This Week in Chancery Court: TripAdvisor Appeal, Trade Desk

TripAdvisor Inc. will argue this week for the reversal of a Delaware Chancery Court opinion allowing shareholders to pursue damages over the travel review and booking website operator’s planned reincorporation in Nevada.

A look at what else is coming up in Chancery Court and the Delaware Supreme Court this week:

Tuesday: In re SwervePay Acquisition LLC, Del. Ch., No. 2021-0447, trial 10/28/24.

At issue: SPOSC Investment Holdings LLC allege Blue Star Innovation Partners and New Mountain Capital defrauded them during negotiations to buy SwervePay LLC’s payment facilitator technology in 2020 for $10 million plus post-closing earnouts. Former top executives at SwervePay say in a brief that non-compete agreements they signed in the deal are unenforceable because of fraudulent statements made about the revenues of a financial software maker the investment firms planned to combine with SwervePay. The investment firms, the buyers in the deal, say in a pretrial brief that the sellers misrepresented the stability of SwervePay’s relationship with its most important vendor, and they missed post-merger milestones for the earnout payments.

Court action: A five-day trial begins Monday in Wilmington, Del.

Blue Star, New Mountain Sued for Fraud by SwervePay Ex-Leaders

Wednesday: Maffei v. Palkon, Del., No. 125,2024, oral arguments 10/30/24.

At issue: TripAdvisor and its controlling shareholder, George Maffei, will argue to the high court that moving under Nevada’s stronger litigation protections for fiduciaries doesn’t constitute a material benefit requiring stricter judicial review, as the Chancery Court decided Feb. 20. Nevada argues in an amicus brief supporting TripAdvisor that its critics exaggerate the differences in policy decisions between the states. The investors challenging TripAdvisor’s relocation plans say in a brief that the move wasn’t approved by an independent special committee and was “overwhelmingly rejected by minority stockholders.”

Court action: The Delaware Supreme Court hears oral arguments in Dover, Del.

TripAdvisor Argues Delaware’s Relocation Standards Are Too High

Wednesday: AG Mobile Holdings LP v. H.I.G. Mobile LP, Del. Ch., No. 2023-1103, oral arguments 10/30/24.

At issue: Audax Group LP countersued its private equity rival H.I.G. Capital LLC in November 2023, about a week after H.I.G. brought fraud claims in Delaware Superior Court over a $915 million telecom-software deal. H.I.G. seeks to dismiss the Chancery Court case, arguing in a brief that it’s “a tactical ploy to distract” from the other litigation that claims executives at Audax affiliates artificially inflated Mobileum Inc.’s revenues before selling a majority stake in the venture to H.I.G. Audax says in a brief that almost from the beginning of the partnership, H.I.G. “ran the business like its own private fiefdom.”

Court action: Oral arguments on the motion to dismiss will be heard in Wilmington, Del., before Delaware Superior Court Judge Meghan A. Adams, who is also presiding over a related case.

Audax Countersues H.I.G. Over $915 Million Deal Fraud Claims

Wednesday: Gunderson v. Trade Desk Inc., Del. Ch., No. 2024-1029, oral arguments 10/30/24.

At issue: Vice Chancellor Paul A. Fioravanti Jr. fast-tracked litigation alleging that billionaire Jeff Green’s plan to move Trade Desk Inc.'s corporate home to Nevada is an effort to avoid Delaware laws that restrict insider self-dealing. The shareholder suing Green and other board directors wants Fioravanti to block the reincorporation until the advertising tech company obtains supermajority approval for the plan from its stockholders, according to a brief supporting a motion for summary judgment. Green and the directors also have filed a motion for summary judgment, arguing in a brief that the relocation “requires only a majority vote.”

Court action: Oral arguments on the motions will be heard in Wilmington, Del.

Trade Desk’s Jeff Green Sued Over Delaware-to-Nevada Relocation