COURT OF CHANCERY OF THE STATE OF DELAWARE SELENA E. MOLINA LEONARD L. WILLIAMS JUSTICE CENTER MAGISTRATE IN CHANCERY 500 NORTH KING STREET, SUITE 11400 WILMINGTON, DE 19801-3734
October 11, 2024
Bruce E. Jameson, Esquire Eric A. Veres, Esquire J. Clayton Athey, Esquire S. Michael Blochberger, Esquire John G. Day, Esquire Abrams & Bayliss LLP Christine N. Chappelear, Esquire 20 Montchanin Road, Suite 200 Prickett, Jones & Elliott, P.A. Wilmington, Delaware 1980 1310 North King Street Wilmington, Delaware 19801
Mary S. Thomas, Esquire Thomas Law LLC 1521 Concord Pike Suite 301 Wilmington, DE 19803
Re: Kuramo Capital Management, LLC et. al. v. Nile Capital Management, LLC et. al., C.A. No. 2024-0637-SEM
Dear Counsel:
Through this letter, I aim to resolve all pending issues in this action. This is a
final report and any exceptions to the rulings herein may be filed under Court of
Chancery Rule 144(d)(2). Absent timely exceptions, the parties shall file a proposed
implementing order within five business days of this letter.
Interested readers are directed to the docket and my September 24, 2024 post-
trial oral ruling for a more detailed background. For purposes of this letter, I provide
the following: this is an expedited books-and-records proceeding, through which C.A. No. 2024-0637-SEM October 11, 2024 Page 2 of 6
Kuramo Capital Management, LLC; Kuramo Africa Opportunity Master Fund II,
LP; and Kuramo Africa Opportunity Agribusiness Vehicle, LP (the “Plaintiffs”)
seek inspection of the books and records of Nile Capital Management, LLC; Nile
Global Frontier Fund, LLC; and KN Agri, LLC (the “Defendants,” and together with
the Plaintiffs, the “Parties”). I presided over trial on a paper record on September 12,
2024, and issued my post-trial ruling telephonically on September 24, 2024. Therein,
I found largely in the Plaintiffs’ favor; recommending that the Defendants be
required to produce records in response to what I defined therein as “Request 2,
subject to the existing confidentiality agreement[.]”1 I rejected, however, the
Plaintiffs’ request to shift fees under the bad faith exception to the American Rule.
After my ruling, the Plaintiffs inquired about whether I would be “specifically
addressing the parties’ arguments concerning attorney retainer agreements and
litigation funding arrangements[.]”2 I responded that it was my understanding the
Plaintiffs proceeded to trial solely on Request 2, but I invited the Parties to submit
written submissions to address any loose ends.
On September 26, 2024, the Plaintiffs submitted a letter explaining their belief
that “two issues remain outstanding: whether Plaintiffs are entitled to documents or
1 Docket Item (“D.I.”) 40 at 21:20–21. 2 Id. at 22:16–18. C.A. No. 2024-0637-SEM October 11, 2024 Page 3 of 6
information concerning Defendants’ (i) arrangements with litigation funders, and (ii)
retainer agreements with their counsel.” 3 The Defendants responded in opposition
on September 27, 2024, asking me to reject the Plaintiffs’ request, which they
pitched as a “belated attempt to expand the scope of their written demand through
litigation.” 4 The Plaintiffs had the last word, on September 30, 2024, advocating
through letter that they did not abandon these issues and seek production. 5
The Plaintiffs are not entitled to documents or information concerning the
Defendants’ (i) arrangements with litigation funders, and (ii) retainer agreements
with their counsel.
First, I remain concerned that the Plaintiffs abandoned these requests in
connection with trial. In the pretrial stipulation, the Plaintiffs included these requests
in the issues of law and fact that remain to be litigated.6 But, at trial, the Plaintiffs
3 D.I. 36 at 1. 4 D.I. 37 at 1. 5 D.I. 38. The Parties further confirmed, by letter on October 1, 2024, that they understood the exceptions deadline for my post-trial ruling had passed and, thereunder, an implementing order was due by October 1, 2024. D.I. 39 at 1. The Parties proposed, and I agree, that it was premature to submit the proposed order and offered to do so within five business days of my ruling on the remaining issues. Id. I welcome that proposal. 6 D.I. 28, § III(A)(30) (“(f) copies of all engagement letters between any defendant, their affiliates or Seruma on one hand, and the respective law firms who represented them on the other; and (g) documents and information concerning litigation funding arrangements entered into between any defendant, their affiliates or Seruma on one hand, and any individual or organization on the other, which Defendants have not produced.”). C.A. No. 2024-0637-SEM October 11, 2024 Page 4 of 6
walked me through their demand, which contains five requests, explaining: (1)
Request 1, which sought either audited or unaudited financial statements, was no
longer in dispute based on the Defendants’ representation that no such documents
existed for inspection or production, 7 (2) Request 2 was “really at the end of the day
why” we were at trial; 8 (3) Request 3 had been addressed sufficiently in the
Defendants’ productions; 9 (4) Request 4, like Request 1, was resolved based on the
Defendants’ representation that no such documents exist; 10 and (5) Request 5 was
answered sufficiently with Request 3. 11
Later in their presentation, the Plaintiffs touched on the litigation funding and
counsel arrangements. They were termed as “smaller[,]” “fairly ancillary issues,”
which were “follow-ups to information that was provided in the context of this
proceeding.” 12 The Plaintiffs explained that the existence of such arrangements was
disclosed in a June 14, 2024 letter (after this action was filed) and on July 18, the
7 D.I. 34 at 12:5–13 (“[I]f the documents don’t exist, then that’s it.”). 8 Id. at 13:8–13. 9 Id. at 12:22–13 (“It took defendants a couple months to get them to us, but we do have them. That’s fine”). 10 Id. at 12:14–21 (“[I]f the document doesn’t exist, then for purposes of today, we’re done.”). 11 Id. at 12:22–13: (“It took defendants a couple months to get them to us, but we do have them. That’s fine”). 12 Id. at 35:5–13. C.A. No. 2024-0637-SEM October 11, 2024 Page 5 of 6
Defendants promised to provide information by July 23; per the Plaintiffs, to date,
the Defendants have failed to provide any further information or documentation. 13
In the Plaintiffs’ presentation at trial, counsel focused on the Defendants’
objections to production (confidentiality and privilege). The Plaintiffs failed,
however, to make any showing as to the basis for a court-ordered production (e.g.,
that the requested documents were within the remaining scope of the demand and
necessary and essential to the Plaintiffs’ proper purposes for inspection). Thus, it is
not clear in my mind that these issues were adequately preserved for a post-trial
ruling.14
But, secondly, and most importantly, these requests fail on their merits. Even
if preserved, the Plaintiffs have failed to demonstrate that arrangements with
litigation funders and retainer agreements are within the scope of necessary and
essential records responsive to Request 2.15 “As a general rule, . . . inspection rights
are limited by the scope of the demand letter, and a . . . plaintiff will be foreclosed
13 Id. at 35:8–36:11. 14 Cf. In re Est. of DeGroat, 2020 WL 2088992, at *26 (Del. Ch. Apr.
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COURT OF CHANCERY OF THE STATE OF DELAWARE SELENA E. MOLINA LEONARD L. WILLIAMS JUSTICE CENTER MAGISTRATE IN CHANCERY 500 NORTH KING STREET, SUITE 11400 WILMINGTON, DE 19801-3734
October 11, 2024
Bruce E. Jameson, Esquire Eric A. Veres, Esquire J. Clayton Athey, Esquire S. Michael Blochberger, Esquire John G. Day, Esquire Abrams & Bayliss LLP Christine N. Chappelear, Esquire 20 Montchanin Road, Suite 200 Prickett, Jones & Elliott, P.A. Wilmington, Delaware 1980 1310 North King Street Wilmington, Delaware 19801
Mary S. Thomas, Esquire Thomas Law LLC 1521 Concord Pike Suite 301 Wilmington, DE 19803
Re: Kuramo Capital Management, LLC et. al. v. Nile Capital Management, LLC et. al., C.A. No. 2024-0637-SEM
Dear Counsel:
Through this letter, I aim to resolve all pending issues in this action. This is a
final report and any exceptions to the rulings herein may be filed under Court of
Chancery Rule 144(d)(2). Absent timely exceptions, the parties shall file a proposed
implementing order within five business days of this letter.
Interested readers are directed to the docket and my September 24, 2024 post-
trial oral ruling for a more detailed background. For purposes of this letter, I provide
the following: this is an expedited books-and-records proceeding, through which C.A. No. 2024-0637-SEM October 11, 2024 Page 2 of 6
Kuramo Capital Management, LLC; Kuramo Africa Opportunity Master Fund II,
LP; and Kuramo Africa Opportunity Agribusiness Vehicle, LP (the “Plaintiffs”)
seek inspection of the books and records of Nile Capital Management, LLC; Nile
Global Frontier Fund, LLC; and KN Agri, LLC (the “Defendants,” and together with
the Plaintiffs, the “Parties”). I presided over trial on a paper record on September 12,
2024, and issued my post-trial ruling telephonically on September 24, 2024. Therein,
I found largely in the Plaintiffs’ favor; recommending that the Defendants be
required to produce records in response to what I defined therein as “Request 2,
subject to the existing confidentiality agreement[.]”1 I rejected, however, the
Plaintiffs’ request to shift fees under the bad faith exception to the American Rule.
After my ruling, the Plaintiffs inquired about whether I would be “specifically
addressing the parties’ arguments concerning attorney retainer agreements and
litigation funding arrangements[.]”2 I responded that it was my understanding the
Plaintiffs proceeded to trial solely on Request 2, but I invited the Parties to submit
written submissions to address any loose ends.
On September 26, 2024, the Plaintiffs submitted a letter explaining their belief
that “two issues remain outstanding: whether Plaintiffs are entitled to documents or
1 Docket Item (“D.I.”) 40 at 21:20–21. 2 Id. at 22:16–18. C.A. No. 2024-0637-SEM October 11, 2024 Page 3 of 6
information concerning Defendants’ (i) arrangements with litigation funders, and (ii)
retainer agreements with their counsel.” 3 The Defendants responded in opposition
on September 27, 2024, asking me to reject the Plaintiffs’ request, which they
pitched as a “belated attempt to expand the scope of their written demand through
litigation.” 4 The Plaintiffs had the last word, on September 30, 2024, advocating
through letter that they did not abandon these issues and seek production. 5
The Plaintiffs are not entitled to documents or information concerning the
Defendants’ (i) arrangements with litigation funders, and (ii) retainer agreements
with their counsel.
First, I remain concerned that the Plaintiffs abandoned these requests in
connection with trial. In the pretrial stipulation, the Plaintiffs included these requests
in the issues of law and fact that remain to be litigated.6 But, at trial, the Plaintiffs
3 D.I. 36 at 1. 4 D.I. 37 at 1. 5 D.I. 38. The Parties further confirmed, by letter on October 1, 2024, that they understood the exceptions deadline for my post-trial ruling had passed and, thereunder, an implementing order was due by October 1, 2024. D.I. 39 at 1. The Parties proposed, and I agree, that it was premature to submit the proposed order and offered to do so within five business days of my ruling on the remaining issues. Id. I welcome that proposal. 6 D.I. 28, § III(A)(30) (“(f) copies of all engagement letters between any defendant, their affiliates or Seruma on one hand, and the respective law firms who represented them on the other; and (g) documents and information concerning litigation funding arrangements entered into between any defendant, their affiliates or Seruma on one hand, and any individual or organization on the other, which Defendants have not produced.”). C.A. No. 2024-0637-SEM October 11, 2024 Page 4 of 6
walked me through their demand, which contains five requests, explaining: (1)
Request 1, which sought either audited or unaudited financial statements, was no
longer in dispute based on the Defendants’ representation that no such documents
existed for inspection or production, 7 (2) Request 2 was “really at the end of the day
why” we were at trial; 8 (3) Request 3 had been addressed sufficiently in the
Defendants’ productions; 9 (4) Request 4, like Request 1, was resolved based on the
Defendants’ representation that no such documents exist; 10 and (5) Request 5 was
answered sufficiently with Request 3. 11
Later in their presentation, the Plaintiffs touched on the litigation funding and
counsel arrangements. They were termed as “smaller[,]” “fairly ancillary issues,”
which were “follow-ups to information that was provided in the context of this
proceeding.” 12 The Plaintiffs explained that the existence of such arrangements was
disclosed in a June 14, 2024 letter (after this action was filed) and on July 18, the
7 D.I. 34 at 12:5–13 (“[I]f the documents don’t exist, then that’s it.”). 8 Id. at 13:8–13. 9 Id. at 12:22–13 (“It took defendants a couple months to get them to us, but we do have them. That’s fine”). 10 Id. at 12:14–21 (“[I]f the document doesn’t exist, then for purposes of today, we’re done.”). 11 Id. at 12:22–13: (“It took defendants a couple months to get them to us, but we do have them. That’s fine”). 12 Id. at 35:5–13. C.A. No. 2024-0637-SEM October 11, 2024 Page 5 of 6
Defendants promised to provide information by July 23; per the Plaintiffs, to date,
the Defendants have failed to provide any further information or documentation. 13
In the Plaintiffs’ presentation at trial, counsel focused on the Defendants’
objections to production (confidentiality and privilege). The Plaintiffs failed,
however, to make any showing as to the basis for a court-ordered production (e.g.,
that the requested documents were within the remaining scope of the demand and
necessary and essential to the Plaintiffs’ proper purposes for inspection). Thus, it is
not clear in my mind that these issues were adequately preserved for a post-trial
ruling.14
But, secondly, and most importantly, these requests fail on their merits. Even
if preserved, the Plaintiffs have failed to demonstrate that arrangements with
litigation funders and retainer agreements are within the scope of necessary and
essential records responsive to Request 2.15 “As a general rule, . . . inspection rights
are limited by the scope of the demand letter, and a . . . plaintiff will be foreclosed
13 Id. at 35:8–36:11. 14 Cf. In re Est. of DeGroat, 2020 WL 2088992, at *26 (Del. Ch. Apr. 30, 2020) (deeming a counterclaim waived when the plaintiff “did not present evidence on [it] at trial and only reference[d] the claim briefly in post-trial briefing”). 15 Request 2 seeks “[d]ocuments sufficient to show the assets and liabilities of [the Defendants] at year-end 2021, 2022, 2023, and currently[.]” JX11 at 2. C.A. No. 2024-0637-SEM October 11, 2024 Page 6 of 6
from recasting the scope of its demand at the eleventh hour.”16 That is precisely what
the Plaintiffs aim to do. The Plaintiffs implicitly admit that these records are outside
the scope of their demand and hint at their request as some sort of enforcement
mechanism for promises made during the Parties’ meet and confer. But the Plaintiffs
did not seek leave to amend their demand nor have they pled a claim to enforce the
purported agreement; the only claim pled, preserved, and presented for my
consideration was for inspection under Request 2, of records necessary and essential
to the Plaintiffs’ proper purposes for inspection. 17 These records are outside of that
scope and should not be included in the court-ordered production.
The Plaintiffs’ request for arrangements with litigation funders and retainer
agreements with their counsel should be denied. This is a final report, exceptions are
expedited, and absent timely exceptions, the Parties shall submit a proposed
implementing order within five business days.
Respectfully, /s/ Selena E. Molina Magistrate in Chancery
16 Pettry v. Gilead Scis., Inc., 2020 WL 6870461, at *27 (Del. Ch. Nov. 24, 2020), judgment entered, (Del. Ch. 2020). 17 Cf. Apogee Invs., Inc. v. Summit Equities LLC, 2017 WL 4269013, at *4 (Del. Ch. Sept. 22, 2017) (granting plaintiff’s motion for leave to amend its demand under the broad latitude of Court of Chancery Rule 15(a), with no record of undue delay).