ELDON KLAASSEN, Plaintiff and Counterclaim-Defendant Below, Appellant,
ALLEGRO DEVELOPMENT CORPORATION, RAYMOND HOOD, GEORGE PATRICH SIMPKINS, JR. MICHAEL PEHL, and ROBERT FORLENZA, Defendants and Counterclaimants Below, Appellees
Submitted: December 18, 2013.
Court Below: Court of Chancery the State of Delaware. C.A. No. 8626.
R. Judson Scaggs, Jr. (argued), Kevin M. Coen and Frank R. Martin, Esquires, Morris, Nichols, Arsht & Tunnell LLP, Wilmington, Delaware; Of George Parker Young, Anne Johnson and Kelli Larsen Walter, Esquires, Haynes and Boone, LLP, Fort Worth, Texas, for Appellant.
Peter J. Walsh, Jr., Ryan T. Costa, Potter Anderson & Corroon LLP, Wilmington, Delaware; Of Van H. Beckwith (argued), Jonathan R. Mureen, Jordan H. Flournoy, Esquires, Baker Botts L.L.P., Dallas, Texas for Appellees Allegro Development Corporation, Raymond Hood, and George Patrich Simkins, Jr.
Lisa A. Schmidt, Jacob A. Werrett, Adrian D. Boddie, Esquires, Richards, Layton & Finger, P.A., Wilmington, Delaware; Of Robert B. Lovett and Karen Burhans, Esquires, Cooley LLP, Boston, Massachusetts for Appellees Michael Pehl and Robert Forlenza.
Before HOLLAND, BERGER, JACOBS, and RIDGELY, Justices and JOHNSTON, Judge,[*] constituting the Court en Banc.
Plaintiff-below/appellant Eldon Klaassen (" Klaassen" ) appeals from a Court of Chancery judgment in this proceeding brought under 8 Del. C. § 225. The judgment determined that Klaassen is not the de jure chief executive officer (" CEO" ) of Allegro Development Corporation (" Allegro" ). Klaassen claimed that the remaining Allegro directors (collectively, the " Director Defendants" ), in removing him as CEO, violated an equitable notice requirement and also improperly employed deceptive tactics. After a trial and without addressing its merits, the Court of Chancery held that the claim was barred under the equitable doctrines of laches and acquiescence.
We affirm the Court of Chancery judgment. We hold that, to the extent that Klaassen's claim may be cognizable, it is equitable in nature. Therefore, Klaassen's removal as CEO was, at most, voidable and subject to the equitable defenses of laches and acquiescence. We further conclude that the Court of Chancery properly found that Klaassen acquiesced in his removal as CEO, and is therefore barred from challenging that removal.
II. FACTUAL AND PROCEDURAL ...