Barry M. Klayman, left, and Mark E. Felger, right. Courtesy photos Court Refuses Appointment of a Custodian Under DGCL Section 226(a)(3) to Continue Defunct Corporation
Although Vice Chancellor Travis Laster denied the petition based on the language of the statute, his opinion appears to abandon the court's previous policy against permitting the revival of defunct Delaware corporations for use as blank check companies.
March 02, 2022 at 09:00 AM
7 minute read
Commentary
In In re Forum Mobile, C.A. No. 2020-0346-JTL (Del. Ch. Feb. 3, 2022), petitioner Synergy Management Group LLC sought to revive a defunct Delaware corporation in order to use it as a blank check company. Synergy sought to have its president, Benjamin Berry, appointed as a custodian for the defunct corporation, Forum Mobile, Inc., utilizing Section 226(a)(3) of the Delaware General Corporation Law. Section 226(a)(3) provides that the Delaware Court of Chancery, upon application of any stockholder, may appoint one or more persons to be custodians of a corporation when the corporation has abandoned its business and has failed within a reasonable time to take steps to dissolve, liquidate or distribute it assets. Although Vice Chancellor Travis Laster denied the petition based on the language of the statute, his opinion appears to abandon the court's previous policy against permitting the revival of defunct Delaware corporations for use as blank check companies.
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