Investment Firms Unable to Convert Vistar Media Notes to Equity

A Delaware chancellor ruled Monday that an angel investor’s “implausible” omission in its contract with Vistar Media Inc. leaves it and other venture capital firms without the right to convert their investments into equity.

The firms are only entitled to the right to repayment of their investments with interest at the maturity date of their convertible promissory notes with Vistar, Vice Chancellor Sam Glasscock III ruled in an opinion in the Delaware Court of the Chancery. The plaintiffs were unable to show Glasscock any evidence in business custom and usage of such notes in the venture capital industry or in ...