IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
CAERUS GROUP, LLC, ) ) Plaintiff/Counterclaim ) Defendant, ) ) v. ) Consolidated ) C.A. No. 2025-0393-BWD CHEMICAR EUROPE NV, EMM ) INTERNATIONAL BV, PIET GREEVE, ) DIRK VAN DRIESSCHE, CARL ) GARCIA, and THOMAS VAN DER ) KOOIJ, ) ) Defendants/Counterclaim ) Plaintiffs, ) ) and ) ) FINIXA USA, INC., ) ) Nominal Defendant. )
MEMORANDUM OPINION GRANTING MOTIONS TO DISMISS
Date Submitted: February 11, 2026 Date Decided: March 10, 2026
Thad J. Bracegirdle and Justin C. Barrett, BAYARD, P.A., Wilmington, DE; Attorneys for Plaintiff/Counterclaim Defendant Caerus Group, LLC and Defendant Mitch Penney.
David E. Wilks and D. Charles Vavala, III, WILKS LAW LLC, Wilmington, DE; OF COUNSEL: Jeffrey S. Boxer and Yining Bei, CARTER LEDYARD & MILBURN LLP, New York, NY; Attorneys for Defendants/Counterclaim Plaintiffs Chemicar Europe NV, EMM International BV, Piet Greeve, Dirk van Driessche, Carl Garcia, and Thomas van der Kooij.
DAVID, V.C. Caerus Group, LLC (“Caerus”) and Chemicar Europe, NV (“Chemicar”) are
investors in a joint venture, Finixa USA, Inc. (“Finixa USA” or the “Company”),
formed to distribute Chemicar-manufactured automotive refinishing products in the
United States. Caerus initiated this action, alleging, among other claims, that
Chemicar breached numerous provisions in a shareholders agreement governing the
parties’ relationship. Chemicar responded with a second lawsuit (now consolidated
with this one) against Caerus’ principal and Finixa USA’s Chief Executive Officer,
Mitch Penney, alleging claims for breach of fiduciary duty and breach of contract.
Chemicar also filed counterclaims against Caerus in this action, alleging claims for
breach of the shareholders agreement and aiding and abetting breach of fiduciary
duty. Caerus and Penney have moved for partial dismissal of Chemicar’s claims and
counterclaims. Those motions are granted.
I. BACKGROUND1 A. Chemicar And Caerus Form Finixa USA In A Joint Venture.
Chemicar is a Belgian corporation that manufactures automotive refinishing
products. Compl. ¶ 7. Caerus is a Texas limited liability company. Countercls. ¶ 8;
Compl. ¶ 10.
1 The following facts are taken from Chemicar’s Counterclaims filed in C.A. No. 2025- 0393-BWD (the “Counterclaims”), Chemicar’s Verified Complaint filed in C.A. No. 2025-
1 In April 2021, Chemicar and Caerus formed Finixa USA, a Delaware
corporation, as a joint venture to import and distribute Chemicar-manufactured
products in the United States. Countercls. ¶¶ 14, 16; Compl. ¶ 8. Chemicar owns
3,000 shares of Finixa USA, representing 60%, and Caerus owns 2,000 shares,
representing 40%, of the Company’s equity. Countercls. ¶ 14; Compl. ¶ 15. Mitch
Penney, the sole or majority member of Caerus, serves both as a director on Finixa
USA’s board of directors (the “Board”) and as its Chief Executive Officer (“CEO”).
Compl. ¶ 9.
B. Chemicar, Caerus, and Finixa USA Enter Into A Shareholders Agreement.
In connection with the parties’ joint venture, Caerus, Chemicar, and Finixa
USA entered into a Shareholders Agreement by and among Finixa USA, Inc. and
the Shareholders of Finixa USA, Inc., dated as of April 27, 2021 (the “Shareholders
Agreement”).2 Countercls. ¶ 15; Compl. ¶ 16; Compl., Ex. A [hereinafter Agt.].
0821-BWD (the “Complaint”), and the documents incorporated by reference therein. Defs.’ Answer to Pl.’s Verified Compl. and Countercls. [hereinafter Countercls.], C.A. No. 2025-0393-BWD Dkt. 7; Verified Compl. [hereinafter Compl.], C.A. No. 2025-0821- BWD Dkt. 1; see Allen v. Encore Energy P’rs, 72 A.3d 93, 96 n.2 (Del. 2013) (“A judge may consider documents outside of the pleadings only when: (1) the document is integral to a plaintiff’s claim and incorporated in the complaint . . . .” (citing Vanderbilt Income & Growth Assocs., L.L.C. v. Arvida/JMB Managers, Inc., 691 A.2d 609, 613 (Del. 1996))). 2 Section 17 states that the Shareholders Agreement “shall be governed by and construed in accordance with the internal laws of the State of Delaware” and that “[t]he parties . . . submit to the exclusive jurisdiction of the courts of the United States located in the State of Delaware.” Agt. § 17.
2 Section 4(A) of the Shareholders Agreement addresses the size and
composition of the Board. Agt. § 4(A). Section 4(A)(1) sets the size of the Board
at four directors, with two directors to be nominated by Chemicar and two directors
to be nominated by Caerus. Id. § 4(A)(1); Compl. ¶ 17. Upon formation of the
Company, Chemicar nominated Piet Greeve and Dirk van Driessche to the Board,
and Caerus nominated Penney and Long Hoang, Penney’s brother-in-law. Agt.
§ 4(A)(1); Compl. ¶¶ 11, 17.
Section 4(C)(1)(a) of the Shareholders Agreement “require[s] the approval of
the majority of the Board” to “approv[e] any contract . . . that imposes a financial or
other obligation on the part of the Company in excess of $10,000.” Agt.
§ 4(C)(1)(a). Section 4(C)(2) “require[s] the approval of the majority of the Board
consisting of at least one (1) Chemicar Director and one (1) Caerus Director” to,
among other actions, “mak[e] overall policy decisions with respect to the business
and affairs of the Company” or “enter[] into or amend[] any contracts, arrangements
or agreements with any Affiliates of any Shareholder.” Id. §§ 4(C)(2)(b), (o).
Sections 4 and 11 of the Shareholders Agreement grant the parties information
rights. Section 4(B)(5) states that “[t]he Shareholders shall cause the Board to
require and demand that the Chief Executive Officer provides the Board with
detailed monthly reports regarding the operations of the Company within two
(2) weeks of the end of the preceding month.” Id. § 4(B)(5). In addition, Section 11
3 provides that “[e]ach Shareholder shall be entitled to full and complete information
with respect to the operation of the Company and all of its books and records
including, but not limited to, regular online access to [the Company’s customer
relationship management, or ‘CRM,’ database], accounting, finance and reporting
materials.” Id. § 11.
C. Penney’s Employment Agreement In connection with the parties’ joint venture, Penney entered into an
agreement with Finixa USA to govern his employment as the Company’s CEO (the
“Employment Agreement”). Compl. ¶ 19; Verified Compl., Ex. B [hereinafter
Empl. Agt.], C.A. No. 2025-0393-BWD Dkt. 1.
Section 2.1 of the Employment Agreement states that Penney “shall have the
duties, responsibilities, and authorities normally associated with such position and
such other positions and other duties and responsibilities as are assigned by the
Board from time to time, including, without limitation, the roles and responsibilities
listed on Appendix A attached to this Agreement.” Empl. Agt. § 2.1. Appendix A
includes a bulleted list of twelve “Roles and Responsibilities,” such as “[p]rovid[ing]
detailed monthly reports regarding the operations of the Company to the Board” and
“keep[ing] CRM organized and grant[ing] access to the Board and the Company’s
shareholders.” Compl. ¶¶ 31, 34; Empl. Agt., App. A.
4 D. Chemicar’s Allegations
As alleged in the Complaint and the Counterclaims, since the formation of the
parties’ joint venture, Finixa USA has “underperform[ed]” due to Penney’s “gross
mismanagement, bad faith, and improper actions.” Compl. ¶ 28. Chemicar alleges
that Penney improperly “focused on selling Finixa products to a single buying group
with a limited customer base of only 20 customers located in a relatively limited
geographical base” while “ignor[ing] the thousands of other outlets and distributors
in the automotive aftermarket sector.” Id. ¶ 29. It also alleges that Penney traveled
“to Hawaii purportedly in connection with this buying group.” Id.
Additionally, according to Chemicar, Caerus and Penney have not provided
Chemicar with access to Finixa USA’s books and records. Countercls. ¶ 25.
Chemicar alleges that Penney has “failed to respond to simple information requests”
“[d]espite repeated requests by Chemicar-appointed Board members,” but does not
allege with any specificity who made the requests, when the requests were made,
what information was requested, or how, if at all, Penney responded. Compl. ¶ 32.
Similarly, Chemicar alleges that “Penney has provided few, if any, [monthly]
reports” since February 2025, but other than a general allegation that “Chemicar-
appointed Board members” have made “repeated requests,” Chemicar does not
identify any specific requests, who made them, when, or how Penney responded.
Countercls. ¶ 23; Compl. ¶ 32.
5 Further, Chemicar alleges that Finixa USA has “routinely fail[ed] to pay
Chemicar’s invoices within the required payment period” for products that the
Company purchased from Chemicar. Countercls. ¶¶ 32–34. According to
Chemicar, Finixa USA has “prioritized” payments to UYL Color Supply, Inc.
(“UYL”), “a supplier in which Penney, Hoang, or their family members had a
financial interest.” Compl. ¶ 46. Chemicar alleges that Caerus “acquiesced and
participated in a policy” of “prioritizing payments” to UYL over Chemicar,
Countercls. ¶ 5, but does not allege that Finixa USA has or had insufficient funds to
pay all of its vendors, such that it had to “prioritize” payment of some debts over
others.3
In addition, Chemicar alleges that Finixa USA has overpaid UYL “for
insurance and utilities” as well as “undelivered or unwarranted services or
expenses,” id. ¶ 45, but otherwise alleges nothing about the nature of the goods or
services UYL provided, such as the value of or the amounts paid for such goods or
services.
Finally, Chemicar alleges that after UYL was acquired by National Coatings
& Supplies, Inc. (“NCS”) in January 2024, Finixa USA entered into an amended
3 Chemicar alleges that Finixa USA has failed to meet certain financial targets under the Shareholders Agreement, Countercls. ¶¶ 16–22, but alleges nothing about the Company’s ability to pay its debts.
6 services agreement with NCS without Board approval. Countercls. ¶¶ 47–48.
Chemicar alleges that Penney has “caused Finixa USA not to require NCS to abide
by its obligations” or “enforce its rights” under that agreement but provides no
additional detail about what obligations have been breached or what rights should
be enforced. Compl. ¶ 59.
E. Procedural History On April 11, 2025, Caerus initiated an action in this Court through the filing
of a Verified Complaint (the “Caerus Complaint”), naming Chemicar, its controller
EMM International BV (“EMM”), Piet Greeve, Dirk van Driessche, Carl Garcia,
and Thomas van der Kooij as defendants, and Finixa USA as the nominal defendant.
Verified Compl., C.A. No. 2025-0393-BWD Dkt. 1. On June 23, Chemicar filed the
Counterclaims, alleging claims against Caerus for breach of the Shareholders
Agreement and aiding and abetting breach of fiduciary duty. Countercls. ¶¶ 64–78.
On July 15, Chemicar initiated a second action through the filing of the
Complaint, alleging claims against Finixa USA for breach of contract and “account
stated,” as well as claims against Penney for breach of fiduciary duty and breach of
the Employment Agreement. Compl. ¶¶ 79–104.
7 Caerus moved to dismiss the Counterclaims and Penney moved to dismiss the
Complaint (the “Motions to Dismiss”).4 The actions were consolidated,5 and the
Court heard oral argument on the Motions to Dismiss on February 11, 2026.
II. ANALYSIS Caerus and Penney have moved to dismiss under Court of Chancery Rule
12(b)(6) for failure to state a claim. When reviewing a motion to dismiss under Rule
12(b)(6), Delaware courts “(1) accept all well pleaded factual allegations as true,
(2) accept even vague allegations as ‘well pleaded’ if they give the opposing party
notice of the claim, [and] (3) draw all reasonable inferences in favor of the non-
4 Caerus moved to dismiss the Counterclaims on July 14. Pl. and Countercl.-Def.’s Mot. to Dismiss, C.A. No. 2025-0393-BWD Dkt. 13. Caerus filed an opening brief in support of its motion to dismiss on August 13. Pl./Countercl. Def.’s Opening Br. in Supp. of its Mot. to Dismiss, C.A. No. 2025-0393-BWD Dkt. 16. Chemicar filed an answering brief in opposition to the motion to dismiss on September 12. Defs./Countercl. Pls.’ Answering Br. in Opp’n to Pl./Countercl. Def. Mot. to Dismiss [hereinafter Countercls. AB], C.A. No. 2025-0393-BWD Dkt. 21. Caerus filed a reply brief in further support of its motion to dismiss on September 29. Pl./Countercl. Def.’s Reply Br. in Further Supp. of its Mot. to Dismiss, C.A. No. 2025-0393-BWD Dkt. 23. Penney moved to dismiss the Complaint on August 6. Def. Mitch Penney’s Mot. to Dismiss, C.A. No. 2025-0821-BWD Dkt. 7. Penney filed an opening brief in support of his motion to dismiss on September 9. Def. Mitch Penney’s Opening Br. in Supp. of His Mot. to Dismiss, C.A. No. 2025-0821-BWD Dkt. 9. Chemicar filed an answering brief in opposition to the motion to dismiss on October 9. Chemicar Europe NV’s Answering Br. in Opp’n to Mitch Penney’s Mot. to Dismiss [hereinafter AB], C.A. No. 2025-0393-BWD Dkt. 25. Penney filed a reply brief in further support of his motion to dismiss on October 23. Def. Mitch Penney’s Reply Br. in Further Supp. of His Mot. to Dismiss, C.A. No. 2025-0393-BWD Dkt. 27. 5 C.A. No. 2025-0393-BWD Dkt. 20.
8 moving party.” Cent. Mortg. Co. v. Morgan Stanley Mortg. Cap. Hldgs. LLC, 27
A.3d 531, 535 (Del. 2011) (citing Savor, Inc. v. FMR Corp., 812 A.2d 894, 896–97
(Del. 2002)). Although the Court must draw reasonable inferences in the plaintiff’s
favor, it is “not required to accept every strained interpretation of [its] allegations.”
Segway Inc. v. Cai, 349 A.3d 628, 632 (Del. Ch. 2023) (quoting In re Gen. Motors
(Hughes) S’holder Litig., 897 A.2d 162, 168 (Del. 2006)).
A. Count III Of The Complaint (Breach Of Fiduciary Duty Against Penney) Is Dismissed. Count III of the Complaint alleges direct and derivative claims for breach of
fiduciary duty against Penney.6 To state a claim for breach of fiduciary duty, a
plaintiff must plead “(1) the existence of a fiduciary duty owed by the defendant to
the plaintiff and (2) a breach of that duty.” Deane v. Maginn, 2022 WL 16557974,
at *13 (Del. Ch. Nov. 1, 2022), aff’d, 338 A.3d 1292 (Del. 2025) (TABLE).
As a director and officer of Finixa USA, a Delaware corporation, Penney owes
fiduciary duties of care and loyalty to the corporation and its stockholders. Gantler
v. Stephens, 965 A.2d 695, 708–09 (Del. 2009). The duty of care requires that “in
making business decisions, directors must consider all material information
reasonably available, [such] that the directors’ process is actionable only if grossly
6 Penney has not moved for dismissal on demand futility grounds, possibly because Section 4 of the Shareholders Agreement requires the approval of at least one Caerus- appointed director to pursue action against Penney. See Compl. ¶¶ 71–78.
9 negligent.” Brehm v. Eisner, 746 A.2d 244, 259 (Del. 2000). “Gross negligence
involves more than simple carelessness. To plead gross negligence, a plaintiff must
allege ‘conduct that constitutes reckless indifference or actions that are without the
bounds of reason.’” In re Baker Hughes Inc. Merger Litig., 2020 WL 6281427,
at *15 (Del. Ch. Oct. 27, 2020) (quoting Morrison v. Berry, 2019 WL 7369431,
at *22 (Del. Ch. Dec. 31, 2019)). “While the inquiry of whether the claims amount
to gross negligence is necessarily fact-specific, the burden to plead gross negligence
is a difficult one.” Id. (quoting Zucker v. Hassell, 2016 WL 7011351, at *7 (Del.
Ch. Nov. 30, 2016)).
The duty of loyalty “guards against self-dealing, conflicted transactions, and
bad faith conduct.” Brola ex rel. Credit Glory Inc. v. Lundgren, 2025 WL 3439671,
at *4 (Del. Ch. Dec. 1, 2025). “Bad faith comprises both ‘[f]iduciary conduct
motivated by an actual intent to do harm’ and ‘intentional dereliction of duty.’” Id.
(alteration in original) (quoting In re Walt Disney Co. Deriv. Litig., 906 A.2d 27, 64,
66 (Del. 2006)). To plead bad faith, a plaintiff must allege “an extreme set of facts
to establish that disinterested directors were intentionally disregarding their duties”
or “that the decision under attack is so far beyond the bounds of reasonable judgment
that it seems essentially inexplicable on any ground other than bad faith.” In re
MeadWestvaco S’holders Litig., 168 A.3d 675, 684 (Del. Ch. 2017) (citations
omitted). This, too, “is a difficult standard to meet.” Id.
10 The Complaint alleges that Penney breached his fiduciary duties in five ways.
First, the Complaint alleges that Penney has attempted to exert “leverage” over
Chemicar by “[w]ithholding detailed month[ly] reports, financial and operational
information from Finixa USA’s Board and from Chemicar.” Compl. ¶¶ 35–36, 97;
see also id. ¶ 32 (“Despite repeated requests . . . Penney failed to provide the required
monthly reports since at least February 2025 . . . .”). A conclusory assertion that
Penney failed to circulate certain reports—with no pled facts identifying a single
instance in which Penney received an information request and refused to comply—
does not support an inference of “reckless indifference” “without the bounds of
reason” necessary to state a claim for breach of the duty of care. Nor is Chemicar’s
invocation of the word “leverage” sufficient to transform an otherwise conclusory
allegation into a viable loyalty claim. “Although Delaware has
a notice pleading standard, that standard does not totally relieve a plaintiff of the
burden to plead facts, not conclusions.” Harbor Finance P’rs v. Huizenga, 751 A.2d
879, 893 (Del. 1999). The Complaint does not contain well pleaded allegations of
fact to support an inference that Penney withheld information to advance his
personal interests or to harm the Company.
Second, the Complaint alleges that Penney breached his fiduciary duties by
“[d]enying members of Finixa USA’s Board and Chemicar access to Finixa USA’s
books and records.” Compl. ¶ 97; see also id. ¶ 4 (alleging Penney “denied Chemicar
11 access to the Company’s books and records”); id. ¶ 35 (“Penney has refused to
provide access to . . . the Company’s books and records . . . .”). This theory, too,
relies on conclusions rather than pled facts, as the Complaint fails to plead a single
instance in which Chemicar requested books and records and Penney caused the
corporation to deny its request. Indeed, the Complaint does not allege if or when
Chemicar ever made a demand for books and records; facts supporting an inference
that any such demand complied with the form and manner requirements of 8 Del. C.
§ 220; or how, if at all, Penney responded to any such demand. A bare allegation
that a fiduciary “refused” to produce books and records, with no other factual
allegations in support, does not state a claim for breach of fiduciary duty.
Third, the Complaint alleges that Penney “engaged in self-dealing conduct
and breached his fiduciary duties by . . . prioritizing payments to UYL . . . while
Chemicar’s invoices went unpaid.” Compl. ¶ 5; see also id. ¶¶ 46, 97 (alleging
Penney prioritized “payments to entities in which he or his family had financial
interests”). At the threshold, Chemicar’s allegation that Penney caused Finixa USA
to “prioritiz[e]” payments among vendors is unsupported by any pled facts
suggesting that Finixa USA has or had insufficient funds to pay all of its vendors,
such that it had to favor payment of some debts over others.
Looking past the conclusory rhetoric about “prioritization,” Chemicar’s
challenge is twofold: Finixa USA failed to pay Chemicar’s invoices, and Penney
12 caused Finixa USA to pay a third party in which Penney had a personal financial
interest. The former allegation states a contract claim against the corporation, not a
claim for breach of fiduciary duty against Penney. The latter supports, at most, an
inference that Penney caused the Company to engage in an interested transaction.
That is insufficient, standing alone, to state a claim for breach of the duty of loyalty.
An interested transaction may warrant more exacting review under the entire fairness
standard, but “[e]ntire fairness is not . . . a free pass to trial.” In re Hennessy Cap.
Acq. Corp. IV S’holder Litig., 318 A.3d 306, 319 (Del. Ch. 2024), aff’d, 337 A.3d
1214 (Del. 2024). “Delaware law is clear that even where . . . entire fairness review
is in play . . . [the] plaintiff must make factual allegations about the transaction in
the complaint that demonstrate the absence of fairness.” Monroe Cty. Empls.’ Ret.
Sys. v. Carlson, 2010 WL 2376890, at *2 (Del. Ch. June 7, 2010). The Complaint
here alleges nothing about the nature of the goods or services UYL provided,
including the value of or amounts paid for such goods or services—it alleges only
that Finixa USA “overpaid” UYL “for insurance and utilities” and “unwarranted
services or expenses.” Countercls. ¶ 45. Such conclusory allegations fail to support
a reasonable inference that Penney caused Finixa USA to engage in an unfair
transaction in breach of his duty of loyalty.
Relatedly, the Complaint alleges that Penney breached his fiduciary duties by
causing Finixa USA to enter into an amended services agreement with NCS without
13 Board approval and by “caus[ing] Finixa USA not to require NCS to abide by its
obligations” or “enforce its rights” under that agreement. Compl. ¶¶ 59, 97. Again,
the Complaint does not contain any analysis of the agreement at issue (such as facts
supporting the materiality thereof), nor any explanation of what obligations were
breached and what rights were not enforced.
Finally, read charitably, the Complaint could be construed to allege that
Penney breached his duty of care by “focus[ing] on selling Finixa products to a
single buying group with a limited customer base.” Compl. ¶ 29. The Complaint
does nothing more than allege that Penney focused his managerial efforts on a
specific group of customers. While Chemicar may disagree with that business
decision, this does not support an inference of “reckless indifference” “without the
bounds of reason” necessary to state a claim for breach of the duty of care.7
Accordingly, Count III of the Complaint is dismissed.
B. Count IV Of The Complaint (Breach Of Contract Against Penney) Is Dismissed.
Count IV of the Complaint alleges a derivative claim for breach of contract
against Penney. Count IV alleges that Penney breached his Employment Agreement
7 Penney argues that to the extent the Complaint alleges that he breached his duty of care in his capacity as a director of Finixa USA, he is entitled to exculpation from monetary liability under an exculpation provision in the Company’s certificate of incorporation adopted pursuant to 8 Del. C. § 102(b)(7). Because the Complaint fails to state a claim in any event, the Court does not reach this argument.
14 by “failing to provide required reports to the Board” and “preventing the Board and
Chemicar from having access to Finixa USA’s CRM database.” Compl. ¶¶ 101–02.
“Under Delaware law, to recover for breach of contract, a plaintiff must well
plead and then prove ‘a contractual obligation, whether express or implied, a breach
of that obligation by the defendant, and resulting damage to the plaintiff.’” Erisman
v. Zaitsev, 2021 WL 6134034, at *8 (Del. Ch. Dec. 29, 2021) (quoting Moore Bus.
Forms, Inc. v. Cordant Hldgs. Corp., 1995 WL 662685, at *7 (Del. Ch.
Nov. 2, 1995)).
Even assuming Chemicar has adequately alleged that Penney breached a
contractual obligation to provide certain information to the Board, it “ha[s] utterly
failed to plead that [Chemicar or the Company] ha[s] suffered cognizable harm from
any breach, much less what that harm might be.” Erisman, 2021 WL 6134034, at
*11. Chemicar seeks only monetary damages, not equitable relief, yet offers no
theory whatsoever as to how Penney’s purported failure to provide information to
the Board or Chemicar resulted in compensable harm. Instead, citing Garfield ex
rel. ODP Corp. v. Allen, 277 A.3d 296 (Del. Ch. 2022), Chemicar insists that it is
not required to plead any theory of harm because an “unexcused failure to perform
a contract is a legal wrong, and therefore an action will exist even if it causes no
injury.” AB at 14.
15 I do not understand established Delaware precedent to excuse a plaintiff from
pleading facts supporting every element of a claim for breach of contract, including
that a contractual breach caused some harm. Indeed, Garfield acknowledges that
binding Delaware Supreme Court authority requires a plaintiff alleging a claim for
breach of contract to allege “the resultant damage to the plaintiff.” Garfield, 277
A.3d at 328 (quoting VLIW Tech., LLC v. Hewlett-Packard Co., 840 A.2d 606, 612
(Del. 2003)). See, e.g., Erisman, 2021 WL 6134034, at *11 (dismissing claim for
breach of contract where plaintiffs “utterly failed to plead that they have suffered
cognizable harm from any breach, much less what that harm might be”); UtiliSave,
LLC v. Miele, 2015 WL 5458960, at *10 (Del. Ch. Sep. 17, 2015) (sustaining a claim
for specific performance of a contractual confidentiality obligation, but dismissing
a claim for “compensatory damages” arising from a breach of the same obligation
because the plaintiff failed “to plead facts supporting a reasonable inference that [the
defendant’s] breach caused the [plaintiff] economic harm”); Kuroda v. SPJS Hldgs.,
971 A.2d 872, 883 (Del. Ch. 2009) (dismissing a claim for breach of contract where
the plaintiff “failed to properly allege the essential element of damages”); Great
Lakes Chem. Corp. v. Pharmacia Corp., 788 A.2d 544, 549 (Del. Ch. 2001)
(dismissing a claim for breach of contract because the plaintiff did “not sufficiently
ple[a]d that it suffered a cognizable injury resulting from the breach” and “[a]n
essential element of any claim for breach of contract is cognizable injury”); see also
16 Wellgistics, LLC v. Welgo, Inc., 2024 WL 113967, at *4, *6 (Del. Super. Ct. Jan. 9,
2024) (dismissing claim for breach of contract for “fail[ing] to meet Delaware’s
minimal notice pleading” requirement to allege cognizable harm, explaining that
“[c]onclusory allegations of damages are insufficient”); Light Years Ahead, Inc. v.
Valve Acq., LLC, 2021 WL 6068215, at *6 (Del. Super. Ct. Dec. 22, 2021)
(dismissing claim for breach of contract where the plaintiff “fail[ed] to sufficiently
plead resultant damages”).
It is true that a party seeking equitable relief need not allege quantifiable harm.
See Garfield, 277 A.3d at 328 (“[E]ven if it is not clear that the non-breaching party
has ‘suffer[ed] immediate quantifiable harm, the equitable powers of this Court
afford [it] broad discretion in fashioning appropriate relief.’” (quoting Universal
Studios Inc. v. Viacom Inc., 705 A.2d 579, 583 (Del. Ch. 1997))); Universal Studios
Inc., 705 A.2d at 583 (explaining that “when the parties’ agreements have been
breached but neither the innocent party nor the venture suffers immediate
quantifiable harm,” the Court can still award equitable relief). And it is also true
that after trial, nominal damages may be awarded to a plaintiff who failed to prove
a loss or where recovery for a loss is precluded because damages were not proven
with reasonable certainty. See Restatement (Second) of Contracts § 346(b). But the
possibility of a post-trial nominal award for an empty victory does not excuse a
17 plaintiff seeking only money damages from alleging some theory of compensable
loss at the pleadings stage.
Here, Chemicar does not seek equitable relief (or even a declaratory
judgment), and the Complaint makes no attempt whatsoever to plead any theory of
compensable harm. As a result, Count IV must be dismissed.
C. Count I Of The Counterclaims (Breach Of Contract Against Caerus) Is Dismissed. Count I of the Counterclaims alleges a claim for breach of contract against
Caerus. Specifically, Count I alleges that Caerus breached Sections 4(B)(5), 11, and
4(C)(2)(b) of the Shareholders Agreement. Countercls. ¶ 68.
“‘[Because] [t]he construction of a contract is a question of law,’ it is well
understood that ‘a motion to dismiss is a proper framework for determining the
meaning of contract language.’” Erisman, 2021 WL 6134034, at *8 (alterations in
original) (citations omitted). “Accordingly, when assessing whether the contract
claims survive [a pleadings-stage motion], it is appropriate to begin with a
construction of the contracts alleged to have been breached by employing well-worn
canons of contract construction.” Id. at *8. Each of Chemicar’s theories of breach
here fails on the plain language of the contract and the insufficiency of the factual
allegations pled in the Counterclaims.
18 First, the Counterclaims allege that Caerus failed “to cause [Penney] to
provide detailed monthly reports to the Board as required under Section 4(B)(5)” of
the Shareholders Agreement. Countercls. ¶ 68(a). Section 4(B)(5) states:
The Shareholders shall cause the Board to require and demand that the Chief Executive Officer provides the Board with detailed monthly reports regarding the operations of the Company within two (2) weeks of the end of the preceding month.
Agt. § 4(B)(5) (emphasis added). By its plain language, Section 4(B)(5) imposes a
joint obligation on the “Shareholders”—in other words, both Caerus and
Chemicar—to cause the Board to “require and demand” that Penney provide the
referenced reports. The Counterclaims do not allege that Caerus failed to cause the
Board to act; they allege that “Penney has provided few, if any, such reports” and
“Caerus has failed to demand or cause Penney to provide the required reports.”
Countercls. ¶ 23. Moreover, the Counterclaims plead no facts from which the Court
can infer that Caerus, rather than Chemicar, caused any such failure—again, Caerus
and Chemicar are entitled to equal Board representation under the Shareholders
Agreement. Therefore, the Counterclaims fail to state a claim for breach of Section
4(B)(5).
Second, the Counterclaims allege that Caerus has withheld “full access to
[Finixa USA’s] books and records in violation of Section 11” of the Shareholders
Agreement. Section 11 states:
19 Each Shareholder shall be entitled to full and complete information with respect to the operation of the Company and all of its books and records including, but not limited to, regular online access to CRM, accounting, finance and reporting materials.
Agt. § 11 (emphasis added). While the plain language of Section 11 grants “[e]ach
Shareholder” (i.e., Caerus and Chemicar) a right to access the Company’s books and
records, it does not impose an obligation on either Caerus or Chemicar to provide
such access. This is unsurprising because the Company, through its directors and
officers, controls the books and records; the stockholders do not.8
Third, the Counterclaims allege that Caerus breached Section 4(C)(2)(b),
which states:
The following actions shall require the approval of the majority of the Board consisting of at least one (1) Chemicar Director and one (1) Caerus Director: . . .
b. making overall policy decisions with respect to the business and affairs of [Finixa USA][.]
Agt. § 4(C)(2)(b). Chemicar alleges that Caerus breached this provision by causing
or directing Finixa USA to make a “policy decision” to prioritize payment to other
8 Chemicar argues that the Court should infer an obligation on Caerus to produce books and records in Section 11 because “[a] contractual right without a corresponding obligation is illusory.” Countercls. AB at 15. If Section 11 can reasonably be read to impose an obligation to produce books and records, it must impose it on Finixa USA, which is also a party to the Shareholders Agreement. Chemicar also argues that it “bargained for § 11 knowing that Caerus would be in control of the information to which Chemicar would have access[,]” id. at 16, but under the Shareholders Agreement, Chemicar and Caerus were entitled to equal representation on the Board.
20 vendors over Chemicar. Countercls. ¶¶ 39, 68(d). Even assuming Section
4(C)(2)(b) imposes an obligation on Caerus, this claim fails because, as explained
above, the Counterclaims do not plead facts supporting an inference that Finixa USA
had insufficient funds to pay all of its vendors, such that it “prioritized” payment of
some debts over others. See pp. 6, 12, supra. Nor do they plead facts supporting an
inference that Caerus caused Finixa USA to make a “policy decision.” At most, the
Counterclaims allege that at some unspecified time, Finixa USA failed to pay
Chemicar’s invoices but did pay UYL’s. Those allegations do not support an
inference that Finixa USA adopted a “policy” or that Caerus played any role in
doing so.
Fourth, the Counterclaims allege that Caerus “caus[ed] or permit[ed] Finixa
USA to enter into agreements . . . with UYL and NCS[] without required approval
by the Finixa USA board,” Countercls. ¶ 68(e), but fail to identify which provision
of the Shareholders Agreement was purportedly breached. It is possible that the
Counterclaims intend to allege a breach of Section 4(C)(2)(o), which requires Board
approval before “entering into or amending any contracts, arrangements or
agreements with any Affiliates of any Shareholder.” Agt. § 4(C)(2)(o). The
Counterclaims identify two agreements between Finixa USA and Caerus—an initial
Services Agreement dated April 21, 2021, and an Amended and Restated Services
Agreement dated some time after January 16, 2024. Countercls. ¶¶ 42–44, 47–48,
21 68(e). The first Services Agreement could not have breached the Shareholders
Agreement because the Shareholders Agreement was not signed until April 27,
2021, six days after the Services Agreement. Id. ¶¶ 3, 15. As for the Amended and
Restated Services Agreement, the Counterclaims fail to plead facts supporting an
inference that UYL was an “Affiliate” of Caerus when that agreement was signed.
The Shareholders Agreement defines an “Affiliate” to mean,
with reference to any Person, any other Person of which such Person is a shareholder, member, director, trustee, officer, general partner or employee, or any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such Person.
Agt. § 1(B). The Counterclaims allege that Penney, Hoang, or their family members
owned an unspecified “financial interest” in UYL, Hoang “was an owner and
executive of UYL[,]” and UYL and Caerus shared an address, until NCS acquired
UYL on January 16, 2024. Countercls. ¶¶ 10, 35. The Counterclaims do not allege
any facts supporting an inference that Caerus and UYL were under “common
control” after that date, including at the time the Amended and Restated Services
Agreement was signed.9 As a result, the Counterclaims fail to state a claim for
breach of Section 4(C)(2)(o).
9 To the extent the Counterclaims allege that Caerus and Penney “allowed UYL to breach the services agreement with Finixa USA, including by failing to provide Finixa USA with required insurance coverage,” they fail to allege any facts supporting the conclusion that Caerus or Penney “allowed” a breach. Countercls. ¶ 46.
22 For the reasons explained above, Count I is dismissed.
D. Count II Of The Counterclaims (Aiding and Abetting Breach Of Fiduciary Duty Against Caerus) Is Dismissed.
Count II of the Counterclaims alleges a claim for aiding and abetting breach
of fiduciary duty against Caerus.
To state a claim for aiding and abetting breach of fiduciary duty, a plaintiff
must allege: “(1) the existence of a fiduciary relationship, (2) a breach of the
fiduciary’s duty, . . . (3) knowing participation in that breach by the defendants, and
(4) damages proximately caused by the breach.” In re Mindbody, Inc., S’holder
Litig., 332 A.3d 349, 389 (Del. 2024) (quoting Malpiede v. Townson, 780 A.2d 1075,
1096 (Del. 2001)). “[P]articipation in an aiding and abetting claim requires that the
aider and abettor provide ‘substantial assistance’ to the primary violator.” Id. at 392.
“[F]actors that shed light on whether a secondary actor has substantially assisted the
primary actor in its wrongful conduct” include:
• The nature of the tortious act that the secondary actor participated in or encouraged, including its severity, the clarity of the violation, the extent of the consequences and the secondary actor’s knowledge of these aspects;
• The amount, kind, and duration of assistance given, including how directly involved the secondary actor was in the primary actor’s conduct;
• The nature of the relationship between the secondary and primary actors; and
• The secondary actor’s state of mind.
23 In re Columbia Pipeline Gp., Inc. Merger Litig., 342 A.3d 324, 358 (Del. 2025)
(citing Mindbody, 332 A.3d at 395–96). “[C]ase law in the corporate governance
context has found liability only where there has been overt participation such as
active ‘attempts to create or exploit conflicts of interest in the board’ or an overt
conspiracy or agreement between the buyer and the board . . . .” Mindbody, 332
A.3d at 393 (quoting Malpiede, 780 A.2d at 1097).
As set forth above, Chemicar has failed to state a predicate claim for breach
of fiduciary duty, which disposes of the aiding and abetting claim.
Additionally, the Counterclaims fail to adequately allege “knowing
participation” in a fiduciary breach. The Counterclaims allege that “Caerus
knowingly participated in and substantially assisted Penney’s breaches” of fiduciary
duty by (1) “[a]ssisting Penney’s breaches of the Company’s governance obligations
and failing to direct Penney to comply with the Company’s governance obligations,”
(2) “[a]ssisting Penney’s failure to pay Chemicar invoices and diversion of
Company funds to UYL at Chemicar’s expense and failing to stop Penney from
doing so,” and (3) “[a]ssisting Penney’s refusal to provide Chemicar with access to
the Company’s financial and operational information and failing to direct Penney to
grant Chemicar access to financial and operational information.” Countercls.
¶ 76(a)–(c). A rote allegation that a party has “assist[ed]” in a fiduciary breach does
not come close to pleading “knowing participation.”
24 Chemicar argues that Penney’s knowledge and conduct may be “imputed” to
Caerus for purposes of its aiding and abetting claim. Countercls. AB at 20–21. “To
be sure, knowledge can be imputed from a human to an entity in certain scenarios[,]”
“[b]ut action by the entity must be pled to state a claim against the entity.” Renovaro
Inc. v. Gumrukcu, 2025 WL 3134533, at *11 n.136 (Del. Ch. Nov. 7, 2025); see also
Hennessy Cap., 318 A.3d at 329 (requiring distinct allegations of active participation
by an alleged aider-and-abettor). Here, the only action Caerus is alleged to have
taken is “assist[ance].” Such allegations are far too conclusory to support an
inference of participation.
Because the Counterclaims fail to allege any facts supporting an inference that
Caerus substantially assisted a breach of fiduciary duty, Count II must be dismissed.
E. Chemicar’s Request For Leave To Amend Is Denied.
Chemicar argues that, “[a]t a [m]inimum[,]” “dismissal should be without
prejudice and with leave to amend the Complaint.” AB at 26; Countercls. AB at 24.
Chemicar’s request for leave to amend is denied. Under Court of Chancery
Rule 15(a)(5)(A),
If a party wishes to amend the party’s complaint in response to a motion to dismiss under Rules 12(b)(6) or 23.1, the party must amend the party’s complaint—or seek leave to amend—either:
(i) before the party’s response to the motion is due; or
25 (ii) if the case has been transferred from another court, within 30 days after the transfer, even if the party responded to the motion in the other court.
Ct. Ch. R. 15(a)(5)(a). “If a party neither amends nor moves to amend by the time
set forth in Rule 15(a)(5)(A), a dismissal under Rule 12(b)(6) or 23.1 will be with
prejudice . . . unless the Court for good cause shown dismisses the complaint without
prejudice.” Ct. Ch. R. 15(a)(5)(B).
When Caerus and Penney moved to dismiss, Chemicar elected to stand on its
pleadings and file an answering brief rather than amend. Chemicar has not
demonstrated that good cause exists to depart from Rule 15(a)(5)(A). Chemicar’s
request for leave to amend is therefore denied and dismissal is with prejudice.
III. CONCLUSION
For the reasons explained above, the Motions to Dismiss are granted. Counts
III and IV of the Complaint and Counts I and II of the Counterclaims are dismissed.