Issue No. 4 — August 31, 2026

Lead Matter

Musk v. OpenAI — the conversion question, decided on timing for the tried claims (N.D. Cal.)

On May 18, 2026, after a three-week trial, a nine-member advisory jury found Elon Musk's charitable-trust and unjust-enrichment claims against OpenAI and its leaders time-barred; Judge Yvonne Gonzalez Rogers adopted the finding. The ruling did not reach the merits of those claims or end the lawsuit: other claims against OpenAI and Microsoft remained pending, and Musk sought a separately appealable judgment on the tried claims. Musk has publicly characterized the outcome as a “calendar technicality” and stated he will appeal; OpenAI's counsel said the jury reached the right result. Both characterizations are the parties' own. The trial record is an unusually detailed public examination of what constraints attach when capital enters an entity under one governance form and the entity later converts to another — and the limitations finding is a data point for any claimant who waits while a structure evolves.

On The Docket

Ropko v. McNeill — a founder's unilateral board removal, invalidated (Del. Ch., C.A. No. 2024-1193-PAF)

Two of the three members of the managing board of McNeill Investment Group, LLC sued the third — the company's founder and executive chairman — after he executed a written consent purporting to remove them as officers and managers, signing on their behalf under a voting agreement. After trial, Vice Chancellor Fioravanti held (March 16, 2026) that the voting agreement obligated the plaintiffs to vote as the founder did but was not a proxy authorizing him to act for them; because the operating agreement required board action for removal, the removals were invalid. The court rejected a futility excuse for bypassing the prescribed formalities and held the plaintiffs entitled to reasonable fees under the agreement's fee-shifting provision. Under the decision, control follows the operating agreement, not the founder.

Bold St. Peters, L.P. v. Bold on Boulevard LLC — consent provisions read as written (Del. Ch., C.A. No. 2024-0653-MTZ)

In an expedited Section 18-110 post-trial ruling (November 19, 2024), Vice Chancellor Zurn concluded that a private-equity member validly removed the managing member of a real estate LLC, giving effect to the difference between consent rights the operating agreement qualified by a reasonableness standard and those it left in the member's sole discretion — while expressly preserving the implied covenant of good faith and fair dealing, so that an unqualified consent right is not unlimited discretion. The court declined to declare void every action the removed manager took after removal and denied interim fees. With Ropko, it maps the terrain the Burgerville plaintiff (Issue No. 3) has entered: fast, contractarian, and attentive to what the parties wrote.

Ruling In Focus

NEA v. Rich — a covenant not to sue, tested (Del. Ch. 2023)

Venture funds that signed a recapitalization package — preferred converted to common, a drag-along voting agreement, and a covenant not to sue including for fiduciary breach — sued anyway after the sale. The court held the covenant not facially invalid (sophisticated parties may narrow litigation rights by contract further than once assumed) but declined to dismiss: the DGCL permits only limited fiduciary tailoring, and such a covenant could not bar well-pleaded claims of intentional wrongdoing. A motion-to-dismiss decision — it defines what the covenant could and could not foreclose at the pleading stage, and made no finding that wrongdoing occurred.

Doctrine Watch

Control without a majority

A question running through this month's issues: when does an investor holding less than a majority bear controller-level duties as to a specific transaction? The reference point is the Basho litigation (Del. Ch. 2018), where the court, after trial, found on the facts before it that a minority preferred investor had used contractual blocking rights to channel a distressed company into an investor-favorable financing — and treated the investor as a controller as to that transaction, with liability following. The framework is fact-specific: rights alone do not make a controller; rights wielded to dominate a particular decision can. The echoes are visible in Guilbeau and Lukka (Issues Nos. 1–2). For matters covered by Delaware's 2025 amendments (Issue No. 3), Section 144(e)(2) supplies a separate definition for that section, with specified voting, board-appointment, or voting-plus-managerial-authority thresholds.

Also Tracking

Musk v. OpenAI — the request for a separately appealable judgment on the tried claims, and the remaining claims • Burgerville — the company's response (Issue No. 3) • TSVC — discovery (Issue No. 3) • Cloudflare — decision pending after the August 12 hearing (Issue No. 2) • ATP — implementation of the July 30 recognition order and the August 27 final funding order (No. 25-12177-LSS; Issue No. 1).