In re: Dynamk Fund Advisors LLC

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN RE: DYNAMK FUND ADVISORS C.A. No. 2026-0002-JTL LLC, a Delaware limited liability company, and DYNAMK CAPITAL LLC, a Delaware limited liability company. OPINION GRANTING MOTION TO DISMISS Date Submitted: February 11, 2026 Date Decided: May 20, 2026 John M. Seaman, Eliezer Y. Feinstein, Madison Barnes, ABRAMS & BAYLISS LLP, Wilmington, Delaware; Attorneys for Petitioner Mario M. Kranjac. J. Peter Shindel, Jr., FOX ROTHSCHILD LLP, Wilmington, Delaware; Attorneys for Respondents Dynamk Fund Advisors LLC and Dynamk Capital LLC. LASTER, V.C.  Two siblings are the co-managers of a manager-managed limited liability company (the “Company”).1 One sibling—the brother—filed this action seeking an order dissolving the Company. He claims that he and his sister are deadlocked at the manager level, making it impracticable for the Company to carry on its business in conformity with its LLC agreement. He invokes Section 18-802 of the Delaware Limited Liability Company Act (the “LLC Act”), which authorizes dissolution under those circumstances. The Company contends that under its LLC agreement, the brother cannot pursue any litigation involving the Company unless he first obtains approval from a majority of the Company’s members (the “Antisuit Provision”). Because the brother has not obtained majority-member approval for this lawsuit, the Company maintains that the case must be dismissed. The Antisuit Provision appears in Article VI of the Company’s LLC agreement. The first section of that article addresses the managers’ authority. That section contains two subsections. The first subsection authorizes the managers to divide responsibility for running the business among themselves, but requires member consent for any non- day-to-day decisions. By default, the LLC Act contemplates that the holders of a 1 There are actually two LLCs. Their governing agreements are substantively identical, but their member-level ownership differs. For simplicity, this decision focuses on the Company and its LLC agreement in the above-the-line text and addresses the other LLC in footnotes. At every level, the analysis is more straight- forward for the other LLC. majority of the member interests can take action, so the first section establishes a general requirement of majority-member approval for non-ordinary-course acts. The second subsection identifies four items that cannot be taken without “Majority Approval of the Members.” The LLC agreement defines “Majority Approval” consistent with the LLC Act’s default rule. One of the four items is commencing any litigation involving the Company. The requirement to obtain Majority Approval before commencing litigation manifests as the Antisuit Provision. The two subsections work together to implement a familiar conceptual structure. The first subsection establishes a general rule. The second subsection identifies four specific items that the drafters wanted to make sure everyone understood fell within the general rule. Under this structure, the Antisuit Provision addresses the ability of a manager to cause the Company to take action (the “Manager-Authority Reading”). The Antisuit Provision does not address the ability of a member to assert its rights as a member, whether those rights arise under the LLC agreement, the LLC Act, or other sources of law. It also does not cover derivative claims, because those are claims brought by members that fall outside the scope of the limitation on managerial authority. The sister, however, reads the Antisuit Provision broadly as providing that no one—including a member—can bring any claim involving the Company without Majority Approval (the “Every-Claim Reading”). She concludes that her brother 2 cannot pursue this litigation because a claim for dissolution involves the Company, and he did not obtain majority approval before filing suit. The Company currently has three members, each owning a minority member interest. If the Every-Claim Reading is correct, then none of the members can assert their statutory, contract, and common law rights unless at least one of the other members consents.2 Under the Every-Claim Reading, the Antisuit Provision functions as an all-encompassing covenant not to sue, except where the majority agrees. Delaware law approaches covenants not to sue with skepticism, making that reading dubious.3 Presumably the implied covenant of good faith and fair dealing would constrain the other members’ discretionary right to block suit to some degree,4 but the implied covenant’s role is limited, and over the past two decades, the Delaware Supreme Court has consistently rejected its application.5 Introducing the 2 The situation is worse at the other LLC. Although initially the second LLC had other members in addition to the siblings, the sister currently controls a majority of the member interests. If the Every-Claim Reading is correct, then she becomes the judge in her own case, because she can single-handedly foreclose majority approval, rendering the brother’s member-level rights illusory. 3 See generally New Enter. Assocs. 14, L.P. v. Rich, 295 A.3d 520 (Del. Ch. 2023). 4 See Baldwin v. New Wood Res. LLC, 283 A.3d 1099, 1118–19 (Del. 2022). 5 See, e.g., Johnson & Johnson Fortis Advisors LLC, 352 A.3d 229, 259–60 (Del. 2026) (reversing post-trial decision awarding relief for breach of the implied covenant); Glaxo Gp. Ltd. v. DRIT LP, 248 A.3d 911, 920–91 (Del. 2021) (same); Oxbow Carbon & Mins. Hldgs., Inc. v. Crestview-Oxbow Acquisition, LLC, 202 A.3d 482, 507–08 (Del. 2019) (same); see also Winshall v. Viacom Int’l, Inc., 76 A.3d 808, 3 implied covenant as an overlay would be cumbersome and introduce substantial uncertainty as to the members’ ability to enforce their member-level rights. In substance, a member would have to sue to find out if the member could sue.6 For derivative claims, the Every-Claim Reading conflicts with the provision in the LLC Act that governs when a member can sue on an LLC’s behalf. The language of that provision does not contain the words “unless otherwise provided in the limited liability company agreement,” a phrase otherwise strewn across the LLC Act.7 Its absence suggests that the statutory provision governing derivative actions is mandatory such that an LLC agreement cannot override it. If so, then the Every- Claim Reading conflicts with a mandatory statutory term.8 815–16 (Del. 2013) (affirming pleading-stage dismissal of implied covenant claim); Nemec v. Shrader, 991 A.2d 1120, 1125 (Del. 2010) (same). 6 As odd as that might sound, it is what the demand regime requires for derivative actions. The difference is that the Every-Claim Reading imposes a far more constraining gateway requirement that lacks the escape hatches of demand futility or wrongful refusal. 7 See 6 Del. C. § 18-1001 (“A member or an assignee of a limited liability company interest may bring an action in the Court of Chancery in the right of a limited liability company to recover a judgment in its favor if managers or members with authority to do so have refused to bring the action or if an effort to cause those managers or members to bring the action is not likely to succeed.”). 8 I acknowledge that when interpreting the LLC Act’s section on statutory dissolution, this court held that the absence of the oft-appearing phrase did not signal a mandatory term and that an LLC agreement could waive the right to judicial dissolution. See R & R Cap., LLC v. Buck & Doe Run Valley Farms, LLC, 2008 WL 3846318, at *5–6 (Del. Ch. Aug. 19, 2008). In my view, Doe Run was wrongly decided. The absence of the otherwise nigh-ubiquitous “unless otherwise provided in the limited liability company agreement” strongly signals a mandatory term. To reach the contrary result, Doe Run treated LLCs as purely contractual entities, which 4  For claims for breach of fiduciary duty, whether derivative or direct, the problem grows even worse. The Every-Claim Reading operates as discretionary immunity that the majority can deploy as it wishes.9 Although the LLC Act authorizes LLC agreements to eliminate fiduciary duties (and many do), the LLC overstates the case. In re Carlisle Etcetera LLC, 114 A.3d 592, 605–06 (Del. Ch. 2015) (explaining why an LLC is not a purely contractual entity); accord Obeid v. Hogan, 2016 WL 3356851, at *5 n.2 (Del. Ch. June 10, 2016) (explaining that LLCs are primarily contractual, not purely contractual); see In re Seneca Invs. LLC, 970 A.2d 259, 261 (Del. Ch. 2008) (“An LLC is primarily a creature of contract . . . .”). More broadly, the ability to dissolve an entity is a core function of the chartering state, comparable to the chartering state’s power to bring an entity into existence. Dissolution is so closely linked to the power of the chartering state that this court has declined to consider dissolving an entity chartered by another state. In re Coinmint, LLC, 261 A.3d 867, 907–08 (Del. Ch. 2021); see generally Peter B. Ladig & Kyle Evans Gay, Judicial Dissolution: Are the Courts of the State that Brought You In the Only Courts that Can Take You Out?, 70 Bus. Law. 1059 (2015) (arguing that the chartering state’s courts have exclusive jurisdiction over dissolution). It does not seem to me that private parties should be able to deprive the chartering state of such an important function. There is also the risk that a non-dissolvable LLC will devolve into “some alternative entity version of Sartre’s Huis Clos.” Huatuco v. Satellite Healthcare, 2013 WL 6460898, at *1 n.2 (Del. Ch. Dec. 9, 2013), aff’d, 93 A.3d 654 (Del. 2014) (TABLE). That risk in turn has led this court to assert its traditional equitable power of dissolution. See Carlisle, 114 A.3d at 605. That equitable work- around would not be necessary if the statutory dissolution provision were non- waivable. Other jurisdictions have made what I regard as a more prudent choice. The Revised Uniform Limited Liability Company Act does not permit an LLC agreement to divest the courts of the chartering state of their statutory authority over dissolution. Rev. Unif. Ltd. Liab. Co. Act § 105(c)(9) (Unif. L. Comm’n 2006). New York does not either. See Youngwall v. Youngwall Realty, LLC, Index No. 22266/07 (N.Y. Sup. Ct. July 28, 2008) (citing Matter of Dissolution of Validation Rev. Assocs., Inc., 646 N.Y.S.2d 149 (App. Div. 1996), rev’d on other grounds, 690 N.E.2d 487 (N.Y. 1997)). 9 In the second LLC, where the sister controls a majority of the member interests, she can withhold majority approval as a form of de facto immunity (subject to the implied covenant of good faith and fair dealing). 5 agreement in this case does not.10 The LLC agreement also preserves liability for fraud, gross negligence, intentional misconduct, and any breach of their fiduciary duty.11 Yet the Every-Claim Reading would turn the preservation of those remedies into half-measures, because a member only could enforce them if a majority interest signed off.12 If I were ruling on a clean slate, I would reject the Every-Claim Reading, apply the Manager-Authority Reading, and hold that the Antisuit Provision does not apply to this case because the brother is suing for dissolution as a member. But the situation is more complicated. The siblings previously engaged in an arbitration that produced a detailed award. A New York court has confirmed the award as a judgment. Both the award and judgment repeat the language of the Antisuit Provision and declare that it constrains the brother. The judgment has issue-preclusive effect, so this court is bound by it. 10 See Dkt. 1, Ex. A, § 6.06(A). The second LLC’s governing agreement has the same structure. See Dkt. 1, Ex. B, § 6.06(A). 11 Dkt. 1, Ex. A, § 6.06(A). The second LLC’s governing agreement has the same structure. Dkt. 1, Ex. B, § 6.06(A). 12 For the second LLC, the problem is particularly stark. Because the sister owns a majority member interest, the Every-Claim Reading nullifies the liability- preserving provision, because the sister decides whether a claim could be filed. Indeed, under the Every-Claim Reading, a member could not sue without the sister’s consent even if the sister had committed a clear breach of the duty of loyalty, such as embezzling the second LLC’s funds. There is some irony to that example, because an arbitrator has found that the brother—not the sister—embezzled company funds. Dkt. 11, Ex. B (the “Award”), ¶ 169. 6 Unfortunately, it is not entirely clear what the judgment means. Neither the award nor the judgment spends much time analyzing the Antisuit Provision. Both treat its meaning as self-evident. Both therefore repeat its language in a matter-of-fact way that provides some support for the Every-Claim Reading. Three aspects of the award, however, provide insight into how the arbitrator understood the Antisuit Provision. First, the arbitrator applied the Antisuit Provision to dismiss the brother’s derivative claims. The arbitrator also noted that the Antisuit Provision would apply to the derivative claims that the sister and another member filed, but they held a majority of the member interests and therefore could provide Majority Approval. 13 Those rulings indicate that the arbitrator viewed the Antisuit Provision as applying to any company claim, including derivative claims (the “Company-Claim Reading”). Second, the award recognizes that the brother can enforce his contractual information rights under the LLC agreement. That suggests that the arbitrator did not view the Antisuit Provision as applying to the brother’s ability to assert direct claims or personal claims, including attempts to enforce rights he possessed under the LLC agreement. An attempt to enforce an information right is a claim “involving the Company,” so that outcome disconfirms the Every-Claim Reading. That outcome makes sense under the Company-Claim Reading, because a member’s attempt to 13 For the second LLC, the sister held a majority of the member interests and hence could authorize any derivative claims herself. 7 enforce one of its rights under the LLC agreement is a direct claim belonging to the member, not a claim belonging to the Company. Third, the arbitrator did not reference the Antisuit Provision when addressing the sister’s claim for breach of the implied covenant of good faith and fair dealing inherent in the LLC agreement. The arbitrator also did not reference the Antisuit Provision when addressing the sister’s claim for defamation based on her brother’s criticisms of her actions involving the Company. Both were claims “involving the Company,” so those outcomes again disconfirm the Every-Claim Reading. They are again consistent with the Company-Claim Reading because neither a claim for defamation nor a member’s attempt to enforce a right under the LLC agreement constitute company claims. There is no indication that the arbitrator considered, much less endorsed, the Manager-Authority Reading. At no point did the arbitrator distinguish between (i) a manager’s ability to cause the Company to sue or to assert claims on behalf of or involving the Company and (ii) a member’s ability to sue derivatively or assert claims involving the Company. Although I would not have adopted the Company-Claim Reading independently, under principles of issue preclusion, that reading is binding. Applied to this case, the Company-Claim Reading means that the Antisuit Provision does not prevent the brother from seeking dissolution. As a member, the brother has the right to sue for dissolution under the LLC Act. That is a direct cause of action that the brother can assert in his capacity as a member. Conceptually, it is no different than 8 the brother’s right to seek books and records under the LLC agreement as a member, which the arbitrator acknowledged the brother could pursue. But that does not mean the brother has stated a claim on which relief can be granted. The arbitrator also interpreted the scope of the provisions governing managerial authority and held, effectively, that the brother has none. Under principles of issue preclusion, that reading is binding. Because the brother effectively has no managerial authority, there is no deadlock. This is not a situation where deadlock exists at the manager level that enables a CEO to continue to operate free of governing-body oversight. Under the award and judgment, the sister has managerial authority. It is not reasonably conceivable that a deadlock exists. Nor is it reasonably conceivable that it is impracticable to carry on the Company’s business. The motion to dismiss is granted. I. FACTUAL BACKGROUND The facts come from the petition, the documents it incorporates by reference, supplemental letters provided by the parties, and factual findings from the award that binds the parties under principles of issue preclusion (the “Award”).14 A. The Companies And Their Governance Structure In 2015, the brother-sister team of Mario and Daniella Kranjac launched a 14 The supplemental letters addressed the member interest structure of the two LLCs. See Dkts. 21–22. The petition had not accurately described the member interest structure of the Company. 9 venture capital firm that would manage investment funds focused on early-stage life sciences companies.15 Daniella was a biochemical engineer with 25 years’ experience in the life sciences industry. Mario was a corporate lawyer who had founded and ran a law firm. The venture capital firm operated through Dynamk Fund Advisors LLC, which this decision calls the Company. Mario drafted its governing agreement (the “LLC Agreement”).16 The Company initially had multiple members. During the events relevant to this litigation, its members were Mario, Daniella, and Reinhard Vogt, another veteran of the life sciences industry. Each held a minority position.17 Article VI of the LLC Agreement is titled “Company Management.” Section 6.01 is titled “Management by Managers.” It has two subsections. The first subsection establishes a manager-managed structure, names Daniella and Mario’s affiliates as managers, and addresses the scope of their authority in general terms (the “General-Authority Provision”). It states: The day-to-day management and operations of the Company shall be conducted by the following managers: DK Member and MK Member 15 This decision refers to the siblings by their first names, without suggesting familiarity or intending disrespect. 16 Dkt. 1, Ex. A. 17 Mario and Daniella also formed Dynamk Capital LLC (“Capital”) to serve as the investment manager for the funds they planned to form. Capital’s LLC agreement is substantively identical to the Company’s LLC agreement. See Dkt. 1, Ex. B. Initially Capital’s members consisted of Mario, Daniella, and a few others. During the events relevant to this litigation, Mario and Daniella were its only members. Daniella held a majority of the member interests with Mario owning the rest. 10  (hereinafter referred to as the “Managers”). The Managers shall divide responsibilities among themselves; provided, however, that any material or non-day-to-day decisions shall require Member consent. Subject to and limited by the provisions of this Agreement, the Managers . . . shall have the authority, discretion, obligation and responsibility to manage and control the affairs of the Company to the best of their ability . . . and . . . shall appoint and oversee the officers of the Company and shall make all decisions and take all actions with respect thereto.18 Rather than bringing Mario and Daniella’s affiliates into the mix, this decision continues to refer to them individually. The General-Authority Provision could have been clearer in its allocation of authority. It plainly establishes a multi-manager structure, and that type of structure typically seeks to mirror the governance structure of a corporation. In a corporation, there are generally three levels of authority. First, there are day-to-day issues, which officers and employees principally handle. Next, there are board-level issues, consisting of more significant business issues and questions of policy that the board of directors must address. Finally, there are major issues that can require stockholder approval. Under the Delaware General Corporation Law (the “DGCL”), the issues in the last category are few, and they require an initial board recommendation followed by stockholder approval.19 But corporations often construct governance structures that give stockholders approval rights over a range of actions. Historically, those 18 LLC Agreement § 6.01(A). 19 See, e.g., 8 Del. C. §§ 242, 251, 271, 275. 11 rights had to appear in the charter,20 although some issues (like super-majority voting standards or quorum requirements) could appear in the bylaws.21 Today, approval rights can appear in governance agreements.22 Some aspects of the General-Authority Provision reflect a three-level structure. The reference to the managers appointing and overseeing officers suggests that officers would handle the day-to-day issues. The presence of multiple managers suggests a board that would handle board-level issues. So does language empowering the managers with “the authority, discretion, obligation and responsibility to manage and control the affairs of the Company to the best of their ability,” which resembles the DGCL’s familiar and foundational statement that “[t]he business and affairs of every corporation organized under this chapter shall be managed by or under the direction of a board of directors, except as may be otherwise provided in this chapter or in its certificate of incorporation.”23 And the requirement of majority-member approval suggests there are some issues that would correspond to stockholder-level issues. But the most specific language in the General-Authority Provision contemplates a two-level structure, not a three-level structure. It states that “[t]he 20 See, e.g., id. §§ 102(a)(4), 102(b)(1), 141(a), 151, 212(a). 21 See, e.g., id. §§ 109, 216. 22 See id. § 122(18). 23 Compare LLC Agreement § 6.01(A) with 8 Del. C. § 141(a). 12 day-to-day management and operations of the Company shall be conducted” by the managers, then states that “any material or non-day-to-day decisions shall require Member consent.”24 That language distinguishes between (i) day-to-day issues, which managers can handle and inferably empower officers to address, and (2) material or non-day-to-day decisions that require member consent. The stronger reading is therefore that the General-Authority Provision establishes a two-level structure, although the provision is arguably ambiguous. As we will see, the arbitrator interpreted the provision as establishing a two-level structure, and that interpretation is binding. The General-Authority Provision is only the first of two subsections in Section 6.01. The second subsection identifies a list of specific items that require majority- member approval (the “Specific-Item Provision”). It states: Majority Approval of the Members shall be required prior to any non- waivable provisions of the Act [sic], or: (i) amendment, modification, termination or waiver of rights under this Agreement; (ii) executing a recourse or a confessed judgment promissory note or otherwise confessing a judgement against the Company in connection with any threatened or pending legal action; (iii) admitting any other person as a Member; or (iv) commencement of any litigation or arbitration proceedings involving the Company and settlement of any such proceedings.25 Item (iv) is the Antisuit Provision. The Specific-Item Provision is not a model of clarity, as demonstrated by its 24 LLC Agreement § 6.01(A). 25 Id. § 6.01(B). 13 garbled lead-in about “non-waivable provisions of the Act.” As significant, the Specific-Item Provision speaks in the passive voice. It starts with the statement “Majority Approval of the Members shall be required prior to” a list of actions. It does not identify a subject who will be doing the acting. Although the Specific-Item Provision lacks an explicit subject, its placement in the LLC Agreement and relationship to the General-Authority Provision speaks powerfully to whom the provision addresses. Recall that Article VI of the LLC Agreement is titled “Company Management,” and that Section 6.01 is titled “Management by Managers.” Section 6.01(A)—the General-Authority Provision— speaks generally to the managers’ authority and requires majority-member approval for actions that go beyond day-to-day decisions. The Specific-Item Provision follows immediately and identifies specific items that require majority-member approval. The Specific-Item Provision thus logically addresses manager authority. It identifies specific items that the drafters wanted everyone to understand would require majority-member approval before a manager could take them. The relationship between the General-Authority Provision and the Specific- Item Provision might not be so clear if the Specific-Item Provision used a different standard for majority approval. The Specific-Item Provision starts with the phrase “Majority Approval of the Members shall be required.” That language differs from the statement in the General-Authority Provision that “any material or non-day-to-day decisions shall require Member consent.” But is there any difference? The LLC Agreement defines Majority Approval as 14 “[t]he affirmative vote of Members owning greater than fifty percent (50%) of the Percentage Interests.”26 The LLC Agreement defines “Percentage of Membership Interest” as “the percentage in the Company” held by the member.27 Majority Approval thus means approval by members holding more than 50% of the member interest. What does member consent mean? It means consent from the members. By default under the LLC Act, the affirmative vote of members holding a majority of the member interests is controlling.28 The LLC Agreement does not define member consent to mean anything else. Member consent under the General-Authority Provision thus means the same thing as Majority Approval under the Specific-Item Provision. Both require approval from holders of a majority of the member interests (the “Majority-Approval Requirement”) before a manager can take action that is material or not part of the Company’s day-to-day business. The General-Authority Provision establishes that general rule. The Specific-Item Provision makes clear that four specific items (about which there otherwise might be debate) fall within the general rule.29 26 Id. § 2.01. 27 Id. Technically it refers to the percentage “shown opposite the name of such Member on Exhibit “A” attached hereto, as the same may be adjusted from time to time.” Id. 28 6 Del. C. § 18-402. 29 The Award reaches the same conclusion by making a factual finding. After noting that the General-Authority Provision refers to member consent, the Award 15 B. The Actual Division Of Work Although the General-Authority Provision nominally made both Daniella and Mario managers, Daniella always handled the Company’s management. Mario performed legal work as needed. When doing so, Mario did not act as a manager or even as an in-house general counsel. He treated the Company as any other client of his firm and billed the Company for his time. In 2016, the Company formed its first investment fund: Dynamk Life Sciences Fund, L.P. (the “Original Fund”). Daniella and Vogt raised most of the capital. The investors became limited partners in the Original Fund. The Company serves as the general partner of the Original Fund.30 C. The Disputes After the Company formed the Original Fund, the siblings’ relationship grew strained. Mario’s law firm had drafted the Original Fund’s limited partnership agreement and private placement memorandum, but when negotiating with a global pharmaceutical company over a potential capital commitment, the pharmaceutical states: “While there was no direct testimony offered at the Hearing as to whether ‘Member consent’ required that such consent be by Majority Approval or unanimous, the common understanding of the Parties appears to be that Majority Approval is sufficient for ‘Member consent’ to material or non-day-to-day decisions.” Award ¶ 138. In a footnote, the Award states: “That the parties expressly provided for unanimous consent elsewhere in the 2020 LLC Agreements (e.g., Section 10.01) shows that had the Parties intended to require unanimous consent of the Members for any material or non-day-to-day decisions, they knew how, and chose not, to do so.” Id. ¶ 138 n.60. 30 Capital acted as the Original Fund’s investment manager. 16 company raised questions about the documents. The Company had to retain Morgan, Lewis & Bockius to revise the documents. Mario insisted on supervising Morgan Lewis, and he billed the Company an amount nearly equal to Morgan Lewis’s bill. Not only that, but it was his firm’s drafting that had caused the problems in the first place. Daniella concluded that Mario had charged the Company excessive fees for poor quality work. Starting in 2016, Mario took on another significant additional commitment by serving as mayor of Englewood Cliffs, New Jersey. Controversies surrounded his tenure, and investors in the Original Fund expressed concern about adverse publicity. In 2020, Mario apologized to the Dynamk team and promised to step back from politics. But he continued his political activities. He also continued to generate controversy, including referrals to the New Jersey State Bar for disciplinary action and to the New Jersey Attorney General for potential prosecution relating to a public records dispute. The Company became embroiled in that dispute and was forced to spend over $50,000 on legal fees because Mario had conducted government business using his Dynamk email address. Mario also became adversarial and defensive toward Daniella, the Company’s employees, and their contractors and consultants. Daniella asked Mario to limit his communications with Company personnel, but Mario refused. In an effort to address the problem, Daniella set up an outbound-email screening tool for Mario’s account. D. Daniella Founds Avant Bio. By 2021, the Original Fund had completed its investment period and was no 17 longer evaluating new investments. The Company shifted its focus toward managing and monetizing the Original Fund’s investments with the goal of distributing capital to its limited partners. With the Original Fund entering a new phase, Daniella and Mario discussed forming a successor fund. They could not agree on a governance structure or an economic split, so the concept was abandoned. In 2022, Daniella told Mario that if they could not agree on a successor fund, she would strike out on her own. In May 2023, Daniella formed her own venture capital firm that would operate under the name Avant Bio. It too would focus on life sciences, tech-bio, and health tech investments. Because the Company was not making new investments through the Original Fund, Daniella did not see any conflict between Avant Bio and the Company. Daniella asked some of the Company’s personnel to work for Avant Bio as employees or consultants. No one used the Company’s confidential information or assets. E. The Award In November 2023, Mario filed an arbitration against Daniella, Avant Bio, Vogt, and members of the Dynamk team. Mario demanded arbitration both in his own name and derivatively on behalf of the Company. The demand asserted claims for breach of contract, breach of fiduciary duty, shareholder oppression, ultra vires acts, indemnification, civil conspiracy, contractual fraud, fraudulent inducement, 18 libel and defamation, and conversion.31 In response, Daniella, Vogt, and their co-defendants asserted nine counterclaims against Mario. The claims included breach of contract, breach of fiduciary duty, indemnification, defamation, conversion, fraud, and tortious interference with business relations. Unlike Mario, the defendants only asserted claims in their own names; they did not assert claims on behalf of the Company. The parties conducted extensive discovery, and the arbitrator presided over a three-day evidentiary hearing. The parties submitted post-hearing briefs and responses to the arbitrator’s questions. On August 8, 2025, the arbitrator issued a 99- page ruling in the form of the Award. The Award rejected all of Mario’s claims. The Award also rejected most of the counterclaims, but granted relief on the counterclaims for defamation and indemnification. The Award included a series of declarations and factual findings addressing disputes under the LLC Agreement. Those rulings included: • Mario and Daniella never agreed to divide their managerial responsibilities equally.32 31 Mario asserted parallel claims involving both the Company and Capital. To make matters simpler, the above-the-line text continues to discuss only the Company. The arbitrator issued identical rulings involving Capital. 32 Award ¶ 163. 19 • Mario never assumed any responsibilities beyond his general counsel role and did not undertake additional duties beyond his legal work and attending meetings with certain investors.33 • Mario was not entitled to an order granting him “equal management rights per the Operating Agreement.”34 • Mario “has no unilateral authority to make any management determinations or decisions . . . on behalf of, or regarding [the Company] . . . without Majority Approval.”35 Those rulings fundamentally altered the managerial structure of the Company. Instead of acting as co-equal managers, Daniella effectively became sole manager. The Award also made several rulings involving the Antisuit Provision. The first ruling held that Mario breached the Antisuit Provision by asserting derivative claims without first obtaining Majority Approval: Mr. Kranjac breached [the Antisuit Provision] by commencing this arbitration, individually and on behalf of [the Company] without the Majority Approval of the Members . . . , which forced [the Company] to incur expense in defending against Mr. Kranjac’s derivative claims. Mr. Kranjac’s breach of [the Antisuit Provision] was willful and knowing inasmuch as the 2020 LLC Agreements were prepared by him or under his supervision and was taken in violation of the prohibition on a Member/Manager from [sic] “perform[ing] . . . (iv) any act without any consent or ratification which is required to be consented to or ratified by the Members pursuant to any provisions of this Agreement.”36 33 Id. 34 Id. ¶¶ 166–167. 35 Id. ¶ 172; accord id. at 97, Declaration #5. 36 Id. ¶ 297 (citations omitted). The quoted language about a “Member/Manager” performing an act requiring consent appears in Section 6.03 of the LLC Agreement, titled “Limitations on Authority.” It states: “No Member/Manager shall have any authority to perform (i) any act in violation of any applicable law or regulation thereunder, (ii) any act in contravention of this 20 This passage thus focused on derivative claims brought on behalf of the Company, consistent with the Company-Claim Reading. The Award next applied the same reasoning to the breach of contract and conversion claims that Daniella and Vogt had asserted. The Award first rejected the proposition that Daniella and Vogt could assert those claims directly: With respect to Mr. Kranjac’s breaches of . . . 6.01(B) . . . the analysis of Ms. Kranjac’s conversion claim against Mr. Kranjac . . . applies to Ms. Kranjac’s and Mr. Vogt’s breach of contract claim as well: to wit, their lack of standing to bring a breach of contract claim directly against Mr. Kranjac inasmuch as his breaches resulted in material harm to [the Company] and their failure to assert a derivative claim on behalf of the [Company] . . . are procedural grounds which preclude them from moving forward on their breach of contract claim based on the contravention of . . . 6.01(B). See Clifford Paper, 2021 WL 2211694 (claims alleging a breach of an individual plaintiff’s contract rights under LLC agreement are not direct because the resulting injury damages the LLC rather than the individual).37 The Award then noted that if Daniella and Vogt had asserted the claims derivatively, the Antisuit Provision would apply.38 Once again, the Award viewed the Antisuit Agreement or failing to do any act required by this Agreement, (iii) any act which would make it impossible to carry on the ordinary business of the Company, or (iv) any act without any consent or ratification which is required to be consented to or ratified by the Members pursuant to any provisions of this Agreement.” LLC Agreement § 6.03. A provision that deprives an actor of the ability to exercise power on behalf of an entity renders any non-compliant action voidable. See Moelis & Co. v. W. Palm Beach Firefighters’ Pension Fund, — A.3d —, —, 2026 WL 184868, at *6–8 (Del. Jan. 20, 2026). 37 Award ¶ 299 (citations omitted). 38 Id. ¶ 324 (“Respondents take the alternative position that Ms. Kranjac ‘can maintain’ a derivative action on behalf of Capitol [sic] . . . . While there is no question that Ms. Kranjac as the holder of the ‘Majority Approval of the Members’ may 21 Provision as applying to derivative claims, consistent with the Company-Claim Reading. The Award next turned to Daniella’s request for “an award confirming that under [the Antisuit Provision], Mr. Kranjac is not authorized to commence legal proceedings on behalf of, or involving, [the Company] without Majority Approval.”39 That language simply tracks the Antisuit Provision without addressing how it operates. The Award cited its analysis of Daniella