Sometimes more is not a good idea. That is the case when a complaint alleges multiple bases to invoke the jurisdiction of the Delaware Court of Chancery, but still fails to sustain that subject matter jurisdiction. The recent decision in Yu v. GSM Nation, Del. Ch. C.A. No. 12293-VCMR (July 7), shows why that can be a costly failure. For the plaintiff in the GSM case spent over a year trying to sustain the Court of Chancery’s jurisdiction only to fail to do so. Had the plaintiff instead filed in the Delaware Superior Court’s CCLD docket, he very well might have had a trial by the time his Court of Chancery complaint was dismissed.
The facts alleged in the GSM complaint were fairly straight forward. Warren David Yu lent GSM $3,500,000 to develop its new business. When GSM failed to repay him under the terms of the loan documents, Yu sued GSM, its founding member Ahmed Khattak and several entities related to Khattak. The Yu complaint alleged six counts, using the “magic words” he thought would invoke the Court of Chancery’s jurisdiction. He failed, however, to allege facts that supported that jurisdiction.
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