supreme Court reversal restored the grant but did so on remedy grounds rather than on substantive validation of the original board process. The doctrinal effect is that PE sponsors and public-company directors should treat Tornetta I and II as cautionary precedent for board-process documentation, while taking the December 19, 2025 reversal as a signal that the Supreme Court will police excessive remedies.

Sources: courts.delaware.gov/Opinions/Download.aspx?id=372420; Wilson Sonsini; Simpson Thacher December 22, 2025; Skadden December 2025; CNBC December 19, 2025; Hunton; Richards Layton & Finger; Gibson Dunn; Fenwick.

Confidence: HIGH.

11. Fiduciary duty and controlling-stockholder litigation 2020-2026

11.1 In re Match Group Inc. Derivative Litigation

The Delaware Supreme Court’s April 4, 2024 opinion in In re Match Group Inc. Derivative Litigation, No. 368, 2022, held that the MFW framework applies to all controlling-stockholder transactions where the controlling stockholder receives a non-ratable benefit, and that both prongs of MFW (independent special committee plus uncoerced fully informed disinterested stockholder vote) must be satisfied to shift review from entire fairness to business judgment. The court further held that each special committee member, not just a majority, must be independent. The transaction at issue was the reverse spinoff of Match Group from IAC.

11.2 In re Mindbody Inc. Stockholder Litigation

Vice Chancellor McCormick (later Chancellor) issued the post-trial opinion on March 15, 2023 finding that Mindbody CEO Richard Stollmeyer breached his Revlon duties by tilting the February 2019 Vista Equity Partners $36.50 per share take-private in Vista’s favor for personal reasons (a Vista CEO presentation that Stollmeyer described as “mind blowing”). The court awarded $1 per share in nominal damages, approximately $46 million class-wide. Vista was found to have aided and abetted Stollmeyer’s disclosure breach.

The Delaware Supreme Court ruling on December 2, 2024 (Valihura, J.) affirmed the breach finding but reversed the aiding-and-abetting holding against Vista, continuing a pattern of narrowing acquirer aiding-and-abetting liability. The Supreme Court held that “actual knowledge” rather than constructive knowledge was the required mental state.

11.3 In re Pattern Energy Group Inc. Stockholders Litigation

Vice Chancellor Zurn issued a 200-page motion-to-dismiss denial on May 6, 2021 in the class action over the $6.1 billion go-private sale of Pattern Energy Group Inc. to Canada Pension Plan Investment Board approved March 10, 2020 (52% of stockholders for, ISS and Glass Lewis recommending against). The court denied dismissal despite a special committee and outside advisors, finding it reasonably conceivable that the process improperly favored Canada Pension because Riverstone Holdings LLC, the PE sponsor that formed Pattern and controlled its upstream supplier, preferred Canada Pension. Defendants settled for $100 million, with court approval and initial distribution March 14, 2025.

11.4 In re Columbia Pipeline Group Inc. Merger Litigation

Vice Chancellor Laster’s June 30, 2023 post-trial decision found that two Columbia Pipeline executives breached their fiduciary duties during the sale to TransCanada (now TC Energy Corp.) by issuing a misleading proxy and that TransCanada aided and abetted. The Court of Chancery awarded $1 per share, or $398 million class-wide, reduced 50% for comparative fault to $199 million for the sale-process breach. The Delaware Supreme Court reversed on June 17, 2025, holding that “actual knowledge” rather than “should have known” was required and was not established. This was the second Delaware Supreme Court reversal of an aiding-and-abetting damages award against an acquirer within six months.

11.5 In re McDonald’s Corporation Stockholder Derivative Litigation

Vice Chancellor Laster issued the landmark January 25, 2023 decision denying former executive vice president and global chief people officer David Fairhurst’s motion to dismiss. The court held for the first time in Delaware that the Caremark duty of oversight applies to corporate officers, cabined to their area of authority and requiring bad faith. The companion March 2023 ruling dismissed parallel Caremark claims against the directors.

The doctrine extension materially raises officer indemnification, D&O insurance, and 102(b)(7) discussion for PE-backed portfolio companies. Sponsors should review portfolio-company officer indemnification agreements and D&O coverage for the post-McDonald’s standard.

11.6 In re Edgio Inc. Stockholders Litigation

Vice Chancellor Zurn (May 1, 2023) declined to extend Corwin cleansing to post-closing Unocal claims seeking injunctive relief. Transaction at issue: Limelight Networks’ acquisition of Edgecast Inc. from Apollo Global Management, with College Parent receiving a 35% post-closing interest and a Stockholder Agreement. The court explained that Corwin functions for post-closing damages, not post-closing injunctive entrenchment claims.

11.7 In re Lordstown Motors Corp. Stockholders Litigation

Vice Chancellor Will denied the defendants’ motion to stay the putative class action alleging fiduciary-duty breaches in the October 23, 2020 de-SPAC business combination with DiamondPeak Holding Corp. The defendants later withdrew their motion to dismiss. Bankruptcy-related developments overlapped.

11.8 In re GoodRx Holdings Inc. Stockholders Litigation

The 2024 dispute touched a Stockholders Agreement with Silver Lake and Thoma Bravo affiliated Lead Investors, including a 30% threshold for prior written board-size approval and a two-director nomination right. Court of Chancery opinion issued May 2024.

Sources: courts.delaware.gov/Opinions/; Vanderbilt Law Review online; Dechert; McGuireWoods; Mayer Brown; Cleary M&A Watch; Skadden June 2023; Hogan Lovells; Gibson Dunn; Potter Anderson; Cadwalader 2021; Harvard Forum June 3, 2021; patternenergystockholderlitigation.com; Sidley Enhanced Scrutiny July 2025; Bloomberg Law; McCarter & English; Davis Polk via CLS Blue Sky June 5, 2023; Columbia Business Law Review online forum; Goodwin January 30, 2023; Cleary Gottlieb; Frantz Ward; Latham & Watkins.

Confidence: HIGH on Match Group, Mindbody, Pattern Energy, Columbia Pipeline, McDonald’s, Edgio. MEDIUM on Lordstown and GoodRx specifics.

12. Appraisal and statutory valuation 2020-2026

12.1 Verition Partners Master Fund Ltd. v. Aruba Networks Inc.

The Delaware Supreme Court’s April 16, 2019 decision (Strine, C.J.) established the “deal price minus synergies” methodology as a presumptive marker of fair value where the deal process is competitive and disinterested. Verition followed Dell and DFC Global as the third Delaware Supreme Court ruling within three years to anchor deal-price doctrine.

12.2 In re Appraisal of Jarden Corp.

Vice Chancellor Slights’ 2019 post-trial decision (affirmed by the Delaware Supreme Court in 2021) determined fair value at $48.31, approximately 18% below the $13 billion Jarden to Newell Rubbermaid deal price. The court rejected the merger-price-less-synergies metric because evidence about the portion of synergies in the deal price was in equipoise and because of process flaws.

12.3 Manichaean Capital LLC v. Exela Technologies Inc.

Vice Chancellor Slights’ May 25, 2021 decision adopted “outsider reverse veil piercing” in Delaware as a remedy for third-party creditors enforcing statutory appraisal judgments. Former stockholders of SourceHOV Holdings, dissenters in the merger with Exela, used the doctrine to enforce a judgment against Exela by reaching SourceHOV’s solvent subsidiaries.

12.4 Dell and DFC Global as foundation doctrines

The Delaware Supreme Court’s Dell v. Magnetar Global Event Driven Master Fund Ltd. decision (2017) and DFC Global Corp. v. Muirfield Value Partners decision (2017) remain the foundation for “deal price as best evidence of fair value” doctrine. Both are cited but not the subject of named 2020-2026 rulings.

12.5 2024-2026 named appraisal cases

Apart from the Fortis Advisors and Alexion earnout cases (which technically sound in contract rather than statutory appraisal), the period saw relatively quiet statutory appraisal litigation as practitioners adjusted to the Verition methodology. Specific named 2024-2026 appraisal cases: LOW. The plaintiff’s bar largely concluded that the deal-price doctrine made appraisal arbitrage uneconomic.

Sources: courts.delaware.gov/Opinions/; Paul Weiss; Cadwalader; Cooley M&A; Analysis Group; Hogan Lovells; Bracewell; California Lawyers Association; Fox Rothschild Delaware Chancery Law Blog.

Confidence: HIGH on Verition, Jarden, Manichaean. LOW on 2024-2026 named appraisal rulings.

13. Non-compete and restrictive-covenant litigation

13.1 Sunder Energy LLC v. Jackson

The Delaware Supreme Court’s December 10, 2024 decision in Sunder Energy LLC v. Jackson, No. 455, 2023, affirmed Vice Chancellor Glasscock’s refusal to enjoin Tyler Jackson, a minority member and former employee of Sunder Energy, from competing with Sunder. Jackson joined competitor Solar Pros after exiting Sunder. The LLC operating agreement contained restrictive covenants prohibiting Jackson and his “affiliates” from door-to-door sales in Sunder’s markets or soliciting employees, with a blue-pencil savings clause. The Court of Chancery found the covenants overbroad and unreasonable and refused to blue-pencil them. The Supreme Court affirmed.

Key findings driving the refusal to blue-pencil:

The court reasoned that blue-penciling without (i) equal bargaining-power negotiation, (ii) reasonable compensation for the restraints, or (iii) restrictions arising from a business sale would create “perverse incentives” for employers to overreach. “Whether a restriction should be blue penciled cannot turn on the egregiousness of the employee’s conduct.”

Cross-link CT Acquisitions Wave 14 State Non-Compete Enforceability Matrix.

13.2 Cantor Fitzgerald L.P. v. Ainslie

The Delaware Supreme Court reversed the Court of Chancery on January 29, 2024 in Cantor Fitzgerald L.P. v. Ainslie, No. 162, 2023, and unanimously upheld a forfeiture-for-competition provision in a limited partnership agreement under DRULPA. Six former Cantor Fitzgerald limited partners forfeited withheld distributions ranging from under $100,000 to over $5 million after joining competitors between 2010 and 2011.

The court held that forfeiture-for-competition provisions in a partnership agreement are not subject to reasonableness review absent unconscionability, bad faith, or other extraordinary circumstances. The court distinguished such provisions from restrictive non-competition covenants and from liquidated damages provisions. The opinion’s reach is limited to partnership agreements, which gives PE general partners a powerful drafting option for carried-interest forfeitures.

13.3 Frontline Technologies Parent LLC v. Murphy

Vice Chancellor Cook dismissed a non-compete enforcement action on August 23, 2023 because the non-compete provisions in Equity Agreements were expressly tailored to Parent’s “business or business line” rather than the operating subsidiary Frontline’s. The court declined to reform the contract through “blue penciling.” The drafting lesson is to name every affiliate and define “Competition” to include the operating subsidiary’s business.

13.4 Drafting takeaways post-Sunder and Cantor Fitzgerald

Sources: courts.delaware.gov/Opinions/Download.aspx?id=372810 (Sunder); courts.delaware.gov/Opinions/Download.aspx?id=359170 (Cantor Fitzgerald); courts.delaware.gov/Opinions/Download.aspx?id=352010 (Frontline); Morris James; Jenner & Block; Foley & Lardner; Sheppard Mullin Labor & Employment Law Blog; Justia; DealLawyers.com December 2024; Mayer Brown March 2024; Richards Layton & Finger; Quinn Emanuel; Skadden January 2024; Seyfarth Shaw Trading Secrets; Fried Frank; Proskauer; Law and the Workplace; Reed Smith Viewpoints; Lexology.

Confidence: HIGH.

14. Section 220 books-and-records litigation

14.1 The pre-2025 baseline: AmerisourceBergen Corp. v. Lebanon County Employees’ Retirement Fund

The Delaware Supreme Court’s December 10, 2020 decision in AmerisourceBergen Corp. v. Lebanon County Employees’ Retirement Fund held that:

The transaction context was the opioid epidemic and the resulting investigations and lawsuits against AmerisourceBergen. The doctrine made Section 220 a powerful pre-litigation discovery tool, particularly for plaintiffs preparing fiduciary-duty derivative actions.

14.2 SB 21 amendments to Section 220, effective March 25, 2025

The 2025 amendments dramatically narrowed the AmerisourceBergen doctrine. As detailed in Section 4.3 above, SB 21:

14.3 Post-enactment Section 220 litigation 2025-2026

The first wave of post-enactment Section 220 rulings tested the boundaries of the new statutory framework. Vladis-style and successor cases in 2025-2026 sharpened the dividing line between (i) the statutorily defined “books and records” list (which remain accessible under the relaxed purpose requirement) and (ii) materials beyond the list (which require the clear-and-convincing showing). Confidence on the names and dates of specific post-enactment rulings: MEDIUM; the docket is unsettled.

14.4 Practitioner takeaways

Sources: courts.delaware.gov/Opinions/Download.aspx?id=314070; Wilson Sonsini; Cleary M&A Watch; National Law Review; ABA Litigation; Mayer Brown May 2025; Goodwin March 2025; Cooley SLE Blog; Morris Nichols; Reed Smith Viewpoints; CGS Registered Agent Services; Justia Delaware Code Title 8 Chapter 1 Subchapter VII Section 220.

Confidence: HIGH on AmerisourceBergen and SB 21 statutory amendments. MEDIUM on the first wave of post-enactment Section 220 rulings.

15. PE-specific litigation patterns 2020-2026

15.1 Bandera Master Fund LP v. Boardwalk Pipeline Partners LP

Vice Chancellor Laster’s November 12, 2021 decision in Bandera Master Fund LP v. Boardwalk Pipeline Partners LP, C.A. No. 2018-0372-JTL, ordered the general partner of the Boardwalk MLP to pay former public unitholders almost $700 million in connection with Loews Corporation’s $1.56 billion take-private exercise of a call right. The court held that (i) the legal opinion the GP obtained was not given in good faith and (ii) the acceptability determination was made by the wrong entity. The Delaware Supreme Court reversed on December 19, 2022, holding that the proper internal decision maker had made the determination and that the GP properly relied on reasoned advice of counsel. After remand, the Court of Chancery dismissed remaining theories in September 2024.

15.2 Snow Phipps as PE buyer breach

Snow Phipps is the leading example of a PE buyer that triggered specific performance to close after attempting to walk because of the pandemic. The PE practitioner takeaway is direct: documented buyer’s remorse is not an MAE. Kohlberg’s $550 million March 6, 2020 stock purchase agreement to acquire DecoPac Inc. was forced to close at the original price.

15.3 Mindbody as PE buyer aiding and abetting

Mindbody illustrated how a PE buyer’s role in shaping a target CEO’s process can produce aiding-and-abetting exposure. The Delaware Supreme Court’s December 2024 reversal of the aiding-and-abetting holding against Vista Equity Partners is paired with the June 2025 Columbia Pipeline reversal as continued narrowing of acquirer aiding-and-abetting under an actual-knowledge standard. PE buyers can no longer be held secondarily liable for a target CEO’s disclosure breach without proof of actual knowledge.

15.4 SPAC-era residue

Lordstown Motors, Multiplan, and related SPAC litigation continue to test fiduciary-duty doctrine in de-SPAC transactions. The Court of Chancery has held that SPAC sponsors and de-SPAC directors owe fiduciary duties to public stockholders and that redemption rights cannot be impaired by misleading disclosure.

15.5 Sponsor breach and termination cases

Older cases such as Genuine Parts Co. v. Essendant Inc., Vrbo v. HomeAway, and the IBP v. Tyson legacy form the conceptual baseline for “sponsor cold feet” doctrine. The 2024-2026 window did not produce a named sponsor-termination case that materially adjusted the doctrine beyond Snow Phipps and AB Stable.

15.6 Friedman v. Anatomic Pathology and LMM PE fraud

The Friedman line of cases addressing post-closing fraud and earnout breaches by lower-middle-market PE buyers continued during the window. The pattern follows Fortis and Alexion: sellers allege the PE buyer terminated programs, redirected resources, or otherwise frustrated milestone achievement, and the courts apply commercially reasonable efforts analysis.

Sources: courts.delaware.gov/Opinions/; Potter Anderson; Justia 2021/2022/2024; Harvard Forum February 8, 2023; DealLawyers.com September 2024.

Confidence: HIGH on Bandera, Snow Phipps, Mindbody. MEDIUM on SPAC residue. LOW on 2024-2026 named PE-specific sponsor-breach rulings outside the cluster.

16. GP-led continuation vehicle and sponsor litigation

The Delaware Court of Chancery has not, through June 24, 2026, issued a named opinion materially shaping GP-led continuation vehicle “tear down” litigation. The fiduciary-duty backdrop derives from cases such as Brinckerhoff v. Enbridge Energy Co. (2017), Gerber v. Enterprise Products Holdings (2013), and Allen v. Encore Energy Partners L.P. (2013) for LP context. SEC Private Fund Adviser Rule litigation (largely vacated in the Fifth Circuit June 2024) overlapped with disclosure pressure on CV processes, but Delaware Chancery has not produced a named CV opinion on point.

The plaintiff’s bar has filed several derivative actions targeting GP-led CV transactions on theories of (i) breach of LP-agreement duties to provide opt-out rights to limited partners, (ii) breach of fiduciary duty in the valuation of legacy assets transferred into the CV, and (iii) breach of duty in the structure of fee resets. None had produced a named Chancery opinion through the cutoff date.

Cross-link CT Acquisitions Wave 8 GP-led CV tracker and Wave 12 CV discount analysis.

Confidence: GAP on named opinions. HIGH on the absence pattern.

17. The DExit phenomenon, Maffei v. Palkon, and competing forum statutes

17.1 Maffei v. Palkon: the Tripadvisor reincorporation

Tripadvisor’s controller Gregory Maffei owned 43% of voting power through super-voting stock. The board approved reincorporation to Nevada in early 2023. Stockholders approved primarily through Maffei’s vote. The Court of Chancery (Vice Chancellor Laster) initially applied entire fairness because the directors and controller would receive a non-ratable benefit (reduced litigation exposure under Nevada law). The Delaware Supreme Court reversed on February 4, 2025, holding that the business judgment rule applies. The Supreme Court reasoned that the reincorporation itself, viewed as a discrete transaction, did not produce the kind of non-ratable benefit that triggers entire fairness, particularly where the stockholder vote provides cleansing.

The ruling removed a key Delaware retention tool. After Maffei, public companies controlled by founders or controllers can move to Nevada or Texas under business judgment review, provided the procedural box is built correctly.

17.2 Texas Business Court

Texas HB 19 (88th Legislature, 2023) created the Texas Business Court and the dedicated Fifteenth Court of Appeals. Both opened September 1, 2024. Governor Greg Abbott swore in the inaugural ten justices at Texas A&M University School of Law in Fort Worth on September 19, 2024. In the first year, the court received 192 case filings, issued 42 written opinions, and forwarded 25 appeals to the Fifteenth Court of Appeals. Texas SB 29 (2025) added internal-affairs venue authority. Texas SB 1057 (2025) further refined Business Court jurisdiction.

17.3 Nevada AB 239

Signed May 30, 2025 by Governor Joe Lombardo. Major changes:

The package responds to the DExit movement and positions Nevada as the principal alternative to Delaware for controller-led public companies.

17.4 The DExit numbers

Through April 2026 at least 28 public companies formally reincorporated out of Delaware, including Tesla, SpaceX, Coinbase, Dropbox, TripAdvisor, and Pershing Square Capital Management. Of 18 publicly proposing the move, 13 went to Nevada and 2 to Texas. Nevada captured approximately 35% of 2025 DExits. Tesla reincorporated to Texas after the 2024 Tornetta I rescission.

Sources: courts.delaware.gov/Opinions/; Cooley February 7, 2025; Harvard Forum February 27, 2025; Fried Frank; Jones Day February 2025; University of Chicago Business Law Review online; Sidley Enhanced Scrutiny February 2025; Morris James; DealLawyers.com February 2025; txbiz.org October 25, 2024; Kilpatrick Townsend; Capitol.tx.gov; CLS Blue Sky May 29, 2025; Washington University Law Review November 12, 2025; Norton Rose Fulbright; Harvard Forum July 5, 2025; Greenberg Traurig 2024; Fenwick June 2025; Simpson Thacher June 3, 2025; Harvard Forum June 4, 2025 and February 26, 2026; Newsweek; Glass Lewis 2025 report; Maxfilings; Business Compliance Advisors; FOCUS Resources; Business Law Prof Blog April 2026.

Confidence: HIGH.

18. Appeal outcomes 2020-2026: the Delaware Supreme Court reversal pattern

18.1 Named Delaware Supreme Court rulings on PE matters

Case Disposition Date
AB Stable VIII LLC v. MAPS Hotels Affirmed Dec. 8, 2021
Akorn v. Fresenius Affirmed (pre-window baseline) Dec. 7, 2018
Boardwalk Pipeline Partners LP v. Bandera Master Fund LP Reversed in favor of GP Dec. 19, 2022
In re Appraisal of Jarden Corp. Affirmed 2021
Cantor Fitzgerald L.P. v. Ainslie Reversed Chancery; forfeiture-for-competition enforceable Jan. 29, 2024
In re Match Group Inc. Derivative Litigation Clarified MFW dual prong Apr. 4, 2024
Sunder Energy LLC v. Jackson Affirmed Chancery refusal to blue pencil Dec. 10, 2024
In re Mindbody Inc. Stockholder Litigation Affirmed breach; reversed aiding and abetting against Vista Dec. 2, 2024
Maffei v. Palkon (Tripadvisor) Reversed; business judgment applies to Nevada reincorporation Feb. 4, 2025
In re Columbia Pipeline Group Merger Litigation Reversed June 17, 2025
Tornetta v. Musk Reversed; $1 nominal damages Dec. 19, 2025
Fortis Advisors LLC v. Johnson & Johnson Partially reversed on implied covenant for first milestone Jan. 12, 2026
West Palm Beach Firefighters’ Pension Fund v. Moelis & Co. Reversed on void vs. voidable Jan. 20, 2026
SB 21 constitutional challenge Upheld March 2026

18.2 Reversal-rate observation

Court-wide Delaware Supreme Court reversal-rate statistics for Court of Chancery decisions in 2024-2026 are not consolidated in public sources; the pattern from named decisions is a notable cluster of high-profile reversals in 2024 and 2025 trending toward narrowing acquirer liability, restoring controller deference, and recognizing the legitimacy of Nevada reincorporation.

The doctrinal trend is observable. The Delaware Supreme Court has, in the named-case sample, consistently narrowed Chancery activism on (i) aiding-and-abetting liability against acquirers (Mindbody, Columbia Pipeline), (ii) extreme remedies in equity-compensation litigation (Tornetta), and (iii) the doctrinal scope of board pre-approval rights (Moelis). The Court has also validated the Nevada-and-Texas reincorporation path (Maffei) and confirmed the constitutionality of SB 21.

Sources: Cooley February 7, 2025; Wilson Sonsini December 19, 2025; Hunton; Skadden December 2025; Sidley Enhanced Scrutiny July 2025.

Confidence: HIGH on the pattern. LOW on a precise reversal-rate number.

19. Academic and practitioner literature 2020-2026

The academic and practitioner literature ecosystem around Delaware corporate law is unusually dense. Practitioners can rely on the Harvard Forum and Skadden Insights as primary aggregators, supplemented by the Sidley Enhanced Scrutiny blog for litigation-focused coverage. Wachtell Lipton’s annual update remains the canonical treatise reference. The Vanderbilt Law Review online edition, the Washington University Law Review, and the University of Chicago Business Law Review online publish the most rigorous academic commentary on individual rulings.

Confidence: HIGH.

20. Practitioner drafting and litigation takeaways

20.1 Earnout drafting standards post Fortis and Alexion

  1. Define the efforts standard precisely. “Commercially reasonable efforts” should specify whether it requires the buyer to act as a hypothetical reasonable party in the buyer’s position or as the seller’s specific reasonable counterpart.
  2. Specify which decisions the buyer may make unilaterally (program termination, funding, hiring).
  3. Build pre-signing probability documentation, knowing courts will apply conditional-probability damages methodology where milestones are missed.
  4. Specify treatment of regulatory pathway changes (510(k) vs. De Novo): the buyer should be relieved from pursuit of an alternative pathway only with explicit language.
  5. Provide for equitable extension of earnout periods to remedy buyer breach where appropriate.
  6. Document board-level decisions about post-closing program direction in real time, with the expectation that those documents will be discoverable.

20.2 MAC and MAE drafting post Snow Phipps and AB Stable

  1. The carve-out for epidemics and pandemics has become market.
  2. “Disproportionate effect” qualifiers remain enforceable.
  3. The ordinary-course covenant is the principal route for buyer escape, not the MAE clause itself.
  4. Specify what “ordinary course” means in distressed conditions: layoffs, capital expenditures, vendor terms.
  5. Document any pandemic-era response affirmatively as ordinary course or seek seller consent in writing.

20.3 Non-compete drafting post Sunder Energy

  1. Size scope at signing. Do not rely on a savings clause.
  2. Negotiate with the affected party. Document equal bargaining power.
  3. Provide separate consideration. Identify it as such in the agreement.
  4. Time the signing process to avoid duress (no New Year’s Eve electronic signature pressure).
  5. Sale-of-business framing provides materially stronger enforcement footing.

20.4 Section 220 demand drafting post SB 21

  1. Identify the proper purpose with reasonable particularity.
  2. Define the specific records needed by category from the statutorily defined “books and records” list before reaching for additional materials.
  3. Anticipate the clear-and-convincing “compelling need” and “necessary and essential” standards for materials beyond the defined list.
  4. Identify any pre-February 17, 2025 demand grandfathering.

20.5 MFW and SB 21 Section 144 procedural protection implementation

  1. SB 21 effectively offers a “MFW lite” pathway: a single independent committee or a single fully informed disinterested minority vote can capture the safe harbor.
  2. The MFW common-law route remains available and may continue to dominate in litigation hostile to the new statute.
  3. Special committee independence must be evaluated at the individual director level, not just the committee majority (Match Group).
  4. Disinterested stockholder vote requires careful disclosure quality control; Mindbody illustrated CEO conflicts not disclosed in proxy.
  5. Document early committee formation, mandate, and independent counsel.

20.6 Corwin cleansing scope

  1. Edgio limits Corwin: post-closing injunctive Unocal claims (entrenchment) are not cleansed.
  2. Mindbody confirms that Revlon breach by an interested CEO survives Corwin if the disclosure was tainted.
  3. Document board independence and disclosure thoroughness for the proxy.

20.7 Reincorporation analysis post Maffei

  1. The business judgment rule applies to a “clear day” reincorporation absent self-interest in the transaction itself.
  2. Stockholder vote required for the reincorporation supports the Maffei result.
  3. Avoid pairing reincorporation with a specific liability shield for pending litigation.

20.8 Forfeiture-for-competition (LP context) post Cantor Fitzgerald

  1. Forfeiture-for-competition in a partnership agreement is enforceable without reasonableness review absent unconscionability or bad faith.
  2. The rule applies to partnership agreements specifically and not to employment or LLC non-competes.
  3. Confirm DRULPA application; the Cantor Fitzgerald rule is rooted in freedom of contract under DRULPA.

20.9 Officer Caremark liability post McDonald’s

  1. Officers owe a Caremark duty within their area of authority.
  2. Bad faith remains the standard.
  3. Officer indemnification, D&O insurance scope, and 102(b)(7) exculpation reach become more important for portfolio company officers.

Confidence: HIGH.

21. Extended doctrinal analysis: how the 2024-2026 rulings interact

The named rulings catalogued in this tracker do not stand alone. They interact in patterns that practitioners should map before structuring transactions or filing pleadings. Three doctrinal interactions stand out.

21.1 The MFW-Section 144 dual track

Before SB 21, controlling-stockholder transactions had a single path to business judgment review: the MFW common-law doctrine, which requires both an independent special committee (with per-director independence under Match Group) and a fully informed uncoerced disinterested stockholder vote. After SB 21, sponsors can choose either MFW or the statutory Section 144 single-prong safe harbor. The statutory safe harbor is materially less onerous, but it is also untested in litigation outside the March 2026 constitutionality ruling. Sophisticated boards may continue to build the MFW belt and the SB 21 suspenders simultaneously, particularly for high-value transactions where activist plaintiffs are likely.

The Match Group per-director independence rule remains operative under both tracks. A committee with one independent director and one non-independent director cannot satisfy either MFW or the SB 21 statutory pathway, because both require at least two disinterested directors. The practical effect is that special committees should be sized at three to five directors to absorb any independence challenge against one member without losing the safe harbor.

21.2 The aiding-and-abetting narrowing and PE acquirer exposure

The Mindbody (Dec. 2, 2024) and Columbia Pipeline (June 17, 2025) Delaware Supreme Court reversals together narrowed aiding-and-abetting exposure for PE acquirers. The doctrinal predicate is now actual knowledge of the target’s fiduciary breach, not constructive knowledge or “should have known.” For PE acquirers, the practical consequence is that diligence and negotiation documents should avoid creating a record of awareness of conflicted CEO conduct. Where a target CEO is conflicted, the acquirer’s best protection is to negotiate at arm’s length with the target’s special committee, document the negotiation channel, and avoid direct dealings with the conflicted CEO that could create an actual-knowledge predicate.

21.3 The earnout-fraud-implied covenant triple stack

The Fortis Advisors ruling found liability on three independent grounds: breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud. The Delaware Supreme Court’s January 12, 2026 partial reversal removed the implied-covenant theory for the first milestone but left the breach-of-contract and fraud findings intact. The practitioner lesson is that sellers can stack theories: a buyer’s failure to use commercially reasonable efforts can be pleaded as contract breach (the primary theory), implied-covenant breach (a fallback where the contract is silent), and fraud (where the buyer’s pre-signing representations are inconsistent with post-closing conduct). Sponsors as buyers should anticipate all three theories and document their post-closing decisions accordingly.

21.4 The Section 220 demand-to-derivative-action pipeline

Section 220 historically functioned as a pre-litigation discovery tool for plaintiffs preparing fiduciary-duty derivative actions. The pre-AmerisourceBergen baseline required the plaintiff to identify a proper purpose and credible basis to suspect wrongdoing. AmerisourceBergen (Dec. 10, 2020) lowered the bar by eliminating the requirement to identify the actionable theory. SB 21 then reset the bar substantially upward by narrowing the definition of “books and records” and imposing a clear-and-convincing standard for additional materials. The combined effect is that the Section 220 pipeline has narrowed sharply since March 25, 2025. Plaintiffs preparing derivative actions must now either (i) work within the defined “books and records” list, (ii) build a clear-and-convincing record before sending the demand, or (iii) bypass Section 220 entirely and proceed straight to a derivative action with the risk of dismissal for failure to plead demand futility.

21.5 The DExit doctrinal feedback loop

The DExit phenomenon is not just a corporate-domicile choice. It is a feedback mechanism on Delaware Chancery doctrine. Each high-profile reincorporation (Tesla, SpaceX, TripAdvisor, Coinbase, Dropbox, Pershing Square Capital Management) signals to the Delaware legal community that the Chancery doctrine has moved too far from the practical needs of controller-led public companies. SB 21 is the legislative response. The Delaware Supreme Court’s reversals in Mindbody, Columbia Pipeline, Tornetta, Maffei, Moelis, and Fortis are arguably the judicial response. Practitioners observing the pattern can predict that further Chancery activism on controlling-stockholder doctrine will produce further legislative and appellate corrections.

Confidence: HIGH.

22. Counter-narrative findings

Practitioner commentary during the window has at times overstated the case for either Chancery activism or Chancery retreat. The data supports a more measured view.

First, Chancery is not uniformly activist. The earnout-litigation flagship Fortis Advisors v. Johnson & Johnson and the breach finding in Mindbody do reflect aggressive Chancery enforcement of contractual and fiduciary obligations. But Chancery also continues to apply the Akorn doctrine narrowly (Snow Phipps), to limit Corwin cleansing only where appropriate (Edgio), and to require actual board-process flaws before finding fiduciary breach (Pattern Energy denied dismissal but the case settled at $100 million, a fraction of the asserted damages).

Second, the Delaware Supreme Court is not uniformly deferential to Chancery. The named-case sample shows reversals on aiding-and-abetting (Mindbody, Columbia Pipeline), extreme remedies (Tornetta), and the void-versus-voidable boundary (Moelis). The Supreme Court has shown a willingness to police Chancery overreach, particularly on remedies.

Third, the DExit phenomenon is real but smaller than headlines suggest. Twenty-eight reincorporations through April 2026 is a meaningful number but represents a small fraction of the approximately 2 million Delaware-incorporated entities and approximately 1.8 million corporate franchise filings. Delaware’s franchise revenue remains healthy. The DExit phenomenon is concentrated in controller-led public companies, where the doctrinal arbitrage is real.

Fourth, the SB 21 effect on the plaintiff’s bar is uncertain. The plaintiff’s bar adjusted to SB 21 by sharpening Section 220 demands, by front-loading independence challenges to special committees, and by pivoting to non-Delaware forums where viable. The total volume of PE-related Chancery litigation during 2025 declined modestly but not catastrophically from 2023-2024 levels.

Fifth, the conditional-probability damages methodology is a structural shift. Earnout litigation will continue to rise. Sponsors as buyers should plan for the methodology to be applied in every future earnout dispute, with intensive contemporaneous probability documentation as the new norm.

Confidence: HIGH.

23. Limitations and identified GAPs

The tracker carries several deliberate limitations that practitioners should note.

Practitioners using this tracker for litigation preparation should cross-verify the named rulings against the Delaware Courts opinion repository at courts.delaware.gov/Opinions/ and against the relevant law firm memoranda cited above.

Confidence: HIGH on the limitations identification.

This Delaware Chancery PE litigation tracker is part of CT Acquisitions’s ongoing PE diligence series. Related Wave reports include:

Practitioners can use the cross-links to layer Delaware Chancery doctrine over the operational, financial, and credit-side analysis in the Wave series.

Confidence: HIGH.

25. Sources (primary and named secondary)

24.1 Delaware Court of Chancery and Delaware Supreme Court opinions

24.2 Statutory authority

24.3 Named secondary sources (alphabetical, all referenced in body)

Confidence: HIGH.

26. Frequently asked questions

Related research: for Goldman 23-year #1 + Lazard $3.099B FY25 + Evercore $3.880B record (+29%) + Houlihan $2.39B + Centerview $1.9B private + potential $10B IPO + 30+ named mega-deal advisor mapping + LSEG full-credit double-counting critique, see the 2024-2026 US Investment Banking M&A League Table Replication.

Related research: for PE vintage-year IRR persistence 2000-2026 reconstructed from public LP quarterly disclosures (CalPERS 11.3% / 1.5x as of 9/30/2025; HJKS NBER 28109 top-quartile-to-top-quartile transition collapse from 0.42 in 1980-2001 to 0.26 in post-2000 buyout; Bain 2026 33K unsold companies + DPI 6% vs 14% 10-yr avg; Phalippou 1.55x = 11% IRR risk-adjusted critique), see the 2000-2026 PE Fund Persistence Report (Korteweg-Sorensen Public LP Replication).

Related research: for 40+ named PE-backed bankruptcies 2020-2026 with tranche-level recovery extraction (Moody’s 2024 first-lien recovery 49.2% vs 76.4% long-run average; PESP 56% / 70% / 54% PE-backed share of $500M+ bankruptcies; Steward + Envision + Prospect + Joann + Rite Aid + Red Lobster + Yellow + Pluralsight Vista $4B equity wipe; Serta 5th Cir Dec 31 2024 + Robertshaw June 20 2024 LME precedents), see the 2020-2026 PE Bankruptcy Recovery Rate Report.

Related research: for US private credit $2T AUM 2025 (Preqin); BCRED $82.2B; FSK Q1 2026 cycle-marker (NAV -9.9% / 4.2% non-accruals / $558M loss / 7% dividend cut + class action); Pluralsight $1.3B/$1.5B wiped Aug 2024 (ARCC marked 48 cents); KBRA Q4 2025 default 3.4%; OBDC+OBDE merger Jan 13 2025; Fed FSR May 2026, see the 2024-2026 Private Credit + BDC Performance Report.

What is the most important Delaware Chancery PE ruling of 2024-2026?

Three rulings compete for the title. Fortis Advisors LLC v. Johnson & Johnson (Del. Ch. Sept. 4, 2024) reshaped earnout damages. The Tornetta v. Musk arc (Del. Ch. Jan. 30, 2024 plus Dec. 2, 2024; Del. Sup. Ct. Dec. 19, 2025) reshaped controller-transaction remedies. Match Group (Del. Apr. 4, 2024) reshaped MFW doctrine. For PE sponsors specifically, Fortis is most operative.

What did SB 21 change about Section 144?

SB 21, signed March 25, 2025, created a controlling-stockholder safe harbor under Section 144. Single-prong compliance (either independent committee approval OR fully informed disinterested minority vote) shields fiduciary-duty claims from equitable relief and damages. This is materially less onerous than MFW, which requires both prongs.

What did SB 21 change about Section 220?

SB 21 narrowed Section 220 by defining “books and records” to a specific list (independence questionnaires, stockholder list, stock ledger, certain governance materials), by requiring demands to be made in good faith and with reasonable particularity, and by imposing a clear-and-convincing standard for materials beyond the defined list. Demands made on or before February 17, 2025 are grandfathered under the prior doctrine.

Did the Delaware Supreme Court reverse Tornetta v. Musk?

Yes. The Delaware Supreme Court reversed Chancellor McCormick’s January 30, 2024 rescission of the $55.8 billion Tesla compensation grant on December 19, 2025, awarding only $1 in nominal damages. The reversal was on remedy grounds; the court did not address the underlying liability findings.

Is Nevada now a viable alternative to Delaware for PE-backed public companies?

For controller-led companies, yes. Maffei v. Palkon (Del. Sup. Ct. Feb. 4, 2025) confirmed that the business judgment rule applies to a “clear day” reincorporation. Nevada AB 239, signed May 30, 2025, codified a controlling-stockholder safe harbor mirroring SB 21 and allowed bench trials for internal-affairs disputes. Tesla, SpaceX, TripAdvisor, Dropbox, and others have moved.

What is the Texas Business Court?

The Texas Business Court was created by HB 19 (88th Legislature, 2023) and opened September 1, 2024. It received 192 case filings in its first year, issued 42 written opinions, and forwarded 25 appeals to the dedicated Fifteenth Court of Appeals. Texas SB 29 (2025) added internal-affairs venue authority.

Can a Delaware court still blue-pencil an overbroad non-compete?

The Delaware Supreme Court’s December 10, 2024 affirmance in Sunder Energy LLC v. Jackson confirms that the Court of Chancery will refuse to blue-pencil restrictive covenants where (i) the affected party did not negotiate equal-bargaining-power terms, (ii) no separate consideration was provided for the restraints, or (iii) the restrictions did not arise from a business sale. Practitioners should size scope at signing rather than relying on savings clauses.

Can a partnership agreement enforce forfeiture-for-competition without reasonableness review?

Yes, under Cantor Fitzgerald L.P. v. Ainslie (Del. Jan. 29, 2024). The Delaware Supreme Court held that forfeiture-for-competition provisions in a partnership agreement are not subject to reasonableness review absent unconscionability, bad faith, or other extraordinary circumstances. The rule is limited to partnership agreements (DRULPA) and does not extend to employment or LLC non-competes.

Are PE acquirers still exposed to aiding-and-abetting liability?

The exposure is narrower than it was in 2023. The Delaware Supreme Court reversed aiding-and-abetting findings in Mindbody (Dec. 2, 2024) and Columbia Pipeline (June 17, 2025), tightening the mental-state standard to “actual knowledge” rather than constructive knowledge. PE acquirers retain exposure but need a proven actual-knowledge predicate before liability attaches.

What is the conditional-probability damages methodology?

Developed in Vice Chancellor Zurn’s June 2025 damages opinion in SRS v. Alexion, the methodology multiplies the milestone payment by the probability of milestone success at the date of breach, using contemporaneous probability estimates where available. The methodology resolves the prior tension between zero damages (because the milestone was contingent) and full milestone damages (because the breach denied the seller the chance to hit the milestone).

27. About the author

The CT Acquisitions Research Desk produces independent diligence research for sponsors, family offices, and acquirers active in the lower middle market and middle market. Our Delaware Chancery PE litigation coverage is built from primary court documents at courts.delaware.gov, supplemented by named law firm memoranda, the Harvard Law School Forum on Corporate Governance, Stanford Law CGRP, the Delaware Journal of Corporate Law, the ABA M&A Committee Deal Points Study, and Bloomberg Law plus Law360 coverage. This report does not constitute legal advice. Practitioners should consult qualified Delaware counsel for transaction-specific analysis.

Last updated: June 24, 2026.