This Week in Chancery Court: Blue Bell, Seegrid Corp. Trial Prep

The Delaware Chancery Court is gearing up for what may be the first trial on corporate oversight claims, in a long-running investor lawsuit over a deadly listeria outbreak in Blue Bell Creameries ice cream.

It’s business as usual all week in Delaware state courts, even if federal courts were closed Monday for Washington’s Birthday:

Tuesday: Marchand v. Barnhill, Del. Ch., No. 2017-0586, pretrial conference 2/17/26.

At issue: It’s been over a decade since three people died in an outbreak traced to Blue Bell Creameries’ products. Shareholder claims against Blue Bell’s top holding company have been on a long journey since the lawsuit was filed in 2017: Dismissed initially by the Chancery Court, they were revived in a 2019 Delaware Supreme Court decision that upended the consensus that oversight claims were difficult for shareholders to win. Not much happened for years while a special litigation committee of the holding company’s board investigated and decided to pursue the claims itself. Then that committee, in an even more unusual move, returned the case to the original plaintiff’s estate. The original plaintiff, Jack Marchand, died during the litigation. Most recently, the company argued a $60 million settlement in 2020 in a separate outbreak-related lawsuit had released it from the pending claims—an argument Vice Chancellor Nathan A. Cook rejected in a Dec. 10 opinion. Cook has now scheduled a pretrial conference call, ahead of a five-day trial scheduled to begin Feb. 23. It would be the first trial on lack-of-oversight claims; a promising test with claims that Mark Zuckerberg and other Meta Platforms Inc. leaders turned a blind eye to red flags involving Cambridge Analytica ended abruptly on the second day of trial in July with a settlement.

Court action: Teleconference

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Friday: Visnic v. Seegrid Corp., Del. Ch., No. 2022-0202, pretrial conference 2/20/26.

At issue: Former Seegrid Corp. employees claimed the robotics business enticed them with promises of equity, then rewrote those terms as the company’s value skyrocketed so directors and their affiliates could buy out the workers at a bargain. The March 2022 lawsuit concerned an incentive plan the company allegedly adopted after emerging from bankruptcy in 2015 as a Giant Eagle Inc. subsidiary. Cook narrowed the claims in a November 2023 ruling and now holds a pretrial conference call. A three-day trial is scheduled to begin March 3.

Court action: Teleconference

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