Stradling Secures Victory in Delaware Court of Chancery

Stradling secured a complete defense victory for Keypoint Intelligence, LLC, a portfolio company of a California-based private equity firm.  Keypoint’s former CEO as a profits interest holder commenced an action under Section 18-305 of the Delaware Limited Liability Company Act in the Court of Chancery, seeking an inspection of company records, for among other purposes, an investigation into purported self-interested transactions, and indemnity. The Court dismissed the indemnity claim based upon Stradling’s motion. After trial, the Court issued a final decision, concluding that the former CEO lacked standing because his profits interest was not a membership interest and he was not admitted as a member under applicable law and the company’s limited liability company agreement. The action is currently under exceptions review in the Court of Chancery. Steve Ram led the Stradling team with assistance from Morgan Williams.