Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Sheldon v. Pinto Technology Ventures, L.P.

Supreme Court of Delaware

October 4, 2019

Jeffery J. SHELDON and Andras Konya, M.D., Ph.D., Plaintiffs-Below, Appellants,
v.
PINTO TECHNOLOGY VENTURES, L.P., Pinto TV Annex Fund, L.P., PTV Sciences II, L.P., Rivervest Venture Fund I, L.P., Rivervest Venture Fund II, L.P., Rivervest Venture Fund II (Ohio), L.P., Bay City Capital Fund IV, L.P., Bay City Capital Fund IV Co-Investment Fund, L.P., Reese Terry and Craig Walker, M.D., Defendants-Below, Appellees.

         Submitted: September 11, 2019

Page 246

[Copyrighted Material Omitted]

Page 247

          Court Below: Court of Chancery of the State of Delaware, C.A. No. 2017-0838-MTZ

         Upon appeal from the Court of Chancery of the State of Delaware: AFFIRMED

         Thad J. Bracegirdle, Esquire (argued), Scott B. Czerwonka, Esquire, Wilks, Lukoff & Bracegirdle, LLC, Wilmington, Delaware, for Appellants Jeffery J. Sheldon and Andras Konya, M.D., Ph.D.

         Bruce E. Jameson, Esquire (argued), Samuel L. Closic, Esquire, Prickett, Jones & Elliott, P.A., Wilmington, Delaware. Of Counsel: B. Russell Horton, Esquire, Gary L. Lewis, Esquire, George Brothers Kincaid & Horton LLP, Austin, Texas, for Appellees Pinto Technology Ventures, L.P., Pinto TV Annex Fund, L.P., PTV Sciences II, L.P., Rivervest Venture Fund I, L.P., Rivervest Venture Fund II, L.P., Rivervest Venture Fund II (Ohio), L.P., Bay City Capital Fund IV, L.P., and Bay City Capital Fund IV Co-Investment Fund, L.P.

         Brian C. Ralston, Esquire, Jacqueline A. Rogers, Esquire, Potter Anderson Corroon LLP, Wilmington, Delaware. Of Counsel: Danny David, Esquire (argued), Rebeca Huddle, Esquire, Baker Botts L.L.P., Houston, Texas, for Appellees Resse Terry and Craig Walker, M.D.

         Before VALIHURA, SEITZ, and TRAYNOR, Justices.

          OPINION

         VALIHURA, Justice:

         Appellants Jeffrey J. Sheldon and Andras Konya, M.D., Ph.D., alleged in the Court of Chancery that several venture capital firms and certain directors of IDEV Technologies, Inc. ("IDEV") violated their fiduciary duties by diluting the Appellants’ economic and voting interests in IDEV. The Appellants argued that their dilution claims are both derivative and direct under Gentile v. Rosette [1] because the venture capital firms constituted a "control group." The Court of Chancery rejected that argument and held that the Appellants’ dilution claims were solely derivative.[2] Because the Appellants did not make a demand on the IDEV board or plead demand futility, and because the Appellants lost standing to pursue a derivative suit after Abbott Laboratories purchased IDEV and acquired the Appellants’ shares, the court dismissed their complaint. On appeal, the Appellants raise a single issue: They contend only that, contrary to the Court of Chancery’s holding, they adequately pleaded that a control group existed, rendering their claims partially "direct" under Gentile . Therefore, according to the Appellants, their complaint should not have been dismissed. We agree with the Court of Chancery’s determination that the Appellants failed to adequately allege that the venture capital firms functioned as a control group. Accordingly, we affirm the dismissal of the complaint with prejudice.

          I. Background

          IDEV, a Delaware corporation based in Texas, develops and manufactures devices used in interventional radiology, vascular surgery, and interventional cardiology. Sheldon founded IDEV in 1999 and served

Page 248

as its Chief Executive Officer from its founding until 2008. Konya invented certain devices licensed by IDEV and served as a consultant to IDEV between 2000 and late 2012.

         Between 2004 and 2008, IDEV completed three rounds of financing through which three venture capital firms (the "Venture Capital Firms")[3] acquired a substantial proportion of IDEV’s outstanding shares. In 2009, IDEV went through a management change, restructured its sales force, and implemented a new strategic plan focused on leveraging and developing its core technologies. It ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.