New York Court Has Jurisdiction to Decide Ownership Dispute Under Delaware General Corporation Law 205

On September 5, 2023, Justice Cohen of the New York County Commercial Division issued a decision in Owen v. Array US, Inc., 2023 NY Slip Op, 33056(U), holding that a New York court has jurisdiction to decide a stock ownership dispute under Delaware General Corporation Law Section 205, explaining:

Defendants argue that even if the contract is sufficiently definite, the alleged agreement to award Plaintiff Array stock is unenforceable under Delaware law because it was not approved by the Array board of directors and is not memorialized in writing.

. . .

Defendants’ argument that this Court does not have jurisdiction to consider the impact of DGCL § 205 on Plaintiffs claims is unpersuasive. The fact that a Delaware statute vests exclusive jurisdiction in the Delaware Court of Chancery does not divest New York of its interest in adjudicating this matter or mandate that this claim be tried in Delaware. For what it is worth, New York state courts have also adjudicated books and records claims under DGCL 220, despite statutory exclusive jurisdiction over such
claims in Delaware Chancery Court.

(Internal quotations and citations omitted).

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