T. Gray Utility & Rehab Co., LLC v. Mack Operations, LLC

• Court: Court of Chancery of Delaware
• Decided: January 12, 2026
• Docket: 2024-1078-LWW
• Status: Published

Opinion

COURT OF CHANCERY OF THE STATE OF DELAWARE LORI W. WILL LEONARD L. WILLIAMS JUSTICE CENTER VICE CHANCELLOR 500 N. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734

January 12, 2026

Thomas A. Uebler, Esquire Blake Rohrbacher, Esquire Sarah P. Kaboly, Esquire Elizabeth J. Freud, Esquire Terisa A. Shoremount, Esquire Benjamin O. Allen, Esquire McCollom D’Emilio Smith Richards, Layton & Finger, P.A. Uebler LLC 920 North King Street 2751 Centerville Road, Suite 401 Wilmington, Delaware 19801 Wilmington, Delaware 19808

RE: T. Gray Utility & Rehab Co., LLC v. Mack Operations, LLC, C.A. No. 2024-1078-LWW

Dear Counsel,

The plaintiffs move for reargument of the dismissal of their fraud claim.1

They assert that I misapprehended facts regarding the pre-closing knowledge of a

defendant’s officer and overlooked the principle of law imputing that officer’s intent

to the defendant. For the reasons explained below, the motion is denied.

I. BACKGROUND

On December 22, 2025, I delivered a bench ruling (the “Ruling”) dismissing

Count IV of the Verified Amended Complaint, which alleged fraud against

1 Pls.’ Mot. for Reargument (Dkt. 38) (“Mot.”); see Defs.’ Opp’n to Pls.’ Mot. for Reargument (Dkt. 40). C.A. No. 2024-1078-LWW January 12, 2026 Page 2 of 6

defendants Mack Operations, LLC and T. Gray Utility/AIMS, LLC.2 The claim

rested, in part, on the theory that the defendants entered into a Membership Interest

Purchase Agreement (“MIPA”) with no intention of fulfilling their covenant to use

“commercially reasonable efforts” to obtain bonding capacity.3

I dismissed this claim for failure to meet Court of Chancery Rule 9(b)’s

particularity standard. I held that the plaintiffs failed to plead specific facts

supporting a reasonable inference that the defendants did not intend to perform at

the time their promise was made.4 In doing so, I explained that the plaintiffs’ theory

of fraudulent intent relied on claims in a separate lawsuit (US INFRA) where the

defendants are the alleged victims of accounting fraud.5 I also observed that the

complaint stated the defendants discovered the fraud post-closing, which could not

support a claim for fraud in the inducement.6

2 Tr. of Telephonic Rulings of Ct. on Defs.’ Mot. to Dismiss (Dkt. 39) (“Mot. to Dismiss Ruling”). 3 Verified Compl. (Dkt. 1) ¶¶ 124-25, 131-32. 4 Mot. to Dismiss Ruling 28-29. 5 Id. at 29; see US INFRA SVCS Buyer, LLC v. JDB Cap. P’rs, LLC, C.A. No. 2024-0097-LWW. 6 Mot. to Dismiss Ruling 29-30. C.A. No. 2024-1078-LWW January 12, 2026 Page 3 of 6

On December 29, 2025, the plaintiffs filed their motion for reargument of the

dismissal of the fraud claim against Mack (the “Motion”).7 They argue that I

misapprehended the fact that Mihaletos, who they characterize as the “mastermind”

of the alleged accounting fraud in US INFRA, signed the MIPA on Mack’s behalf.8

They also posit that under Delaware agency law, Mihaletos’s knowledge is imputed

to Mack, curing any lack of scienter for their fraud claim.9

II. ANALYSIS

A motion for reargument under Court of Chancery Rule 59(f) will be denied

unless the court has “overlooked a decision or principle of law that would have a

controlling effect or . . . misapprehended the law or the facts so that the outcome of

the decision would be affected.”10 The movant bears a “heavy burden.”11 A Rule

59(f) motion is not a vehicle to rehash arguments already made or to present new

arguments that could have been raised before.12

7 Dkt. 38. 8 Mot. ¶ 4. 9 Id. ¶ 7. 10 Stein v. Orloff, 1985 WL 21136, at *2 (Del. Ch. Sept. 26, 1985). 11 In re ML/EQ Real Est. P’ship Litig., 2000 WL 364188, at *1 (Del. Ch. Mar. 22, 2000). 12 See Oliver v. Bos. Univ., 2006 WL 4782232, at *1-2 (Del. Ch. Dec. 8, 2006); see also ML/EQ Real Est., 2000 WL 364188, at *1 (“Such motions are not a mechanism for litigants to relitigate claims already considered by the court.”). C.A. No. 2024-1078-LWW January 12, 2026 Page 4 of 6

The plaintiffs have not identified any material fact or legal principle that I

overlooked or misapprehended. Rather, the Motion attempts to relitigate the

sufficiency of the pleadings as to scienter—an issue fully briefed and argued on the

motion to dismiss. It identifies no valid grounds for reargument.

First, the plaintiffs’ argument about imputation is not new. The plaintiffs

previously argued that Mihaletos’s knowledge should be imputed to Mack because

he signed the MIPA.13 I considered those arguments and related allegations in the

complaint and found them insufficient to support a viable claim for promissory

fraud.14

Second, the Motion fails because the imputation of Mihaletos’s knowledge

would not cure the defect identified in the Ruling. I held that the plaintiffs failed to

plead particularized facts showing the defendants had no intention of performing the

contractual promise at issue—the use of commercially reasonable efforts to obtain

bonding—when the MIPA was signed.

The plaintiffs insist that because Mihaletos purportedly knew of accounting

irregularities (in the US INFRA context), Mack knew it was impossible to obtain

bonding and thus never intended to perform the bonding covenant in the MIPA. I

13 Pl.’s Answering Br. in Opp’n to Defs.’ Mot. to Dismiss (Dkt. 22) 45-46. 14 Mot. to Dismiss Ruling 29-30. C.A. No. 2024-1078-LWW January 12, 2026 Page 5 of 6

rejected this strained inferential chain as a “logical leap . . . unsupported by

particularized facts.”15 I declined to draw the unreasonable inference that because

the defendants were victims of fraud in that separate matter, they must have

possessed fraudulent intent in this transaction.

Imputing Mihaletos’s knowledge to Mack does not bridge that gap. Nor does

historical knowledge of accounting problems equate to a present intent to breach a

future efforts covenant. As I noted in the Ruling, the plaintiffs failed to plead facts

showing that the defendants knew, as of October 2021, that the accounting issues

would render performance impossible.16

None of the authorities cited by the plaintiffs warrant a different outcome.

They involve scenarios where corporate officers knew about the specific falsity of

the representation at issue.17 Here, the defect is not whether Mack knew what

Mihaletos knew, but whether what Mihaletos knew supports an inference of

promissory fraud regarding the bonding covenant. I concluded that such knowledge

15 Mot. to Dismiss Ruling 29. 16 Id. 17 See EMSI Acq., Inc. v. Contrarian Funds, LLC, 2017 WL 1732369, at *13-14 (Del. Ch. May 3, 2017); Great Hill Equity P’rs IV, LP v. SIG Growth Equity Fund I, LLP, 2014 WL 6703980, at *21 (Del. Ch. Nov. 26, 2014); NetApp, Inc. v. Cinelli, 2023 WL 4925910, at *12 (Del. Ch. Aug. 2, 2023). C.A. No. 2024-1078-LWW January 12, 2026 Page 6 of 6

did not reasonably support the necessary inference. The plaintiffs’ disagreement

with that conclusion is not grounds for reargument.

III. CONCLUSION

The plaintiffs have not met their burden under Rule 59(f). The Motion is

denied. IT IS SO ORDERED.

Sincerely yours,

/s/ Lori W. Will

Lori W. Will Vice Chancellor