In Ramco Asset Management v. USA Rare Earth, 2023 WL 6939263 (Del. Ch. Oct. 20, 2023), Vice Chancellor Sam Glasscock III considered jurisdictional challenges to contract and tort claims arising out of an alleged dilution of equity in connection with a transfer of holdings to a Delaware LLC. The court's decision analyzes specific jurisdiction over non-resident managers in the context of a forum selection provision and demonstrates the limits of Delaware's manager consent statute, 6 Del. C. Section 18-109.

The plaintiffs were former equity holders in an Australian rare-earth mining company, Morzev Pty Ltd. defendant Mordechai Gutnick, a New York resident, was a Morzev director. He decided to transfer the assets of Morzev to a to-be created Delaware LLC. Defendant Pini Althaus, a New York resident, created the Delaware LLC to facilitate the transaction. The plaintiffs were allegedly told by Gutnick that if they agreed to roll over their interests in Morzev to the new Delaware LLC, defendant USA Rare Earth, LLC (USARE), their ownership in USARE would be the same as it had been in Morzev. The parties entered into a series of transactions, including the transfer of their shares to a trust organized under Australian law, defendant Morzev Trust, and exchanged their equity for units of USARE. Instead of receiving the same percentage of ownership of USARE, the plaintiffs received the same or similar number of units, representing a materially smaller ownership in USARE than they had in Morzev.