Schertz v. Garcia II, C.A. No. 2023-0600-KSJM (Del. Ch. 2024), aff’d, C.A. No. 446, 2024 (Del. 2025)

Ross Aronstam & Moritz, together with Latham & Watkins, successfully represented Carvana Co., along with its majority stockholder and members of Carvana’s board of directors and senior management team, in defending against a stockholder derivative action alleging various breaches of fiduciary duty and unjust enrichment.  The plaintiff alleged, among other things, that the individual defendants failed to oversee Carvana’s compliance with various state titling and registration laws pertaining to used vehicle sales, and that certain individual defendants profited from insider trades of Carvana stock based on non-public information.  In September 2024, the Court of Chancery dismissed the complaint for failure to state a claim.  On appeal, the plaintiff asserted that the Court of Chancery erred in dismissing the insider trading claim against Carvana’s majority stockholder.  In May 2025, after oral argument, the Delaware Supreme Court affirmed the Court of Chancery’s decision.