For the second time in less than a month, the Delaware Court of Chancery has invoked the rarely-used Gentile doctrine to permit shareholders’ derivative dilution claims to proceed as direct claims because controlling shareholders allegedly benefited from the dilution. By applying the Gentile doctrine, established in a 2006 state Supreme Court decision, the Chancery Court allowed five software developers who worked for a health care technology company to pursue dilution claims against a venture capital group that obtained control of the company’s board of directors.
Vice Chancellor J. Travis Laster issued the 77-page opinion in Carsanaro v. Bloodhound Technologies on March 15.
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