Issue No. 3 — August 24, 2026

Lead Matter

TSVC v. Foothill Ventures — who owns a venture track record? (N.D. Cal., No. 5:24-cv-08991-EKL)

TSVC (formerly TEEC Angel Fund, seed investor in Zoom in 2011) alleges that Foothill Ventures — founded in 2017 by former TSVC affiliates — has falsely advertised itself in the U.S. and China as a successor firm and presented elements of TSVC's track record as its own; Foothill has contested the claims throughout. An earlier arbitration between the individual partners rejected contractual objections to the former partners' creation of a successor fund and their use of the predecessor funds' track records, but the federal court declined to dismiss the management entities' advertising claims on that basis at the pleading stage (August 2025). In a publicly available June 11, 2026 order, the court dismissed with prejudice the California unfair-competition claims against Foothill Management and Foothill I as untimely; the corresponding claims against Foothill II and III, the Lanham Act claims against all defendants, and the declaratory claim survived. Discovery had already produced an April court order. No liability determination has been made on the surviving claims. Performance attribution after a partner split — which individuals, entities, and funds may claim which investments — is governed by a patchwork of trademark, false advertising, and adviser-marketing rules, and this is one of the few detailed public litigations of that question. The editor's analysis of the attribution question appeared in Law360 Expert Analysis on July 22, 2026.

On The Docket

Raffaelli v. Brookfield — a fund leader's exit, litigated (Cal. Super. Ct., San Mateo County)

Brookfield's former venture capital head alleges wrongful termination and whistleblower retaliation. His complaint attributes more than $1.75 billion in assets under management to three venture funds and four additional investment vehicles combined, and lists approximately $1.331 billion for the three funds; those are the plaintiff's pleaded figures. He alleges the termination followed his objections to a fund-platform migration he contends limited partners were misled about, including an alleged $46 million offer he characterizes as conditioned on supporting statements he believed inaccurate. Brookfield has called the suit “absolutely without merit.” After removal and remand (October 2025), a demurrer to the third amended complaint and a deposition dispute were before the court; all allegations are contested and untested. The pleadings put at issue what a sponsor may tell limited partners about a strategy migration — a fund-level question, which is why an employment case appears here.

SBV v. Burgerville — a contractual removal right, allegedly refused (Del. Ch., filed June 2026)

An investor alleges the company refused to honor its contractual right to remove two board managers and that an improperly constituted board continued acting, invoking Section 18-110 of the Delaware LLC Act — the summary proceeding in which the Court of Chancery determines the validity of a contested manager removal and who is entitled to serve. The validity of the removals is the question to be adjudicated, not a settled fact. Sponsor board rights in LLC structures are creatures of contract, and Section 18-110 is the procedure through which a disputed removal is decided.

Ruling In Focus

In re Trados — the exit where the common received nothing (Del. Ch. 2013)

The canonical venture-exit decision: a $60 million sale in which the preferred received approximately $52.2 million, management approximately $7.8 million under an incentive plan, and the common nothing — approved by a board including three VC designees, with no special committee and no fairness opinion. After trial, the court found the process unfair but the transaction entirely fair, because the common had no economic value before the merger. The frame it established still governs: directors owe their duties to the corporation and its stockholders and, when the interests of preferred and common diverge, are to maximize value for the benefit of the common as residual claimants — the doctrinal ancestor of the designee-conflict and dilutive-round matters in Issues Nos. 1 and 2.

Doctrine Watch

Delaware's 2025 amendments and controller transactions

Delaware's March 2025 DGCL amendments restructured review of conflicted and controller transactions: statutory safe harbors under amended Section 144 (approval by a disinterested committee or an informed disinterested-stockholder vote for most controller transactions; both for a controller going-private transaction; or a showing of fairness as an alternative under the statute), a statutory definition of controlling stockholder with specified voting-power thresholds, and narrowed books-and-records inspection. The amendments do not apply to actions completed or pending by February 17, 2025. How the amended framework interacts with pending recapitalization litigation — including the Cloudflare matter (Issue No. 2) — is a closely watched question in Delaware practice. The Docket will track decisions applying the amended provisions as they issue.

Also Tracking

TSVC — discovery under the April order • Raffaelli — the pending demurrer and deposition dispute • Burgerville — the company's response • Cloudflare — decision pending after the August 12 hearing (Issue No. 2) • ATP — implementation of the July 30 recognition order, and the funding dispute set for hearing August 25 (No. 25-12177-LSS; Issue No. 1).