I Am Athlete, LLC v. IM EnMotive, LLC

                                COURT OF CHANCERY
                                      OF THE
                                STATE OF DELAWARE
   BONNIE W. DAVID                                                COURT OF CHANCERY COURTHOUSE
MAGISTRATE IN CHANCERY                                                     34 THE CIRCLE
                                                                       GEORGETOWN, DE 19947


                            Final Report: December 27, 2023
                           Date Submitted: December 19, 2023

    Jamie L. Brown, Esquire                     Gary W. Lipkin, Esquire
    Heyman Enerio Gattuso & Hirzel LLP          Patrick A. Lockwood, Esquire
    300 Delaware Avenue, Suite 200              Saul Ewing LLP
    Wilmington, Delaware 19801                  1201 N. Market Street, Suite 2300
                                                Wilmington, Delaware 19801

         RE:    I Am Athlete, LLC v. IM EnMotive, LLC,
                C.A. No. 2023-0332-BWD

   Dear Counsel:

         This final report resolves defendants IM EnMotive, LLC (“EnMotive”),

   EnMotive Company, LLC, and Steven Ginsburg’s (collectively, “Defendants”)

   motions to dismiss plaintiff I AM Athlete, LLC’s (“Plaintiff”) Verified Amended

   Complaint (the “Complaint”).

         In this action, Plaintiff, a California entity, seeks money damages for alleged

   breaches of an asset purchase agreement through which EnMotive acquired

   substantially all of Plaintiff’s assets. Plaintiff alleges that under the asset purchase

   agreement, EnMotive was required, but failed, to make commercially reasonable

   efforts to maximize the performance of the acquired business and to pay post-closing

   installment and earn-out payments.        Plaintiff’s sole basis for invoking equity
I Am Athlete, LLC v. IM EnMotive, LLC,
C.A. No. 2023-0332-BWD
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jurisdiction is a thinly pled veil-piercing theory. Although Defendants have moved

to dismiss in favor of arbitration, I do not reach arbitrability and instead recommend

dismissal for lack of subject matter jurisdiction, with leave to transfer to the Superior

Court pursuant to 10 Del. C. § 1902.

I.    BACKGROUND

      The following facts are taken from the Complaint and the documents

incorporated by reference therein.1

      A.     The Parties

      Plaintiff I Am Athlete, LLC (“Plaintiff”) is a California limited liability

company with its principal place of business in Los Angeles, California. Verified

Am. Compl. [hereinafter, “Compl.”] ¶ 1, Dkt. 28. Prior to October 2019, Plaintiff

owned the “imATHLETE” business, “which provided software for online

registration for athletic events and related products.” Id.




1
 See Freedman v. Adams, 

, at *5 (Del. Ch. Mar. 30, 2012) (“When a
plaintiff expressly refers to and heavily relies upon documents in her complaint, these
documents are considered to be incorporated by reference into the complaint[.]” (citation
omitted)). The First APA (defined below), which is incorporated by reference in the
Complaint, is attached as Exhibit A to Defendant IM EnMotive, LLC’s Opening Brief In
Support Of Its Motion To Dismiss. Dkt. 34.
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      Defendant EnMotive is a Delaware limited liability company with its

principal place of business in Buffalo Grove, Illinois. 

 EnMotive provides

products and services for athletic events such as marathons. Id. ¶ 2.

      According to the Complaint, “[a]t relevant times,” Defendant Steven

Ginsburg was President and a Member of EnMotive and “managed the day-to-day

operations of the entity.” Id. The Complaint alleges on information and belief that

EnMotive and Ginsburg “are alter egos, and that at relevant times, Ginsburg was

EnMotive’s sole managing member, controlled the company, had unfettered access

to its funds and commingled the same, including via ostensible loans and

distributions between EnMotive and Ginsburg.” Id. ¶ 3. The Complaint further

alleges on information and belief that “Ginsburg disregarded corporate formalities,

including by failing to hold board meetings at any time, and maintained family

member(s) on EnMotive’s payroll, including Ginsburg’s brother . . . .” Id. And, the

Complaint alleges on information and belief that EnMotive “was improperly

capitalized . . . via personal loans or payments (including undocumented loans) from

Ginsburg ranging into the six figures” and “had a negative net income with few

assets.” Id.

      Defendant EnMotive Company, LLC (“EnMotive Successor”) is a Delaware

limited liability company with its principal place of business in Pittsford, New York.
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Id. ¶ 4. The Complaint alleges that EnMotive Successor, which is wholly owned by

non-party Gannett Co. (“Gannett”),2 “was formed for the improper purpose of

shedding certain liabilities” that EnMotive owed to Plaintiff. Id.

      B.     Plaintiff Sells Substantially All Of Its Assets To EnMotive In A
             First Asset Sale.

      In October 2019, Plaintiff and EnMotive entered into an asset purchase

agreement (the “First APA”) through which EnMotive acquired substantially all of

Plaintiff’s assets, including the imATHLETE business (the “First Asset Sale”).

Compl. ¶ 10; see also Def. IM EnMotive, LLC’s Op. Br. In Supp. Of Its Mot. To

Dismiss [hereinafter, “OB”], Ex. A, Dkt. 34.

      Under the First APA, EnMotive agreed to pay Plaintiff a $770,000 “Closing

Payment” due at closing; a “First Installment Payment” of $550,000 due on or before

January 31, 2022; and a “Second Installment Payment” of $380,000 due on or before

January 31, 2023. OB, Ex. A § 1.5(a). EnMotive also agreed to pay Plaintiff “Earn-

out Payments” “not to exceed a total of one million dollars” under certain

circumstances.   Id. §§ 1.5(c), 1.6(a).   The First Installment Payment, Second




2
 The Complaint alleges that by March 2022, Gannett “owned and controlled both
EnMotive Successor and EnMotive . . . .” Compl. ¶ 19.
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Installment Payment, and Earn-out Payments are subject to a “Clawback” if the

imATHLETE business fails to meet certain revenue thresholds. Id. § 1.9(b).

       The First APA includes procedures governing the calculation of Earn-out

Payments and any Clawback amounts. For Earn-out Payments, the First APA

requires that EnMotive present to Plaintiff an “Earn-out Notice” that includes

EnMotive’s proposed determination of the Earn-out Payment and a detailed

calculation of revenue. Id. § 1.9(a). For Clawback amounts, the First APA requires

that EnMotive present to Plaintiff a “Clawback Notice” indicating EnMotive’s

election to claw back any Clawback amount. Id. § 1.9(b). In either circumstance,

Plaintiff may deliver an “Objection Notice” and dispute the proposed amounts. Id.

§ 1.9(c)(i). If, following a negotiation period, the parties do not agree on the amount

of the Earn-out Payment or Clawback:

       the items in dispute (but no other matters) shall be submitted to an
       independent accounting firm of recognized regional or national
       standing (excluding [EnMotive]’s accounting firm) mutually agreed
       upon and jointly retained by [EnMotive] and [Plaintiff] (the ‘Final
       Arbiter’). The Final Arbiter shall make a final and binding
       determination as to all matters in dispute relating to the calculation of
       the Earn-out Payment and/or Clawback.

Id. § 1.9(c)(ii).
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      C.     EnMotive Allegedly Breaches The First APA.

      The First APA requires EnMotive to make “commercially reasonable efforts

to maximize the performance of the [imATHLETE] Business” from January 1, 2021

through December 31, 2023. OB, Ex. A § 1.6(e).

      According to the Complaint, “[r]ather than making commercially reasonable

efforts to maximize the performance of the [imATHLETE] Business, EnMotive

instead shuttered the Business,” including by “ceasing all efforts to generate business

for the imATHLETE platform and instead devoting all efforts and resources to

generating business for the EnMotive platform.” Compl. ¶ 14. The Complaint

alleges that by doing so, EnMotive “denied Plaintiff the benefits of its bargain to

receive post-closing consideration by making it a certainty that there would be

insufficient revenue to avoid the Clawback Provisions.” Id. ¶ 15.

      In January 2022, Plaintiff sent EnMotive a letter requesting the First

Installment Payment. Id. ¶ 17. On January 26, 2022, Ginsburg responded that

EnMotive would not be paying the First Installment Payment, the Second

Installment Payment, or any Earn-out Payments. Id.

      D.     EnMotive Sells Substantially All Of Its Assets To EnMotive
             Successor In A Second Asset Sale.

      In March 2022, EnMotive and EnMotive Successor entered into an asset

purchase agreement (the “Second APA”) through which EnMotive Successor
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acquired substantially all of EnMotive’s assets, including the imATHLETE business

(the “Second Asset Sale”). Compl. ¶ 19. Under the Second APA, EnMotive

Successor agreed to purchase EnMotive’s assets and certain liabilities for $1.7

million, with $1 million to be held in escrow until the earlier of the resolution of

Plaintiff’s claims or the passage of one year without Plaintiff filing a claim. Id.

¶ 20. The Complaint alleges that “the amount ostensibly reserved in escrow to cover

those claims is insufficient to cover EnMotive’s liabilities,” and that the Second

APA “expressly purported to carve out from EnMotive Successor’s purchase any

liability that EnMotive incurred in connection with [the First APA].” Id.

      The Complaint further alleges on information and belief that “EnMotive

funneled the proceeds that it received from [the Second Asset Sale] to Ginsburg,

therefore siphoning away from EnMotive the assets necessary to satisfy its

obligations under [the First APA].” Id. ¶ 21.

      E.    Procedural History

      On March 17, 2023, Plaintiff initiated this action through the filing of a

Verified Complaint.    Dkt 1.    On July 17, 2023, Plaintiff filed the operative

Complaint. Dkt. 28.

      The Complaint asserts three counts. Count I alleges that EnMotive and

Ginsburg breached the First APA “by (1) failing to make commercially reasonable
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efforts to maximize the performance of the [imATHLETE] Business, instead

diverting resources and revenues from the Business, and (2) refusing to pay Plaintiff

the required post-closing amounts after shuttering the Business and selling all of

EnMotive’s assets, or in the alternative, by failing to provide timely notice under the

Clawback Provisions.” Compl. ¶ 28. Count II alleges that EnMotive and Ginsburg

breached the implied covenant of good faith and fair dealing inherent in the First

APA “(1) by shuttering the Business instead of making commercially reasonable

efforts to maximize its performance, and (2) by entering [the Second APA], which

transferred to Gannett and/or Ginsburg the assets that should have been used to

satisfy EnMotive’s liabilities to Plaintiff under [the First APA], including its post-

closing payment obligations.” Id. ¶ 32. Count III alleges that EnMotive Successor

tortiously interfered with the First APA.

      On July 28, 2023, Defendants moved to dismiss the Complaint pursuant to

Court of Chancery Rules 12(b)(1) and 12(b)(6) (the “Motion to Dismiss”). Dkt. 31.

On September 1, 2023, Defendants filed opening briefs in support of the Motion to

Dismiss. See OB, Dkt. 34; Defs. Steven Ginsburg And EnMotive Company, LLC’s

Op. Br. In Supp. Of Their Mot. To Dismiss, Dkt. 35. On September 29, 2023,

Plaintiff filed answering briefs in opposition to the Motion to Dismiss. Pl.’s Ans.

Br. In Opp’n To Def. IM EnMotive, LLC’s Mot. To Dismiss [hereinafter, “AB”],
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Dkt. 38; Pl.’s Ans. Br. In Opp’n To Defs. Steven Ginsberg And EnMotive Company,

LLC’s Mot. To Dismiss, Dkt. 39. On October 23, 2023, Defendants filed reply briefs

in support of the Motion to Dismiss. Defs. Ginsburg And EnMotive Company,

LLC’s Reply Br. In Supp. Of Mot. To Dismiss, Dkt. 43; Def. IM EnMotive, LLC’s

Reply Br. In Further Supp. Of Its Mot. To Dismiss [hereinafter, “RB”], Dkt. 44.

With leave of Court, Plaintiff filed a sur-reply in opposition to the Motion to Dismiss

on November 22, 2023. Pl.’s Sur-Reply In Opp’n To Def. IM EnMotive, LLC’s

Mot. To Dismiss [hereinafter, “SRB”], Dkt. 53.

      I heard oral argument on the Motion to Dismiss on December 19, 2023.

II.   ANALYSIS

      Defendants move to dismiss the Complaint pursuant to Court of Chancery

Rule 12(b)(1) for lack of subject matter jurisdiction, on the grounds that the First

APA requires the parties to arbitrate disputes relating to the calculation of Earn-out

Payments and the Clawback of Installment Payments. Alternatively, Defendants

move to dismiss the Complaint pursuant to Court of Chancery Rule 12(b)(6) for

failure to state a claim upon which relief may be granted. At oral argument, I raised,
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sua sponte, whether the Court of Chancery has subject matter jurisdiction over this

action irrespective of Defendants’ position on arbitration.3

       “The Court of Chancery is a court of limited jurisdiction.” Yu v. GSM Nation,

LLC, 

, at *2 (Del. Ch. July 7, 2017). Title 10, Section 342 of the

Delaware Code states that “[t]he Court of Chancery shall not have jurisdiction to

determine any matter wherein sufficient remedy may be had by common law, or

statute, before any other court or jurisdiction of this State.” 10 Del. C. § 342. The

Court “maintains subject matter jurisdiction ‘only when (1) the complaint states a

claim for relief that is equitable in character, (2) the complaint requests an equitable

remedy when there is no adequate remedy at law or (3) Chancery is vested with

jurisdiction by statute.’” Smith v. Scott, 

, at *14 (Del. Ch. Apr.

23, 2021) (citation omitted).




3
  When granting the parties’ proposed briefing schedule, I instructed them to “address this
Court’s subject matter jurisdiction over the claims asserted in the complaint.” Dkt. 12.
They did not. I surmise that is because the parties agreed in the First APA “not to assert,
by way of motion, as a defense or otherwise . . . that . . . the subject matter [of Plaintiff’s
claims] may not be enforced in or by” this Court. OB, Ex. A § 6.14(a). The Court
nevertheless has an “independent obligation to consider whether it has subject matter
jurisdiction,” notwithstanding the parties’ refusal to engage on the issue directly. Naughty
Monkey LLC v. Marinemax Ne. LLC, 

, at *3 n.35 (Del. Ch. Dec. 23,
2010).
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      The Complaint does not seek an equitable remedy, and the Court lacks

statutory jurisdiction over Plaintiff’s claims.4 Instead, the Complaint asserts, as its

sole jurisdictional basis, that Ginsburg is subject to personal liability for breach of

contract or the implied covenant of good faith and fair dealing under an “alter ego,”

or “veil-piercing,” theory. A claim premised on veil piercing “is an equitable claim.”

Yu, 

, at *3; see also Winner Acceptance Corp. v. Return on Cap.

Corp., 

, at *5 (Del. Ch. Dec. 23, 2008) (“Under Delaware law,

‘piercing the corporate veil may be done only in the Court of Chancery, when the

purpose of the action is to obtain a judgment against individual stockholders or

officers.’” (citation omitted)). But “Chancery jurisdiction is not conferred by the

incantation of magic words[,]” and simply asking to pierce the corporate veil is not

an “open sesame” to equity jurisdiction. Yu, 

, at *3 (footnote

omitted) (first quoting McMahon v. New Castle Assocs., 

 (Del.

Ch. 1987); then Int’l Bus. Machs. Corp. v. Comdisco, Inc., 

 (Del.

Ch. 1991)). Rather, to support jurisdiction over this action, Plaintiff’s veil-piercing

theory must be sufficiently pled.




4
  This Court lacks jurisdiction over Plaintiff’s claims under 8 Del. C. § 111 because
Plaintiff is not a Delaware entity.
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       “Persuading a Delaware court to disregard the corporate entity is a difficult

task.” Yu, 

, at *3 (citation and internal quotation marks omitted).

“[B]ecause Delaware public policy does not lightly disregard the separate legal

existence of corporations, a plaintiff must do more than plead that one corporation

is the alter ego of another in conclusory fashion in order for the Court to disregard

their separate legal existence.” MicroStrategy Inc. v. Acacia Rsch. Corp., 

, at *11 (Del. Ch. Dec. 30, 2010). “In order to state a cognizable claim to

pierce the corporate veil of [a corporation], plaintiffs must allege facts that, if taken

as true, demonstrate the Officers’ and/or the Parents’ complete domination and

control of the [corporation].” Wallace ex rel. Cencom Cable Income P’rs II, Inc.,

L.P. v. Wood, 

 (Del. Ch. 1999). In determining whether veil

piercing is appropriate, the Court may consider “‘(1) whether the company was

adequately capitalized for the undertaking; (2) whether the company was solvent;

(3) whether corporate formalities were observed; (4) whether the dominant

shareholder siphoned company funds; and (5) whether, in general, the company

simply functioned as a facade for the dominant shareholder.’” MicroStrategy Inc.,

, at *11 (citation omitted). “While these factors are useful, any

single one of them is not determinative.” Manichaean Cap., LLC v. Exela Techs.,

Inc., 

, 706-07 (Del. Ch. 2021). The overarching issue is whether “the
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corporate structure [has] cause[d] fraud or similar injustice”—in other words,

whether the corporation is “a sham and exist[s] for no other purpose than as a vehicle

for fraud.” Wallace, 

.

      The allegations in the Complaint are insufficient to support a cognizable veil-

piercing theory. For one, the Complaint does not allege facts that could support an

inference that EnMotive functioned as a façade for Ginsburg. To the contrary, the

Complaint alleges that prior to entering the First APA, EnMotive “provid[ed]

products and services for events such as marathons” and “serviced the same general

customer base” as Plaintiff. Compl. ¶¶ 2, 9; see also AB at 3-4 (explaining that “[a]t

the time of the asset purchase, EnMotive was in a different, yet related, business”

and occupied a “complementary position within the racing industry”). In other

words, the Complaint alleges that EnMotive was not a “sham,” but, instead, ran a

real business. See Cleveland-Cliffs Burns Harbor LLC v. Boomerang Tube, LLC,

, at *4-6 (Del. Ch. Sept. 5, 2023) (concluding veil-piercing theory

was “deficient” where the plaintiff’s “own allegations” describing two companies’

separate businesses “subvert[ed] the notion” that one company existed as an “alter

ego” for another, and “belie[d] any inference that [the companies] functioned as a

single economic entity”); DG BF, LLC v. Ray, 

, at *27 (Del. Ch.

Mar. 1, 2021) (rejecting veil-piercing theory where the complaint alleged that the
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corporation ran an active business and therefore was not a “sham”); Yu, 

, at *4 (same).

      The Complaint also alleges that EnMotive “had a negative net income with

few assets” and “was capitalized via personal loans or payments (including

undocumented loans) from Ginsburg ranging into the six figures,” and that, “at

relevant times, Ginsburg . . . had unfettered access to [EnMotive’s] funds and

commingled the same” and “disregarded corporate formalities, including by failing

to hold board meetings at any time . . . .” Compl. ¶ 3. But these allegations, each

premised on information and belief, are conclusory and unsupported by any pled

facts. See Verdantus Advisors, LLC v. Parker Infrastructure P’rs, LLC, 

, at *2-3 (Del. Ch. Mar. 2, 2022) (concluding rote allegations that a limited

liability company “observed few if any corporate formalities,” was “inadequately

capitalized,” “siphoned funds,” and “lack[ed] assets” were “not the exceptionally

rare stuff of veil-piercing”); DG BF, LLC, 

, at *27 (rejecting

conclusory allegations based on “information and belief” that a corporation was

undercapitalized and being used as the individual defendants’ “personal piggy

bank”); Yu, 

, at *4 (concluding veil-piercing allegations were

insufficient to support jurisdiction where the complaint “include[d] no non-

conclusory allegations that [the company] was inadequately capitalized from
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February 2013 when [the plaintiff] provided the first loan to January 2016 when [the

company] first failed to service the loan” (emphasis added)).5

       Finally, the Complaint alleges on information and belief that “EnMotive

funneled the proceeds that it received from the Second Asset Sale to Ginsburg,

therefore siphoning away from EnMotive the assets necessary to satisfy its

obligations under [the First APA].” Compl. ¶ 20. The Complaint pleads no facts

from which the Court could reasonably infer that funds were “funneled” to Ginsburg

through the Second Asset Sale. Notably, neither the Complaint nor the parties’

briefing attaches the Second APA, so the terms of that agreement are a mystery.6

The facts alleged, however, undermine EnMotive’s conclusory “funneling” theory.

Namely, the Complaint alleges that Gannett—not Ginsburg—“owned and controlled

both EnMotive Successor and EnMotive” at the time of the Second Asset Sale. Id.

¶ 19.7 The Complaint contains no well-pled facts supporting Plaintiff’s theory that


5
  See also Neurvana Med., LLC v. Balt USA, LLC, 

, at *23 (Del. Ch. Feb.
27, 2020) (refusing to accept as true an allegation made on information and belief where
the allegation was unsupported by well-pled facts); O’Gara v. Coleman, 

,
at *6 (Del. Ch. Feb. 14, 2020) (same); Griffin Corp. Servs., LLC v. Jacobs, 

, at *6 (Del. Ch. Aug. 11, 2005) (same).
6
  The Complaint does, however, allege that EnMotive Successor has held $1 million in
escrow for Plaintiff’s claims, undermining Plaintiff’s theory that proceeds were “funneled”
to Ginsburg. Compl. ¶¶ 20-21.
7
 See also AB at 9 (“At the time of this transaction, Plaintiff believes the same parent (i.e.,
Gannett) owned and/or controlled both EnMotive Successor and EnMotive, such that this
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Gannett, a public company that Ginsburg is not alleged to control, “funneled” assets

from one affiliate to another to benefit Ginsburg personally.8

       Because Plaintiff’s veil-piercing theory is insufficiently pled, it cannot be used

to invoke this Court’s jurisdiction.9          Accordingly, the Complaint should be

dismissed, with leave to transfer to the Superior Court. See Specialty DX Hldgs.,

LLC v. Lab’y Corp. of Am. Hldgs., C.A. No. 2018-0833-SG (Del. Ch. May 20, 2019)

(TRANSCRIPT) (dismissing action with leave to transfer to the Superior Court where

the complaint alleged claims for breach of an asset purchase agreement concerning

earnout calculations and defendants moved to dismiss under contractual dispute


was an insider transaction intended to benefit Gannett and/or its affiliates to the detriment
of Plaintiff’s rights.”); id. at 29 (“EnMotive then entered [the Second APA] to transfer its
assets to EnMotive Successor, which is owned by the same parent as EnMotive.”).
8
  Even if well pled, the transfer of funds in the Second Asset Sale could not satisfy the
“fraud or injustice” element of the veil-piercing analysis, which requires that fraud arise
“‘from an inequitable use of the corporate form itself as a sham, and not from the
underlying claim.’” Cleveland-Cliffs, 

, at *6 (citation omitted). This
Court has explained that “‘[t]o hold otherwise would render the fraud or injustice element
meaningless, and would sanction bootstrapping.’” 

 (citation omitted).
9
  Plaintiff argues that if the Court finds its veil-piercing allegations insufficient to support
subject matter jurisdiction, it should be permitted to take jurisdictional discovery. SRB at
3-6. Given the lack of any well-pled facts supporting Plaintiff’s veil-piercing theory,
jurisdictional discovery would amount to a fishing expedition and should, therefore, be
denied. See Neurvana Med., LLC v. Balt USA, LLC, 

, at *2 (Del. Ch.
Oct. 10, 2019) (noting that “the decision to grant jurisdictional discovery is discretionary”);
cf. P’rs & Simons, Inc. v. Sandbox Acqs., LLC, 

, at *9 (Del. Ch. July 26,
2021) (explaining, in the context of personal jurisdiction, that “[a] plaintiff cannot use
jurisdictional discovery to simply ‘fish for a possible basis for this court’s jurisdiction’”
(citation omitted)).
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resolution procedures; concluding the Court of Chancery lacked subject matter

jurisdiction where the complaint failed to assert an equitable claim or seek equitable

relief); B&C Hldgs., Inc. v. Temperatsure Hldgs., LLC, C.A. No. 2018-0645-JTL, at

20 (Del. Ch. Feb. 8, 2019) (TRANSCRIPT) (dismissing action for lack of subject matter

jurisdiction “subject to transfer to Superior Court”; observing that the Superior Court

is “just as capable as [the Court of Chancery] of determining whether an arbitrating

accountant . . . has the look and feel of an expert”).

III.   CONCLUSION

       For the reasons explained above, I recommend that the Court dismiss the

Complaint for lack of subject matter jurisdiction, with leave to transfer to the

Superior Court pursuant to 10 Del. C. § 1902. This is a final report pursuant to Court

of Chancery Rule 144(d)(1).10

                                                 Sincerely,

                                                 /s/ Bonnie W. David

                                                 Bonnie W. David
                                                 Magistrate in Chancery


cc:    All counsel of record (by File & ServeXpress)

10
   See Ct. Ch. R. 144(d)(1) (“In actions that are not summary in nature or in which the
Court has not ordered expedited proceedings, any party taking exception shall file a notice
of exceptions within eleven days of the date of the report.”).