Palisades Growth Capital II, L.P. v. Backer, C.A. No. 2019-0931-JRS (Del. Ch.), aff'd, No. 156, 2020 (Del. 2021)
Our firm, together with Hogan Lovells US LLP, represented private equity investor Palisades Growth Capital in a highly expedited litigation to invalidate deceptive Board actions taken by a director and former CEO at Palisades’ portfolio company, QLess, and to determine control of QLess following the deception. On March 26, 2020, the Court of Chancery issued a post-trial decision invalidating the challenged Board actions as inequitable under Schnell and returning control of QLess to its state prior to the actions. That ruling was subsequently affirmed by the Delaware Supreme Court on January 15, 2021 in an opinion holding, among other things, that “[p]roof of an outright lie is not necessary to justify equitable remedies” and that “[r]egardless of the type of meeting or form of communications, Delaware law does not countenance deception designed to manufacture a quorum or otherwise induce director action.” Links to both the Court of Chancery and Delaware Supreme Court opinions are below.