Delaware Court of Chancery Opinion on Motion to Dismiss

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE TODD MACLAUGHLAN, individually and derivatively on behalf of Profounda, Inc., Plaintiff, v. ILANA EINHEIBER, GREGORY ORLESKI, MORRIS GOODMAN, and JODDES LIMITED, Defendants, and PROFOUNDA, INC., a Delaware corporation, Nominal Defendant.)))))))))))))))))))) C.A. No. 2024-1126-JTL OPINION REGARDING MOTION TO DISMISS Date Submitted: November 17, 2025 Date Decided: February 26, 2026 Robert L. Burns, Kevin M. Gallagher, RICHARDS, LAYTON & FINGER, P.A., Wilmington, Delawar e; Mor gan J. Hanson, Lucy E. Hill, DENTONS COHEN & GRIGSBY P.C., Pittsburgh, Pennsylvania; Attorneys for Plaintiff Todd MacLaughlan. Megan Ward Cascio, Cassand ra L. Badd orf, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, Delaware; Attorneys for Defendants Ilana Einheiber, Gregory Orleski, Morris Goodman, Joddes Ltd., and Nominal Defendant Profounda, Inc. LASTER, V.C.

Plaintiff Todd MacLaughlan founded Profounda, Inc. (the “Comp any”). He obtained funding from an affiliate of defendant Morris Goodman. 1 T he Company secured a profitable contract, and MacLaughlan contends that he was entitled personally to 30% of the profits. Morris, by contrast, contends that MacLaughlan disloyally div erted a corporate asset by taking a share of the profits. After Mor ris raised the diversion claim, he and a collea gue left the board, a nd Morris filled the vacancies with individuals who serve as officers for two of his affiliates. The new directors are investigating the diversion claim. MacLaughlan responded with this lawsuit. He contends that the diversion claim is so unfounded that the two director s are breaching thei r fiduciary duties by investigating it instead of dissolving the Company and winding up its affairs. MacLaughlan also contend s that Morris breached his fiduciary duties by ig noring the Company’s operations until he saw an opportunity to use the diversion claim to benefit himself. And MacLaughlan contends tha t Morris a nd the affili ate he used to fund the Company breached thei r fiduciary duties as controlling stockholders by electing the new directors to con duct a bad faith investigation. He further contends that Morris and his affil iate breached their fiduciary duties as controlling stockholders by preventing the C ompany’s contractual counterparty from renewing 1 I usually refer to individuals b y their last names wi thout honorifics. Several members of the Goodman family play roles in this case. After their initial appearances, this dec ision refers to them using their first na mes, without implying familiarity or intending disrespect.

2 the profitable agreement. MacLaughlan asserts that the same conduct constitutes tortious interference with the C ompany’s business relations hips. Morris ’s affiliate moved for dismissal under Rule 12(b)(2), c ontending that the court cannot exercise personal jurisdiction over it. The cour t lacks personal jurisdiction over the a ffiliate, because it has not engaged i n any Delawa re-directed act that could support jurisdiction under Delawa re’s long -arm statute. The affiliate is a controlling stockholder, but Delaware lacks a consent- to -jurisdiction stat ute for controllers, and there is no other way to reach the affiliate. As control mechanisms proliferate and become more gr anular, 2 the i nability to exercise personal jurisdiction over the party pulling the strings could present a public poli cy issue, albeit a fixable one. 3 2 See 8 Del. C. § 122(18) (authorizing governance agreements that contain granular control mechanisms, including a provision “requi r[ing] the approval or consent of 1 or more persons or bodies b efore the corporation may ta ke a ctions specified in the contract (which persons or bodies may include the board of directors or 1 or more current o r future directors, stockholders o r beneficial owners of stock o f the corporation)” or “c ovenant[ing] that the corporation or 1 or more persons or bodies will take, or refrain from ta king, actions specified in the contract (which persons or bodies may include the board of directors or 1 or more current or future directors, stockholders or beneficial owners of stock of the corporation”); W. Palm Beach Firefighters ’ Pension Fund v. Moelis & Co., 311 A.3d 809, 825 – 27 (Del. Ch. 2024) (describing suite of granular control mechanisms that Section 122(18) expressly validated). 3 The case for statutory cons ent-based jurisdiction over controlling stockholders seems a t least as compelling as the case was in 2002 for officers. See William B. Chandler III & Leo E. Strine, Jr., T he New Federalism of the American Corporate Gove rnance System: Preliminary Reflections of Two Residents of One Small State, 152 U. Pa. L. Rev. 953, 1003 – 04 (2003) (advancing proposal for statutory consent-based jurisdiction over officers that appeared first in Ro bert B. Thompson & Hillary A. Sale, Securities Fraud a s Corporate Governance: Reflecti ons Upon

3 Unlike his affiliate, Morris consented to personal jurisdiction in Dela ware for claims sufficiently related to his service as a director. Moreover, if the complaint asserts a viable claim aga inst Morris in his capacity as a director, then the court can exercise ancillary jurisdiction over Morris for the claims against him in his non- director capacities, because all are sufficiently interrelated. But the complaint fails to state a viable claim ag ainst Morris in hi s capacity as a director, so t he court lacks personal jurisdiction over him for the other claims. The claims aga inst Morris and his affiliate as controlling stockholders, conspirators, and tortious interferers are dismissed without prejudice. Federalism, 56 Vand. L. Rev. 859, 906 (2002) (“For Delaware to expand i ts focus on officer conduct it would have to amend its j urisdictional statute to i nclude officers rather than just directors.”)). The case for statutory consent-based jurisdiction over controlling stockholders seems more comp elling than the concept of de fa cto consent- based jurisdiction over aiders and abetters, as contemporaneously a dvocated in 2002. See Chandler & Stri ne, supra, at 1 004 (“ [S]ection 3114 could also be amended to clarify that a ny person who aids a nd abets a breach of fiduciary duty against a Delaware corporation i s subject to jurisdiction in Delaware so long as Delaware ’ s exercise of j urisdiction is consistent with federal constitutional standards of due process.... So long as the Delaware courts are satisfied that the fundamental fairness concerns of the federa l due process test are satisfied, they should not hav e to trifle with the application of a long-arm statute designed for other purposes (namely, tort and contract cases).”). The case for statutory consent -based jurisdiction over controlling stockholders is particularly strong since the Safe Habor Amendment departed from histor ical practice by esta blishing a hard floor for non-majority contr ol at one-third of the voting power. Compare 8 Del. C. § 144 (e)(2) with J. Travis Laster, How to Evaluate Majority Control: What History and Statutes Tell Us — Part One: The Historical Dominance of Functionalism, 31 Fordham J. Corp. & Fin. Law 1 (2025). A person who acquires one-third or more of t he v oting power can implicitly consent to jurisdiction in the Delaware courts, just like a person who b ecomes a direc tor or officer. Cf. 10 Del. C. § 3114(a) & (b).

4 Morris and the two current directors face cl aims for b reach of fiduciary duty i n their capacities as directors. The y moved to d ismiss those c laims under Ru le 12(b)(6) and, to the extent they are deriva tive, Rule 2 3.1. The Rule 23.1 analysis turns on whether the complaint states clai ms that present a substantial risk of li ability, and that requires allega tions that state a claim. It therefore ma kes sense to proceed under Rule 12(b)(6). Under Rule 12(b)(6), the allegations against Morris and the two current directors fail to state claims on which relief can be granted. Either MacLaughl a n cannot stat e a claim under the applicable standard of conduct, or his theories fail under the a pplicable standard of review. T he conspiracy clai m fail s for want of a primary wrong. One claim, however, survives. MacLaughlan seeks a declaratory judgment that he did not improperly divert a corporate asset. That claim is ripe and can move forward. The Comp any is both the lone remaining d efendant and the pr oper defendant on this clai m. MacLaughlan must file a second amended complaint that names the Company as a merits defendant, rather tha n a nominal defendant, so that the litigation can proceed.

5 I. FACTUAL BACKGROUND The facts are drawn from the wel l-pled allegations of the amended complaint (the “Complaint”) and the documents it incorporates by reference. 4 At this stage, the Complaint’s allegations are assumed to be true, and the plaintiff rec eives the benefit of all reasonable inferences. A. The Company And Genarest MacLaughlan is an entrepreneur in the pharmaceutical i ndustry. In 2013, he founded the Company to develop and secure approval from the U.S. Food and Drug Administration (the “ FDA”) for a drug named Genarest. The Comp any is a Delaware corporation with its principal place of business in Florida. MacLaughlan is the CEO. MacLaughlan obtained funding from J oddes Limited (“Parent”), a Cana dian entity that functions as the family office and umbrella investment vehicle for the Goodman fami ly. Morris is the patriarch of the Goodman family. He cofounded Pharmascience, Inc., a Canadian pharmaceutical manufacturer, a nd Parent holds a controlling interest in that company. Morris resides in Canada. 4 Citations in the form “Compl. ¶ __” ref er to paragraphs of the Complaint, which is the operative plea ding. Dkt. 30. Citations in the form “Ex. __ at ___” refer to exhibits to the Complaint. Id. MacLaughlan argues that the defendants improper ly relied on the incorporation- by -reference doctrine to i ntroduc e two exhibits with their motion to dismiss. One is a n email that the Complaint impli citly referenced. Viewed i n the light most fav orable to the plaintiff, it supports the C omplai nt’s all egations, so its inclusion was i mmaterial. The other exhibit i s a secur ities filing that the defendants submitted to address an issue that this decision need not reach. The defend ants’ foot -fault does not warrant any consequence.

6 Under a Stock Purchase and Stockholders Agreement (the “Governance Agreement”), 5 Parent committed to provide the Company wi th up to $7.5 million in funding. In return, Parent would receive up to 13,240,000 shares of Series A preferred s tock (the “Preferred Stock”). Upon signing, Parent invested $5 00,000 in the Company and received 8 82,667 shares of Preferred Stock. The Governance Agreement split the rest of the funding into tranches that the Company could draw after hitting developmental milestones. Each time Parent fund ed a tranc he, it would receive the right to purchase additional shares of Preferred Stock. The Governance Agreement called for the Company to maintain a board of directors wi th three seats (the “Board”). T he Governance Agreement gave MacLaughlan the r ight to appoint one director, and he appointed himself. The Governance Agreement gave Pa rent the right to appoint two directors, a nd it appointed Morris a nd Isabelle Trempe, an executive with a Canadian pharmaceutical company called Knight Therapeutics, Inc. (“Knight”). Jonathan Goodman, Morris’s son, founded Knight, serves as its e xecutive chairman, and is its largest stockholder. The Governance Agreement required B oard approval, “includ[ing] the affirmativ e vote of all [Parent’s appointees],” b efore the Company could “enter new lines of business.” 6 5 Ex. B. 6 Id. § 3.

7 B. The Orphan Drug In 2015, J onathan approached MacLaughlan about Impavi do, a drug owned by Knight. The FDA had granted orphan drug status to Impavido, so this decision calls it the “Orphan Drug.” 7 Knight needed a partner to launch the Orphan Drug in the United States. Jona than asked MacLaughlan to launch the Orphan Drug in return for 30% of the profits. A company launching a drug in the United States must obtain a license from the FDA and from every state where the company does business. The licensing process can be ex pensive, and Knight expected the Orphan Drug to generate approximately $1 million in annual sales. J onathan and MacLaughl an agreed that it did not make financial sense for MacLaughl an to form a separate company and pursue the necessary licenses. Instead, they a greed that the Company woul d license the rights from Knight and carry out the launc h, but that MacLaughla n’s 30% share of the profits woul d still go to MacLaughlan personally (the “Oral Profits Agreement”). MacLaughlan contends that Morris approved the Ora l Profits Agreement. According to MacLaughlan, Morris said that formal Board-level approval for the Oral 7 A drug can qualify for orphan drug status if it is intended to treat a c ondition affecting fewer than 200,000 people in the Uni ted States or if it will not be profitable within seven years after FDA approval.

8 Profits Agreement was not necessary, and MacLaughlan accepted that. It is not clear why they thought that. 8 On September 25, 2015, the Company entered into a Distributio n and License Agreement with Knight Therapeutics (USA) Inc., a Kni ght subsid iary, that covered the Orphan Drug (the “Orphan Drug Agreement”). The Orphan D rug Agreement does not reference the Oral Profits Agreement. The Company l aunched the Orphan Drug in the United States on March 1 6, 2016. MacLaughlan then secured orphan drug designations for five new i ndications and patented two off-label uses, and he succ essfully marketed the Orphan Drug for those uses. As a resul t, the Orphan Drug g enerated far more pr ofits than expected, with the off-lab el indications responsible for approximatel y 80% of its sales. In total, the Orphan Drug has generated some $56 mi llion i n profits. Cons istent with the Oral Profits Agreement, the Company has paid 70% of the profits, or some $39 million, to Knight. 8 Perhaps they thought that becaus e Morris and MacLaughlan constituted two of the three directors, their joint approval was sufficient for Board-level signoff? The Complaint suggests that MacLaughlan attributed significance to Morris’ s control of Parent, so ma ybe they had some theory a bout Morris and MacL aughlan’s approval constituting ratification by a stockholder s upermajority (the onl y other stockholders were a few employees)? The emai l the defendants introduce d i n whi ch Morris inferably rejects the need for specific Board approval suggests he was shooting from the hip. “Men often a ct first and think afterwards.” F. W. Maitland, Trust and Corporation, in State, Trust and Corpor ation 75, 89 (David Runc iman & Magnus Ryan eds., 2003).

9 C. Morris Asserts The Diversion Claim. The Company continued to hit the mi lestones for Genarest that triggered Parent’s funding obligations, but development was taking more time than expected. Rather than draw on Parent’s funding commitment s, MacLaughl an us ed his sh are of the profits from the Orp han Drug to fund t he Comp any’s efforts to develop Genarest. At some point in 2016, Morris asserted that MacLaughlan’s 30% share of the Orphan Drug’s profits belonged to the Company, rather than to MacLaughlan personally. If true, then MacLaughl an had wrongfull y diverted those funds (the “ Diversion Claim ”). In early 2017, the parties discussed potentia lly revising the Governance Agreement to address the Diversion Claim, but nei ther side made a formal proposal. In April 201 7, MacLaughlan declined to revise the Gov ernance Agreement. He took the position that the Company only had intellectual pr operty rights related to Genarest and never had any rights to the Orphan Drug or the revenue it generated. Because of the disagreement over the Diversion Claim, MacLaughlan formed Profounda Health & Beauty, Inc. (the “Separate Entity ”) in September 2019. Since then, MacLaughlan has pursu ed al l of his pharmaceutical-related activities other than Genarest through the Separate Entity. M acLaughlan has been transfer ring his 30% share of the profits from the Orphan Drug to the Separate E ntity, and he shifted the Company’s operational expenses to the Separate Entity, including its rent, utilities, and payroll.

10 D. Genarest Fails To Receive FDA Approval. In April 2022, the Company sought FDA approval for Gena rest. In May, the FDA denied the applicati on and stated that some of the supporting studies needed to be re-done. That work would cost $1.5 to $2 million. Morris did not wa nt to fund those costs. In March 202 3, he told MacLaughlan that Parent and the Company should part ways. In June, he asked MacLaughl a n to have the Company r epur chase Parent’s equity for its in vested cap ital of $4.5 million. Morris claimed the money had been an interest-free loan rather than a capital contribution. MacLaughlan countered that the Company should dissolve and wind down its affairs. Morris disagreed. E. Morris Investigates The Diversion Claim. After MacLaughlan rejected Morris’s re purchase proposal, Morris began to investigate the Diversion Claim. On August 21, 2023, on behalf of Parent, Morr is demanded virtuall y all of the Company’s books and re cords. MacLaughla n provided financial information about the Company, including profits from the Orphan Drug. On February 1, 2024, Morris caused Parent to replace him a nd Parent’s other Board designee with Gregory Orleski, Pharmascience’s Vice President and General Counsel, and Ilana Einheiber, Parent’s CFO. Orleski immediately called a special meeting of the Board for February 27, to review the Company’s finances, including management’s compensation. Durin g the meeting, Orleski and Einheiber asserted the Di version Claim. Since that Board meeting, Orleski and Einheib er have

11 reiterated the Diversion Claim. MacLaughlan has rejected the Diversion Claim and countered that the Company sh ould dissolv e and wind up its operations. Orleski and Einheiber have refused to address his dissolution proposal. On February 6, 2024, just days after Parent replaced its Board designees, Jonathan contacted MacLaughl an a bout the Orphan Drug Agreement, which was up for renewal in 2025. MacLaughlan had previously reached out to Jonathan to discuss renewing the Orphan Drug Agreement. Jonathan reported to MacLaughlan that Marc Rouleau, Parent’s President and CEO, had told him not to communicate with MacLaughlan. On May 28, 2024, MacLaughlan sent a formal letter to Jonathan ab out renewing the Orphan Drug Agreement. Jonathan did not meanin gfully respond. On June 6, 2024, MacLaughlan called a special meeting of the Company’s stockholders to cons ider dissolution. Parent objected, and the two sides a greed to schedule the meeting for September 6. On August 7, 2 024, one of Knight’s outside directors told MacLaugh lan that Knight would not renew the Orp han Drug Agreement because of the dispute over the Diversion Claim. On Septemb er 5, Kni ght asserted that the Company had failed to commit to industry-standard pharmacovigilance a nd quality-control agreements. An agreement addressing those issues al ready ex isted between Kni ght a nd the Company. In the same letter, Knight exercised its right to conduct an in -person quality audit of the Company. Knight also exercised i ts right to conduct a financial audit of

12 the Company. Knight has the right to conduct audits, b ut it had only conducted one virtual quality audit in the past nine years. MacLaughlan believes that a ll of these a ctions are related. He thinks Morris knows the Diversion Claim is meritless, but is using Parent ’s c ontrol over the Company and his influence over Jonathan and Knight to press ure Mac Laughlan into buying back Parent’s Preferred Stock. F. The Committee On September 4, 2024, Orleski a nd Einheib er held a special meeting of the Board. Rouleau also attended. MacLaughlan objected that the meeting had not been properly noticed. During the meeti ng, Orleski and Einheiber appointed themselves to a special committee (the “Committee”) empowered to investigate the Diversion Claim. They suspended any payments to the Separate Company pend ing the outcome of their investigation. MacLaughlan objected to the creation of the Committee. He asserted that Orleski and Einheiber were not d isinter ested directors and could not conduct a n independent investigation given their close ties to Morris and Parent. On September 6, 2024, MacLaughlan convened a special meeting of the Company’s stockholders. The stockholders approved a resolution declaring tha t Genarest’s further development was not commercially practicable. The resolution also declared that the Board should develop a plan to dissolve the Company and wi nd

13 up its affairs within fifteen days (the “Di ssolution Resolution”). 9 Parent was not present and did not vote, so the stockholders’ approval was not unanimous. 10 The Board did not comply with the Dissolution Resoluti on. On October 18, 2024, Orleski and Einheiber proposed conditioni ng any dissolution of the Company on the results of the Commi ttee’s investigation. MacLaughla n reiterated his view that the Company should dissolve. G. This Litigation On October 31, 2024, MacLaughlan filed this lawsuit. The Complaint asserts five counts. Count I asser ts a claim for breach of fiduciary duty against Parent, Morris, Orleski, and Einhei ber. The Complaint alleges that al l four defendants breached thei r duty of loyalty to the Company by pursuin g the Diversion Claim, including through Parent and Morris’ s decision to pla ce Orleski and Einheiber on the Board, Orleski and Einheiber’s demands relating to the Diversion C laim, and Orleski and Einheiber’s decision to form the Committee to investigate and potentially pursue the Diversion C laim. The Complaint alleges t hat Orleski and Einheiber also b reached their fiduciary duties by not complyi ng with the Dissolution Resolution. The Complaint alleges that P arent separately b reached its duty of lo yalty by instructing 9 Ex. M. 10 Id. at 1 (listing “Joddes Ltd” as “Not Present”).

14 Knight, its affiliate, not to communicate with MacLaughlan about renewing the Orphan Drug Agreement. Count II seeks a declaratory judgment regarding the existence of the Ora l Profits Agreement. The Complaint asks the court to declare that MacLaughlan, not the Company, possesses the right to 30% of the profits fr om the Orphan Drug. Count II I a sserts a derivative claim for breach of fiduciary duty against Morris, Orleski, and Einheiber. The Complaint alleges that Orleski and Einheiber breached their duty of loyalty by pursuing the Diversion Cla im, citing the same conduct described in Count I. The Complaint a sserts that Morris “ignored his duties as a director of [the Com pany by ] not participating in the business decisions o f [the Company] for years until he felt his $4.5 million investment in the Company (via [Parent]) was at risk.” 11 Count IV asserts a claim for civil conspirac y. T he Complaint al leges that to the extent Parent, Morris, Orleski, or Einheiber did not owe fiduciary duties and breach them, they conspired with those who did. Count V asserts a claim for tortious interference with contract against Parent and Morr is. The Com plaint contends that Parent and Morris unjustifiably interfered with the renewal of the Orphan Drug Agr eement b y i nstructing Knig ht employees not to communicate with the Company, instructing Kni ght to conduct burdensome 11 Compl. ¶ 201(a).

15 and expensive audits of the Company, and obtaining confidential i nformation about the Orphan Drug from Jonathan. II. PARENT’S RULE 12(B)(2) MOTION Both Parent and Morris moved for dismissal under Rule 1 2(b)(2) because they contend the court c annot exercise personal jurisdiction over them. Personal jurisdiction often presents a threshold question that a court can and should address up front, b efore reaching the merits. 12 For Pa rent’s moti on, tha t i s true. The court lacks personal jurisdiction over Parent. For Morr is, the answer is more c omplicated. To establish personal jurisdiction over Morris, MacLaughlan relies on the Del aware statute under which directors implicitly consent to jurisdiction in Delaware when they agree to serve (the “Director Consent Statute”). 13 That statute provides jurisdiction for clai ms against Morris in his capacity as a director. It also provides ju risdiction for c laims a gainst Morris in his non-director capacities if there is a viable claim against Morris in his capacity as a director and a suff icient factual relationship between the directo r-capacity claim and the non-director-capacity claims. Morris’s motion therefor e turns on the merits of the 12 See Branson v. Exide Elecs. Corp., 625 A.2d 267, 268 –69 (Del. 1993) (“This Court has concluded that the Court of Chancery should have decided the personal jurisdictional challenge regarding the individual defendants, raised by Exide ’ s motion to dismiss, prior to a ddressing the substantive aspect of that moti on with respect to all defendants. Accordingly, this matter will be remanded to the Court of Chancery for that purpose.”). 13 10 Del. C. § 3114(a).

16 claims against him as a director. This dec ision evaluates Parent’s moti on now and Morris’s motion later. “Generally, a plaintiff does not have the burden to plea d in its complaint facts establishing a court’s personal jurisdiction over defendant.” 14 However, “[w]hen a defendant moves to dismiss a complaint p ursuant to Court of Cha ncery Rule 12(b)(2), the plaintiff bea rs the burden of showing a basis for the court’s exercise of j urisdiction over the defendant.” 15 That burden is an evidentiary one. 16 A verified complaint satisfies the requirements for an affidavit and can p rovide the necessary evidentiary support. 17 But the cou rt is not limited to the allegations of the complai nt and can consider evidentia ry submissions. 18 If the court has not cond ucted an evidentiary 14 Benerofe v. Cha, 1996 WL 535405, at *3 (Del. Ch. Sep. 12, 1996). 15 Ryan v. Gifford, 935 A.2d 258, 265 (Del. Ch. 2007). 16 Hart Hldg. Co. Inc. v. Drexel Burnham Lambert Inc., 593 A.2d 535, 53 8 (Del. Ch. 1991) (Allen, C.). 17 See Bruce E. M. v. Dorothea A. M., 455 A.2d 866, 869 (Del. 1983) (“A verified pleading may also be used as an affidavit if the facts stated therein are true to the party’s own knowl edge.”); accord Weber v. Kirchner, 2003 WL 23190392, at *3 (Del. Ch. Dec. 31, 2003); Taylor v. Jones, 2002 W L 3192661 2, at *2 & n.6 (Del. Ch. Dec. 1 7, 2002). 18 Sample v. Morgan (Sample II), 935 A.2d 1046, 1055 –56 (Del. Ch. 2007) (“In considering a motion to dismiss for lack of personal jurisdiction under Court of Chancery Rule 12(b)(2), I am not limited to the pleadings. Rather, I am ‘p ermitted to rely upon the pleadings, proxy sta tement, affidavits, and br iefs of the parties in order to determine whether the defendants are subject to personal jurisdiction.’” (quoting Crescent/Mach I P’rs, L.P. v. Turner, 846 A.2d 963, 974 (Del. Ch. 2000)); Ryan, 935 A.2d at 265 (“In rul ing on a Rule 1 2(b)(2) motion, the court may consider the pleadings, affidavits, and any discovery of record.”).

17 hearing, then a plaintiff “need only make a pr ima f acie showing” sufficient to support jurisdiction, with the record construed “in the light most favorable to the plaintiff.” 19 If the court takes that appr oach, then the jurisdictional question t echnically r emains open until trial, when the pla intiff must prove the jurisdictional facts by a preponderance of the evi dence. 20 Often, the jurisdictional challenge falls by the wayside, but not always. 21 The facts necessary to establish personal jurisdiction a re often in the defendant’s control. 22 A plaintiff therefore ordinarily may not be precluded from 19 Sprint Nextel Cor p. v. iPCS, Inc., 2008 WL 2737409, at *5 (Del. C h. July 14, 2008); see Sample II, 935 A.2 d at 1056 (“In evaluating the record [on a Rule 12(b)(2) motion], I must dr aw reasonabl e i nferences in favor of the plaintiff.”); Ryan, 935 A.2d at 265 (“If, a s here, no evidentiary hearing has b een held, plai ntiffs need only make a pr ima fac ie sh owing of person al jurisdictio n and the record is construed in the light most favorable to the plaintiff.” (footnotes and internal quotation marks omitted)). 20 Trave lers Indem. Co. v. Calvert Fi re Ins. Co., 798 F.2d 826, 831 (5th Cir. 1986) (“However, ‘at any time when the plai ntiff avoids a preliminary motion to dismiss by making a prima facie showing of jurisdictional facts, he must still prove the j urisdictional facts at trial b y a preponderance of the e vidence,’ or, as otherwise stated, ‘[e]ventuall y, of course, the plaintiff must establish jurisdiction by a preponderance of the evidence, either at a pr etrial evidentiary hearing or at a trial.’” (first quoti ng Data Disc, Inc. v. Sys. T ech. Assocs., Inc., 557 F.2d 1280, 1285 n.2 (9th Cir. 1977); then quoting Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981))). 21 See Arxada Hldgs. NA Inc. v. Harvey, — A.3d —, —, 2026 WL 220511, at *12 – 13 (Del. Ch. Jan. 28, 2026). 22 See Harr is v. Harris, 289 A.3d 277, 296 (Del. Ch. 2023); accord Compagnie Des Bauxites de Guinee v. L’Union Atlantique S.A. d’Assurances, 723 F.2d 357, 362 (3d Cir. 1983); S urpitski v. Hughes-Keenan Corp., 362 F.2d 254, 255 – 56 (1st Cir. 1966).

18 conducting a reasonable amount of jurisdictional discovery. 23 “Only where the facts alleged in the complaint make any claim of personal jurisdiction over defendant frivolous, might the trial court, in the exercise of its discretionary control ov er the discovery pr ocess, preclude reasonable disc overy in aid of establ ishing personal jurisdiction.” 24 As long as the plaintiff has provided “some indication” that the particular defendant is amenable to suit, then jurisdictional discovery is appropriate. 25 Under Delaware law, the exercise of personal j urisdiction has two requirements. 26 First, the p laintiff must identify a valid method of serving proc ess on the defendant. Secon d, the exerc ise of personal jurisdiction through the service of process must re st o n sufficient minimum contacts between the defendant and Delaware that it “does not offend traditional notions of fair play and substantial justice.” 27 23 Harris, 289 A.3d at 296; accord Hart, 593 A.2d at 539 (“As a plaintiff does have an ev identiary b urden, she may not be precluded from attempting to pr ove that a defendant is subject to the j urisdiction of the court, and may not ordinarily be precluded from reasonable discovery in aid of mounting such proof.”). 24 Hart, 593 A.2d at 539; accord Harris, 289 A.3d at 296. 25 Hanse n v. Neumuell er GmbH, 163 F.R.D. 471, 475 (D. De l. 1995); see Oppenheimer Fund, Inc. v. Sanders, 43 7 U.S. 3 40, 351 n.13 (1977) (“[W]here issues arise as to j urisdiction or venue, discovery is available to ascertain the facts bearing on such issues.”). 26 Matthew v. Fläkt Woods Gp. SA, 56 A.3d 1023, 1027 (Del. 2012). 27 Id. (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

19 To establish personal jurisdiction ov er Parent, MacLaughlan relies on the conspiracy theory of jurisdiction. 28 MacLaughlan’s effort to invoke that theory fails. A. The Test For Conspiracy Jurisdiction Under the conspiracy theory of jurisdiction, a conspirator who i s absent from the forum state is su bject to the jurisdiction of the court, assuming he i s properly served under state l aw, if the plaintiff can make a factual showing that: (1) a conspiracy to defraud existed; (2) t he defendant wa s a memb er of that conspiracy; (3) a substantial act or substantial effect in furtherance of the conspiracy occurred in the forum state; (4) the defen dant knew or had reason to know of the act i n the forum stat e or that acts outside the forum state would have an effect in the forum state; and (5) the act in, or effect on, the forum state was a direct a nd foreseeable result of the conduct in furtherance of the conspiracy. 29 The theor y rests “on the legal principle that one conspirator’s acts are attributable to the other c onspirators.” 30 Thus, “if the purp oseful act or acts of one c onspirator are of a nature and quality that would subj ect the actor to the jurisdiction of the court, al l of the conspirators are subject to the jurisdiction of the court.” 31 By sati sfying the requirements for the conspiracy theory of j urisdiction, a plaintiff satisfies both elements of the two -prong jurisdictional test. The first three 28 See id. 29 Istituto Bancario It aliano SpA v. Hunte r Eng’g Co., Inc., 4 49 A.2d 210, 225 (Del. 1982). 30 Fläkt Woods, 56 A.3d at 1027. 31 Istituto Bancario, 449 A.2d at 222.

20 Istituto Bancario elements satisfy the requirements for se rving process under Delaware’s long- arm statute (the “Long - Arm Statute”). T hat statute states: As to a cause of action b rought by any person arising from any of the acts enumerated in this sec tion, a co urt may exercise personal jurisdiction over any nonresident, or a personal representative, who in person or through an agent: (1) Transacts any business or performs any character of work or service in the State . . . . 32 The forum- directed a ctivity can be accomplished “through an agent.” 33 “[A] single transaction is sufficient to confer j urisdiction where the claim is based on that transaction.” 34 The first three Istituto Bancario elements track the statutory requirements of the Long-Arm Sta tute. Meeting the third Istituto Bancario element — showing that a “substantial act or substantial effect in furtherance of the conspiracy occurred in the forum state” 35 — satisfies the Long- Arm Statute’s requirement that the defendant transact business or p erform work in Delaware. M eeting the f irst and second Istituto Bancario elements —the existenc e of a conspiracy a nd the defendant’s membership in it — imputes the j urisdiction-conferring act to the defend ant und er agency 32 10 Del. C. § 3104(c)(1). 33 Id. § 3104(c). 34 Cresce nt/Mach I P ’rs, L.P. v. Turner, 846 A.2d 963, 978 (Del. Ch. 2000) (internal quotation marks omitted); accord LaNuova D & B, S.p.A. v. Bowe Co., Inc., 513 A.2d 764, 768 (Del. 1986). 35 Istituto Bancario, 449 A.2d at 225.

21 principles. 36 The conspiracy theory thus may not be an independent basis for establishing personal jurisdiction, but meeti ng the first, second, and third el ements meets the Long- Arm Statute’s requirements. The third, fourth, and fifth elements a ddress the constitutional dimension. The third element requires more than just any act or effect i n Del aware; it demands “a substantial act or substanti al effect in furtherance of the conspiracy.” 37 That requirement speaks to the sufficiency of the forum-directed contacts. The fourth and fifth elements —whether the defendant “k new or had reason to know of” the forum - directed activ ity and the degree to which the forum - directed act ivity was “a direct an d foreseeable result of the conduct in furtherance of the conspiracy” 38 — address whether the defen dant could reasonably anticipate being sued in Delaware. 39 “[A] defendant who has so voluntarily participated in a conspiracy with knowledge of its acts in or effects in the forum stat e can be said to have purposefully availed hi mself of the privil ege of con ducting activiti es in t he forum state, thereb y fairly in voking the 36 Hercules Inc. v. Leu Tr. & Banking (Bahamas) Ltd., 611 A.2d 476, 481 (Del. 1992) (“[C]onspirators are considered agents for jurisdictional purposes.”); accord Carlton Invs. v. TLC Beatrice Int’l Hldgs., Inc., 1995 WL 694397, at *12 (Del. Ch. Nov. 21, 1995) (Allen, C.). 37 Istituto Bancario, 449 A.2d at 225. 38 Id. 39 See Carlton Invs., 1995 WL 694397, at *12.

22 benefits and burdens of its laws.” 40 Where the third, fourth, and fifth elements are satisfied, a defendant has sufficient minimum contacts with Del aware to satisfy due process. B. The Absence Of A Substantial Delaware-Directed Act MacLaughla n’s effort to invoke the conspiracy theory cannot satisfy the third element: “a substantial act or substantial effect in furtherance of the conspiracy occurred in the forum state.” 41 The Complaint fails to identify a single Delaware- directed act that could meet this requirement. MacLaughlan alleges that Parent, through Morris, Einheiber, and Orl eski, weaponized the Company’s corporate form to further its own interests, i ncluding by creating the Committee to investigate the Diversion Claim. MacLaughlan asserts that a conspiracy designed to facilitate a breach of fiduciary duty against a minority stockholder in a Del aware corporation satisfies the third Istituto Bancario el ement, citing Crescent. 42 To the contrary, Crescent challenged a merger between two Delaware corporations, effectuated using Delaware l aw and consummated through the filing of a certificate of merger with the Delaware Secret ary of State. 43 That 40 Istituto B ancario, 449 A.2d at 225; accord Hercules, 611 A.2d at 4 82 n.6 (explaining that the consp iracy theory “provi des a framework with which to a nalyze a foreign defendant’s contacts with Delaware”). 41 Istituto Bancario, 449 A.2d at 225. 42 Crescent, 846 A.2d 963. 43 Id. at 977.

23 Delaware act satisfied the third element of the Istituto Bancario test and served as the cornerstone for the assertion of conspiracy jurisdiction. The na ture of the claim, its support in Delaware l aw, and the injury to minority stockholder s i n a Delaware corporation helped satisfy the due process requirement. It did not supply the Delaware-directed act. MacLaughlan is not entitled to conduct jurisdictional discovery in search of a Delaware-directed act. He has not alleged any combination of facts tha t could suggest the existence of a Delaware-directed act. Jurisdictional disc overy would requ ire trawling for a Delaware nexus. A party mu st have some g eneral idea where to search. Because MacLaughlan has failed to i dentify a valid method of serving process on Parent, the assertion of jurisdiction fails. The court need not address due pr ocess. Parent’s motion to dismiss under Rule 12(b)(2) is granted. Counts I, II, IV, a nd V name Parent as a defendant. T he court lacks personal jurisdiction over Parent, so the c ourt does not a ddress the claims against Parent that appear in those counts. III. THE CLAIMS AGAINST THE DIRECTORS FOR BREACH OF FIDUCIARY DUTY Counts I and III a ssert that Morris, Orleski, and Einheiber br eached their fiduciary duties as directors b y (1) a sserting and investi gating the Diversion Claim and (2) fail ing to abide by the Dissolution Resolution. Count I asserts these theories as direct claims. Count III asserts the theories as derivative clai ms. Evaluating whether the claims a re derivative or direct is less helpful than analyzing their merits. For purposes of the Diversion Claim -related allegations,

24 MacLaughlan tries to state a direct cla im by a rguing that the director s breached fiduciary duties they owed to him. For the reasons that follow, that framing fails to state a claim on which relief can be granted because the directors do not owe fiduciaries to MacLaughlan; they owe fiduciary duties to the corporation and its stockholders as a whole. Count III contends that the Diversion Claim -related allegations support a claim that the directors breached their duties to the Company. That is a derivative claim, and the defendants invoke Rule 23.1 by a rguing that demand wa s not futile. The Compla int attacks Orleski and Einheiber’s abi lity to consider a demand. Dema nd futility turns i n the first i nstance on whether it is reasonably likely that Orleski or Einheiber faces a substantial risk of liability. 44 Demand futility turns i n the second instance on whether Morr is is either i nterested in the Diversion Claim or faces a substantial risk of l iability for his actions relating to the Diversion Clai m, because Orleski and Einheiber are beholden to Morris as officers of his affiliated entities. 45 When demand futility turns on whether a defendant faces a substanti al risk of liability, a court can simply analyze the clai m. 46 The Delaware Sup reme Court 44 United Food & Com. Workers U nion & Participating F ood Indus. Emps. Tri - State Pension Fund v. Zuckerberg, 262 A.3d 1034, 1058 (Del. 2021). 45 Id. 46 Hanna v. Paradise, 2025 WL 1836642, at *8 (Del. Ch. July 3, 2025) (“Because showing that a defendant faces a substantia l likelihood of liability from a claim requires that the claim be legally viable, the Rule 2 3.1 ana lysis as to Wakeford effectively folds into the Rule 12(b)(6) analysis of the Brophy claim against him.”).

25 introduced the substantial-risk-of-liability test to ensure that a plaintiff could not disqualify a director from considering a demand simply by naming the director as a defendant. 47 The goal of the inquiry was to gu ard against strike suits. 48 To satisfy the test, a plaintiff need only “make a threshold showing” that its cla ims “have some merit.” 49 Although precedent calls for “particularize d facts,” tha t requirement does not change the princip le that the pl aintiff r eceives the benefit of favorable inferences on a pleading - stage moti on to dismiss. “When considering a motion to dismiss a 47 Aronson v. Le wis, 473 A.2d 8 05, 814 – 1 5 (Del. 1984). By introducing this test, Aronson marke d a sea change in Delaware law and departed from longstanding precedent, including McKee v. Rogers, 156 A. 191 (De l. Ch. 1931) (Wolcott, C.), Mil ler v. Loft, Inc., 153 A. 861 (Del. Ch. 1931) (Wolcott, C.), a nd Fleer v. Frank H. Fleer Corp., 125 A. 411 (Del. Ch. 1924) (Wolcott, C.). The historical context suggests that Aronson responded to a practitioner contretemps over Zapata Corp. v. Maldonado, 430 A.2d 779 (Del. 1981). Many commentators had expressed fear that Zap ata undermined the b usiness judgment rule. See In re EZCORP Inc. Consulting Agreement De riv. Litig., 2016 WL 301245, at *26 (Del. Ch. J an. 25, 2016) (collecting authorities). The Aronson decision provided an opportunity to cal m the waters by reinforcing Rule 23.1 as a pleading-stage bulwark against weak derivative claims. Aronson itsel f has be en cabined. In Brehm v. Eisner, the Delaware Supreme Court overruled seven decisions, including Aronson, to the extent those precedents reviewed a Rule 2 3.1 decision by the Court of Chancery under an abuse of discretion standard or otherwise suggested defer ential appellate review. 746 A.2d 244, 2 53 n.13 (Del. 2000). The Brehm Court hel d that going forward, appellate review of a Rule 23.1 determination would b e de novo and plenary. Id. a t 2 53. More recently, in Zuckerberg, the Dela ware Supreme Court overruled Aronson ’s test for d emand futility and incorporated it into a new, unified test. 262 A.3 d at 1 059. Desp ite Aronson ’s strategic origins and comp licated subsequent history, the case stands for other propositions that remain foundational to Delaware law. 48 See Hanna, 2025 WL 1836642, at *8. 49 Rales v. Blasband, 6 34 A.2d 927, 934 (Del. 199 3), overruled in part on other grounds by Zuckerberg, 262 A.3d 1034.

26 complaint for failing to comply with Rule 23.1, the Court does not weigh the evidence, must accept as true all of the complaint ’ s particularized and wel l-pleaded allegations, and must draw all reasonable inferences in the plaintiff ’s favor.” 50 A plaintiff need only plead facts that support a claim; “he need not plead evidence.” 51 Compare the resulting plea ding standard with how Delaware courts apply Rule 12(b)(6) when evaluating direct claims for breach of fiduciary duty. There too, a plaintiff must plead “specific facts” and cannot rely on “conclusory allegations.” 52 There too, “the trial court i s not required to accept every strained interpretation of the allegations proposed b y the plaintiff,” but only “reasonable inferences that 50 Zuckerberg, 262 A.3d at 1048. 51 Aronson, 473 A.2d a t 816; accord Brehm, 746 A.2d at 254 (“[T]he pleader i s not required to plead evidence.”). 52 See Price v. E.I. DuPont de Nemours & Co., 26 A.3d 162, 1 66 (Del. 2011) (“We decline... to accept conclusory allegations unsupported by specific facts.... ”); Nemec v. Shrader, 991 A.2d 1120, 1125 (Del. 2010) (“We d o not .. . blindly acc ept conc lusory allegations unsupported by specific facts.... ”); Gantler v. Stephens, 965 A.2 d 695, 704 (Del. 2009) (same); Feldman v. Cutaia, 951 A.2d 727, 731 (Del. 2008) (stating that “conclusory al legations need not b e treated a s true”); In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162, 168 (Del. 2 006) (“A trial court is not... requ ired to accept as true conclusory allegations witho ut sp ecific suppor ting factual a llegations.” (internal quotation marks omitted)); Solomon v. Pathe Commc ’ ns Corp., 672 A.2d 35, 38 (Del. 19 96) (“[C]onclusions... will not be accepted as true wi thout specific allegations of fact to supp ort them.” (internal quotation marks omitted)). Some decisions even cite derivative action precedents when fr aming the Rule 12(b)(6) pleading standard. E.g., In re Nat’l Auto Credit, Inc. S’ holders L itig., 2003 W L 139768, at *12 (Del. Ch. Jan. 10, 2003) (c iting Grobow v. Perot, 539 A.2d 180, 187 – 88 & n.6 (Del. 1988), overruled in part on other grounds by Brehm, 746 A.2d 244); Cal. Pub. Em ps.’ Ret. Sys. v. Coulter, 2 002 WL 31888343, at *15 (Del. Ch. Dec. 1 8, 2002) (same).

27 logically flow from the face of the comp laint.” 53 To be sur e, cases contrast the particularized plea ding standard under Rule 23.1 with the notice pleading standard under Rules 8 and 12(b)(6), 54 and for allegations of d irector disinterestedness and 53 Malpiede v. Townson, 7 80 A.2d 1075, 1083 (Del. 2001); accord Page v. Oath Inc., 270 A.3d 833, 842 (Del. 2022); Caspian Alpha Long Cre dit Fund, L.P. v. GS Mezzanine P ’rs 2006, L.P., 93 A.3d 1203, 1205 (Del. 2014); Gen. Motors, 897 A.2d at 168; see Norton v. K-Sea Transp. P ’rs L.P., 67 A.3d 354, 360 (Del. 2013) (“We do not, however, cred it conclusory allegations that are not supp orted by specific facts, or draw unreasonable inferences in the plaintiff ’s favor.”). 54 E.g., Zuckerberg, 2 62 A.3d at 1048; Brehm, 74 6 A.2d at 254; Malpiede, 780 A.2d at 1083; Solomon, 672 A.2d at 39.

28 independence, the distinction can be meaningful. 55 But for the factual allegations giving rise to a cognizable claim, the standards f unctionally align. 56 55 E.g., In re The S tudent Loan Corp. Deriv. L itig., 2002 WL 75479, at *3 (Del. Ch. Jan. 8, 2002); Akins v. Cobb, 2 001 WL 1360038, at *5 (Del. Ch. N ov. 1, 2001); Gagliardi v. TriFoods Int ’ l, Inc., 683 A.2d 1049, 1054 (Del. Ch. 1996) (Allen, C.). From a purely textual perspective, it is not clear that the particularity requirement applies to the merits allegations supporting a claim. During the development of dema nd futility law, Rule 23.1 stated: “T he complaint [shall]... allege with particular ity the efforts, if any, m ade b y the plaintiff to obtai n the action he desires from the directors or comparable authority and the reasons for his failure to obtain the action or for not making the effort.” T hat language requires part icularity about “efforts” and “reasons.” It sought to require more than a bare allegation that “demand would be futile” or slightly more d etailed allegations that demand would be futile because the defendants would have to sue themselv es, suffer from struc tural bias, or p articipated in the challenged transaction. See Michael P. Dooley & E. Norman Veasey, T he Role of the Board in Derivative Litigation: Delaware Law and the Current ALI P roposals Compared, 44 Bus. Law. 503, 506 (1989). T o my mind, it requires an interpretive stretch to read that language to require particularity in the factual allegations about the underlying cla im that gives rise to a reason for not making the effort — or at least greater factual specificity than Delaware l aw already requires for breach of fiduciary duty claims. 56 L.A. City Emp s.’ Ret. Sys. v. Sanford, — A.3.d —, —, 2026 WL 125986, at *39 (Del. Ch. Jan. 16, 2026) (collecting auth orities); see McPadden v. S idhu, 964 A.2d 1262, 1270 (Del. Ch. 2008) (“Because the standard under R ule 12(b)(6) is l ess stringent than tha t under Rule 23.1, a complaint that survives a motion to dismiss pursuant to Rule 23.1 will also sur vive a 12(b)(6) motion to dismiss, assuming that it otherwise contains sufficient f acts to state a cognizable c laim.” (emphasis added) (footnote omitted)); accord Reith v. Lichtenstein, 20 19 WL 27 14065, at *6 (Del. Ch. June 28, 2019). While serving on this court, for exa mple, Justice Jacobs justified the pleading distinction by noting that “a motion to dismiss under Rule 23.1 i s not intended to test the legal sufficiency of the plaintiff ’ s substantive claim. ” Levine v. Smith, 1989 WL 150784, at *5 (Del. Ch. Nov. 27, 1989), aff ’ d, 591 A.2d 1 94 (Del. 1 991). In other words, the heig htened plea ding requirement addresses disinterestedness and independence. Id.

29 Finally, the claim for fai lure to adhere to the Dissolution Resolution is direct in any event. MacLaughlan claims that the stockholder-level Dissolution Resolution bound the directors and they breached their duties by failing to comply with the stockholders’ right to have the Company dissolved. Rule 1 2(b)(6) is the proper framework for a pleading-stage challenge to that claim. 57 A. The Elements Of A Claim For Breach Of Fiduciary Duty To plead a claim for breach of fiduciary duty, a complaint need only address two elements: “(1) that a fiduciary duty existed and (2) that the defendant breached that duty.” 58 For the allega tions rela ted to the Diversion Claim, the first element is met. The second is not. 1. Fiduciary Status The Comp laint pleads that Morris, Orleski, and Einheiber are fiduciaries. The Complaint pleads that all served as directors and alleg edly acted wrongfully in that 57 See Cent. Mor tg. Co. v. Mor gan Stanley Mortg. Cap. Hldgs. LLC, 27 A.3d 531, 535 (Del. 2011) (articulating standard). 58 Beard Rsch., Inc. v. Kates, 8 A.3 d 573, 601 (Del. Ch.), aff’d sub nom. ASDI, Inc. v. Beard Rsch., Inc., 11 A.3d 749 (Del. 2010).

30 capacity. For over two centuries, American courts have treated corporate directors as fiduciaries. 59 Today, the proposition is axiomatic. 60 2. Breach The element of breach is mor e nuanced. When determining whether c orporate fiduciaries have breached their duties when pursuing a transaction, Delaware law distinguishes between the standard of conduc t and the standard of review. Although 59 The seminal American decision is Att orney General v. Utica Insurance Co., 2 Johns Ch. 37 1 (N.Y. Ch. 1817), an opinion by Chancellor Ja mes Kent, the renowned Chancellor of New York and author of Commentaries o n American Law (18 26 – 30). The first Delaware decisions appear some seventy years later. See Walker’s Adm’x v. Farmers’ Ba nk, 14 A. 819, 831 (De l. 1888); Diamond State Iron Co. v. Todd, 14 A. 27, 30 (Del. Ch. 1888), aff’d, 13 Del. (8 Houst.) 372 (Del. Jan. 16, 1889). Chancellor Charles M. Curtis, who served from 1909 to 1921, provided Del aware’s first meaningful consideration of the duties of corporate fiduciarie s in decisions like Martin v. D.B. Martin Co., 88 A. 612 (Del. Ch. 1913), and Cahall v. Lofland, 1 14 A. 224 (Del. Ch. 1921), aff’d, 1 18 A. 1 (Del. 1922). His successor, Chancellor J osiah O. Wolcott, ser ved from 1 921 unti l 1938 and was one of Delaware’s great jurists. Among Chancellor Wolcott’s contributions are several decisions addressing the role of directors as fiduciaries for the stockholders. See, e.g., Harden v. E. States Pub. Serv. Co., 122 A. 705 (Del. Ch. 192 3); Rob erts v. Kennedy, 116 A. 253 (Del. Ch. 1922). Both Chancellors presided during the period after New Jersey adopted the Seven Sisters Acts, which opened th e door for an envious upstart (as Delaware then wa s) to compete for the chartering business. See Charles M. Yablon, The Historical Race Competition for Corporate Charters and the Rise and Dec line of New Jersey: 188 0 -1910, 32 J. Corp. L. 323, 359 – 67 (2007) (discussing the so-called charter-mongering states that sought to emul ate New J ersey and garner out-of-stat e i ncorporations, including Delaware, Maine, West Virginia, and South Dakota); Joel Seligma n, A Brief History of Delaware’s Gene ral Corporation Law of 1899, 1 Del. J. Corp. L. 249, 27 0 (1976) (discussing the Seven Sisters Acts). Both Chancellors played major — and today underappreciated —roles in establishing this court’s reputation as a venue for corporate cases. 60 Aronson, 473 A.2d at 811 (“The existence and exercise of [the board’s authority under Section 141(a)] carries with it certain fundamental fiduciary obligations to the corporation and its shareholders.”).

31 Delaware decisions t raditionally did not acknowledge that distinc tion, 61 Delaware jurists now do so openly to explain the divergence between the normative framing of what fiduciary duties require and their practical application to th e facts of a case. 62 With the distinction acknowledged, the standard of conduct de scribes what corporate fiduciaries are expected to do and is defined by the content of the duties of loyalty and care. 63 The standard of review is the test that a court applies when evaluating whether directors have met the standard of conduct. 64 61 See David Kershaw, The Foundations of Anglo-American Corporate Fiduciary Law 185, 221 – 22 (2018). Despite the la ck of open acknowledgement, the divergence could be seen i n earlier cases, such as decisions distinguishing between the articula ted duty of directors to exercise reasonabl e care and the liability standard of gross neglige nce. See, e.g., Arons on, 473 A.2d at 8 12; In re Walt Disne y Deriv. Litig. (Disney I), 907 A.2d 693, 749 – 50 (Del. Ch. 2005), aff’d, 906 A.2d 27 (Del. 2006). Professor Kershaw notes that N ew York cases maintained a similar distinction from the late nineteenth century until the codification of the fiduciary standard of care in 1961. See Kershaw, supra, at 185 – 86. 62 See, e.g., Manti Hldgs., LLC v. Car lyle Gp. Inc., 2022 WL 1815759, a t *7 (Del. Ch. J une 3, 2022) (Glasscock, V.C.); Totta v. CCSB Fin. Corp., 2022 WL 1751741, at *15 (Del. Ch. May 31, 2 022) (McCormick, C.), aff’d, 302 A.3d 387 (Del. 2023); In re MultiPlan Corp. S’holder s Litig., 268 A.3d 784, 809 (Del. Ch. 2022) (Will, V.C.); In re Pattern Energy Gp. I nc. S’holders Litig., 2021 WL 1812674, at *30 (Del. Ch. May 6, 2021) (Zurn, V.C.); Cumming v. Edens, 2018 WL 992877, at *18 (Del. Ch. Feb. 20, 2018) (Slights, V.C.); In re Ebix, Inc. S’holder Litig., 201 4 WL 3696655, a t *27 n.202 (Del. Ch. J uly 24, 2014) (Noble, V.C.); Chen v. Howard-Anderson, 8 7 A.3d 648, 666 – 67 (Del. Ch. 2014) (Laster, V.C.); Cargill, Inc. v. JWH Special Circumstance LLC, 959 A.2d 1 096, 1 112 (2008) (Parsons, V.C.); see also Ramsey v. Ga. S. U niv. Advanced Dev. Ctr., 189 A.3d 1255, 1275 n.102 (Del. 2018) (Str ine, C.J.). 63 Chen, 87 A.3d at 666; In re Trados Inc. S’holder Li tig. (Trados II), 73 A.3d 17, 35 (Del. Ch. 2013). 64 Chen, 87 A.3d at 666; Trados II, 73 A.3d at 35 – 36.

32 Working together, the standard of conduct and the standard of review answer Justice Felix Frankfurter ’s well-known questions. As he famously observed: But to say that a man is a fiduciary on ly begins a nalysis; it g ives direction to further inquiry. T o whom is he a fiduciary? What obligations does he owe as a fiduciary? In what respect has he failed to discharge these obligations? And what a re the conseq uences of his deviation from duty? 65 The standard of cond uct answers the first two ques tions: To whom does the fiduciary owe obligations, and what obligations are owed? The standard of review a nswers the third question: How has the fiduciary failed to discharge these obligations? The fourth question concerns the remedy, which is not typically at issue at the pleading stage. 66 65 Sec. & Exch. Comm’n v. Chenery Corp., 318 U.S. 80, 85 – 86 (1943). 66 A Rule 12(b)(6) motion chall enges whether a plaintiff has stat ed a claim on which reli ef could be g ranted, not the ty pes of relief that a plai ntiff mi ght ob tain. A court determines remedies after trial, so a pleading -stage assessmen t is usually premature. E.g., Delawareans for Educ. Opp ortunity v. Carney, 199 A.3d 109, 178 (Del. Ch. 2018) (declining to rule on remedies at the pleading stage, writing that “[w]hether and what kind of remedy issues should be addressed a t a future date”); Bear Stearns Mortg. Funding Tr. 20 06-SL1 v. EMC Mortg. LLC, 2015 WL 139731, at *17 (Del. Ch. Jan. 12, 2015) (“At the pleadings stage, the court wi ll not rule out the possibility of other remedies, such as rescissory damag es.”); see Ambac Assur. Co rp. v. EMC Mortg. Corp., 2009 WL 734073, at *2 (S.D.N.Y. Mar. 16, 2009) (denying defendant’s request to strike rescissory dama ges on the basis that it was premature); Assured Guar. Mun. Corp. v. UBS Real E st. Secs., Inc., 2012 WL 3525613, at *7 (S.D.N.Y. Aug. 15, 2 012) (“It would be premature to strike a remedy at the pleadings stage.”). In some situati ons, however, ruling at the plea ding stage on whether a remedy will b e available can assist in the simplification of the case and the formulating of issues for trial, whi ch are important parts of the trial court’s case management function. S ee Goldstein v. Denner, 310 A.3 d 548, 569 – 71 (Del. Ch. 2024) (discussing trial court’s case manag ement authority); Sunder Energy, LLC v. Jackson, 2023 WL 8 868407, at *16 n.39 (Del. Ch. Dec. 22, 2023) (same); Harris v. Harris, 289 A.3d 310, 342 – 43 (Del. Ch. 2023) (same).

33 The answers to Justice Frankfurter’s q uestions depend on the facts of each case. Fiduciary duties und er Delaware law are “unr emitting,” meaning that they are always operative, but their application is context- dependent, meaning that “the exact course of conduct that must be charted to properly discharge tha t responsibility will change in the specific context of the action the [fiduciary] is taking.” 67 That means that the framework of fiduciary duties can respond to new chall enges and changing circumstances. It also mea ns that the scope of equitable review technically l acks a limiting principle. 68 But directors and officers are not without guidance. The Delaware courts hav e sought to provide directors and officers “with clear signal 67 Malone v. Brincat, 722 A.2d 5, 10 (Del. 1998). 68 See generally Leo E. Strine, Jr. et al., Loyalty’s Core Demand: The Defining Role of Good Fait h in Corporati on Law, 98 Geo. L. J. 629, 633 –34 (2010) (“B ecause the discretion that the DGCL affords directors is so wide, i t is vitally important that directors exercise this discretion to a dvance the corporation’s best interests and not for improper purposes.... [I]t has been traditional for the duty of loyalty to be articulated capaciously, in a manner that emphasizes not only the obl igation of a loyal fiduciary to refrain from advantaging herself at the expense of t he corporation but, just as importantly, t o act aff irma tively to f urther the corp oration’s best interests. In this respect, our law has been clear that the duty of loyalty is implicated by all director actions because all suc h actions must be undertaken in good faith to advance the corporation’s best interests and because directors owe a n affirmati ve obligation to put in a good fai th effort to responsibly carry out their duties.”); id. at 639 (“Because every act of a director must b e done for a proper, loyal purpose, every act in every context implicates the duty of loyalty. And because a loyal director must try to perform her acts with car e, and because the law has embraced an enforc eab le duty of care, every act by a director implicates the duty of care.”).

34 beacons and brightly lined-channel markers as they navigate with due care, good faith, and loyalty on behalf of a Delaware corpor ation and its shareholders.” 69 B. The Claim Based On Allegations Related The Diversion Claim MacLaughlan’s clai ms against the directors principally contend that Morris, Orleski, and Einheiber breached their duty of loyalty by asserting the Diversion Claim and taking steps to investigate it. He a lso contends that Morris a cted disloyally by abdicati ng his duties and not paying any attention to the Company unti l he perceived that the Diversion Claim could be used to advance his own interests. MacLaughlan advanc es two version of those claims. In one version, MacLaughlan asserts that the directors breached duties they owed to him. That framing seems to b e why Count I styles the claim as direct. In the other version, MacLaughlan a sserts that the directors breached duties they owed to the Company. That framing seems to be why Count III styles the claim as derivative. The former framing fails under the standard of conduct. The latter framing fails under the standard of review. 1. Diversion Claim-Related Conduct And The Standard Of Conduct Delaware corporate l aw starts from the bedrock principle that “[t]he business and affairs of every corporation... shall be managed by or und er the direction of a board of directors.” 70 Subject to the strictures of the Del aware General Corporation 69 Malone, 722 A.2d at 10. 70 8 Del. C. § 141(a).

35 Law, 71 provisions in the charter, 72 a nd — most recently — any rights or obligations memorialized in a governance agreement, 73 it remains “[a] cardinal precept of [Delaware law] that directors, rather than shareholders, manage the business and affairs of the corporation.” 74 “The existence and exercise of this power carries with it certain fundamental fiduciary obligations to the corp oration and its shareholders.” 75 For directors, the duty of loyalty “mandates that the best interest of the corporation a nd its shareholders takes precedence over a ny i nterest possessed by a director... a nd not shared by the stockholders g enerally.” 76 Corporate fiduciaries 71 See id. (“The business and affairs of every corporation organized under thi s chapter shall be managed by or under the direction of a boa rd of directors, except as may be otherwise provided in this chapter . . . . ”). 72 See id. (“The business and affairs of ev ery corporation organized under this chapter shall be managed by or under the direction of a boa rd of directors, except as may be otherwise provided .. . i n its certificate of incorp oration. If a ny such provision is ma de in the certificate of incorporation, the powers a nd duties conferred or imposed upon the board of directors by thi s chapter shall b e exercised or performed to such extent and by su ch person o r persons as shall be provided in the certificate of incorporation.”). 73 See id. § 122(18). 74 Aronson, 473 A.2d at 811. 75 Id.; accord Pogostin v. Rice, 480 A.2d 619, 624 (Del. 1984), overruled in part on other grounds by Brehm, 746 A.2d 244. 76 Cede & Co. v. Technicolor, Inc., 634 A.2d 345, 361 (Del. 1993), modified on other grounds, 636 A.2d 956 (Del. 1994). When frami ng the standard, Del aware decisions, including Technicolor, state that the same duty of loyalty app lies to controlling stockholders, but a more detailed exa mination of the cases disconfirms that simplification. See In re S ears Home town & Outlet Stores, Inc. S’holder Li tig., 309 A.3d 474, 506 – 16 (Del. Ch. 2024); see generally J. Travis Laster, T he Distinctive Fiduciary Duties That Stockholder Controllers Owe, 20 N.Y.U. J.L. & Bus. 461 (2024).

36 “are not permitted to use their position of trust and confidence to further their private interests.” 77 For directors, to act loyally means “to promote the value of the corp oration for the benefit of its stockholder s.” 78 As a practical matter, that means to promote the value of the corporation for the benefit of the common stockholders in the aggregate. 79 That simpli fication holds because when stockholders enjoy special rights, powers, or preferences, tho se rig hts a re contractual, and corporate fiduciaries do not have a fiduciary duty to maximize the value of a counterparty’s c ontract rights. 80 77 Guth v. Loft, Inc., 5 A.2d 503, 510 (Del. 1939). 78 eBay Domestic Hldgs., Inc. v. Newmark, 16 A.3d 1, 3 4 (Del. Ch. 2010); accord N. Am. Cath. Educ. Programming Found., Inc. v. Gheewalla, 930 A.2d 92, 101 (Del. 2007) (“The directors of Delaware corporations have the legal responsibility to manage the business of a corporation for the benefit of its shareholder [] owners.” (internal quotation marks omitted)); Revlon, Inc. v. MacA ndrews & Forbes Hldgs., Inc., 506 A.2d 173, 1 82 (Del. 1986) (“A board may have regard for various constituencies in discharging its responsibilities, provided there are rationally related benefits accruing to the stockholders.”); U nocal Corp. v. Mesa Petroleum Co., 493 A.2d 946, 955 (Del. 1985) (“[O]ur analysis begins wi th the basic principle that corporate directors have a fiduciary duty to act in the best interests of the corporation’s stockholders.”); see also Leo E. Str ine, Jr., The Soviet Constitution Problem in Comparative Corporate Law: Testing the Proposition that Eu ropean Corporate Law is More Stockholder Focused than U.S. Corporate Law, 89 S. Cal. L. Rev. 1239, 1249 (201 6); (“[U]nder Delaware l aw ... directors are r eq uired to foc us on promoting stoc kholder welfare.”); Loyalty’s Core Demand, s upra, at 634 (“[I]t is essential that directors take their responsibilities seriously by actually trying to manage the corporation in a manner advantageous to the stockholders.”). 79 See Freder ick Hsu Living T r. v. ODN Hldg. Corp., 2017 WL 1437308, at *21 – 22 (Del. Ch. Apr. 14, 2017) (c ollecting authorities). 80 Id. (collecting a uthorities). Even when a subset of the stockholders enjoy s special rights, powers, a nd preferences, the re will be decisions that do not implicate those contractual rights. Id. (collecting authorities). In those cases, the directors mu st

37 The duty of loyalty includes a requi rement to act in good faith, which i s “ a subsidiary element, i.e., a condition, of the fundamental duty of loyal ty.” 81 Acting in good fai th requires that the director subjectively believes that the course of action is in the best interests of the corporation a nd its stockholders. 82 Stated conversely, a director acts in bad faith when the fiduciary “intentionally acts with a purpose other than that of a dvancing the best interests of the corp oration.” 83 “It makes no difference the reason why the director intentionally fails to pursue the b est interests of the corporation.” 84 Bad fait h can be the result of “any human emotion [that] may cause a seek to promote the value of the corpor ation for the benefit of all of its stockholders. Id. at *17. More technically, the duty of l oyalty requires that the directors seek to maximize the va lue of the corporation for the ulti mate benefit of “the undifferentiated equity as a collective, without regard to any special rights.” Id. 81 Stone v. Ritter, 911 A.2d 362, 370 (Del. 2006) (cleaned up). 82 See United Food & Com. Workers Union v. Zuckerberg, 250 A.3d 862, 895 (Del. Ch. 2020), aff’d, 262 A.3d 1034 (Del. 2021). 83 In re W alt Disney Co. Deriv. L itig. (Disney II), 90 6 A.2d 2 7, 67 (Del. 2 006) (quoting Dis ney I, 9 07 A.2d at 755); accor d Stone, 911 A.2d a t 369 (“A failure to a ct in good faith ma y be sho wn, for instance, where the fiduciary intentionally acts with a purpose other than that of adva ncing the best interests of the corporation....” (quoting Disney II, 906 A.2d a t 6 7)); see Gagliardi, 683 A.2d at 1051 n.2 (defining a “bad faith” transaction as one “that is authorized for some purpose other than a genuine attempt to adva nce cor porate welfare or is known to constitute a v iolation of applicable positive law”); In re RJR N abisco, Inc. S’holders Litig., 1989 WL 7 036, at *15 (Del. Ch. Jan. 31, 1989) (Allen, C.) (expla ining that the business judgment rule would not pr otect “a fiduc iary who could be shown to have caused a transaction to be effectuated (even one in wh ich he had no financial interest) for a reason unrelated to a pursuit of the corporation's best interests”). 84 Disney I, 907 A.2d at 754.

38 director to [intentionally] place his own inter ests, preferences or app etites before the welfare of the corporation,” including greed, “hatred, lust, envy, revenge,... shame or pride.” 85 A director can therefore be liable for action in bad faith if “shown to have caused a transaction to be effectuated (even one in which he had no financial interest) for a reason unrelated to a pursuit of the corporation’s best interests.” 86 Significantly for this case, fiduciary duties under Delaware law run to the firm’s stockholders as a whol e in thei r capacities as stockholders “and not in any other capacities they may have.” 87 Delaware decisions have consistently r ejected claims by stockholder plaintiffs who have a rgued tha t directors breached their duties by takin g action that harmed them in non-stockholder capacities. 88 85 RJR Nabisco, 1989 WL 7036, at *15; see Guttman v. Huang, 823 A.2d 492, 506 n.34 (Del. Ch. 2003) (Strine, V.C.) (“The reason for the disloyalty (the faithlessness) is irrelevant, the underlying motive (be it vena l, familial, collegial, or nihilistic) for conscious action not in the corpor ation’s best interest d oes not make i t faithful, as opposed to faithless.”). 86 RJR Nabisco, 1989 WL 7036, at *15; see Nagy v. Bistrice r, 770 A.2d 43, 48 n.2 (Del. Ch. 2000) (“[R]egardless of his motive, a director who consciously disr egards his duties to the corporation and its stockholders may suffer a personal judgment for monetary damages for any harm he c auses,” even if for a reason “ other than personal pecuniary interest.”). 87 McRitchie v. Zuckerberg, 315 A.3d 518, 539 (Del. Ch. 2024). 88 See id. at 548 – 51 (collecting authorities).

39 Nemec 89 a nd Riblet 90 i llustrate this principle. In Nemec, the board agreed to sell one of the corporation’s two business units for approximately $700 per share. Before the transaction closed, the board caused the corporation to exercise i ts right to redeem shares hel d by retirees at their book value of $162.46 per s hare. The redemption i ncreased the total amount of consideration av ailable for other stockholders by $60 mi llion. Two retirees sued, contending that the corporation breached the implied covenant of good faith and fair dealing by exercising the redemption right and that the directors brea ched the fiduciary duties they owed to the retirees as stockholders. After rejecting the implied covenant claim, the Delaware Supreme Court held that the directors did not owe any fiduciary duties to the retire es for purposes of the redemption. The r edemption right “was not one that attached to or d evolved upon a ll the Company’s common shares generally, irrespective of a contract.” 91 For purposes of the redemption right, therefore, the retirees were not part of the stockholder collective; they were contractual counterparties, and the directors did not have any fiduciary duty to consider their interests in that capacity. 92 89 Nemec, 991 A.2d 1120. 90 Riblet Prods. Corp. v. Nagy, 683 A.2d 37 (Del. 1996). 91 Nemec, 991 A.2d at 1129. 92 Under this line of reasoning, the justices could have hel d that the directors fulfilled their fiduciary duties by exercising the redemption right because it increased

40 The Delaware Supreme Court addressed a similar issue in Riblet. 93 There, three stockholders jointly controlled 85% of the common stock of a Delaware corporation. Ernest Nagy, the corporation’s CEO, owned the remaining 15%. At the behest of the majority stockholders, the corporation terminated Nagy for cause. Nagy disputed his termination and sued for breach of his employment a greement. Nagy also contended that by terminating him, the maj ority stockholders breached the fiduciary duties they owed him as a minority stockholder. The Delaware Supreme Court held tha t N agy could not a ssert a cl aim for breach of fiduciary duty based on his termina tion, because hi s contractual rights as a n employee were “separate from his rights as a stockholder.” 94 The Delaware Supreme Court acknowledged that the majority stockholders owed fiduciary duties to Nagy “as a mi nority stockholder,” but nothing about his allegations implicated the directors’ duties, which did not require considering Nagy’s interests as an employee. 95 Nemec and Riblet show that to act loyally, directors nee d not c onsider a stockholder’s other capacities. “D irectors can consider those other capacities if the directors subjectively believe doing so will enhance the value of the firm for its the total pool of consideration available to the common stockholders in the a ggregate. See McRitchie, 315 A.3d at 550 n.83. 93 Riblet Prod s. Corp., 683 A.2 d 37. 94 Id. at 40. 95 Id.

41 residual claimants, but those other capacities are not independently part of the fiduciary calculus.” 96 Applied to thi s case, the standard of conduct means that Mor ris, Einheiber, and Orleski had no duty to protect MacLaughl a n’s rights under the Oral Profits Agreement. To the extent MacLaughl an argues that Morris, Einheiber, and Orleski breached duties they owed to him by asserting the Diversion Claim and ta king steps to investigate it, those actions affected MacLaughlan a s a contractual counterpar ty. Directors do not owe fiduciary duties to contractual counterparties. If anything, asserting the Diversion Claim a nd taking steps to investigate i t fulfilled the standard of conduct. By pursuing the Diversion Claim, the directors sought to sec ure an asset —the 30 % interest in the Orphan Dru g’s profits— for the Company’s benefi t, thereby enhancing the value of the Company. U nder the standard of conduct, that theory does not state a claim on which relief can be granted. 2. Diversion Claim-Related Conduct And The Standard Of Review The other version of the Complaint’s theory about the Diversion Claim-related conduct fai ls because of the standard of review. When litigation a rises, directors are not judged by the standard of conduct but rather using a standard of review. 97 “Delaware has three tiers of review for evaluating director decision -making: the 96 McRitchie, 315 A.3d at 551. 97 Trados II, 73 A.3d at 35 – 36.

42 business judgment rule, enhanced scru tiny, and entire fairness.” 98 “In each manifestation, the standard of review is more forgivi ng of directors and more onerous for stockholder plaintiffs than the standard of conduct.” 99 Here, the business judgment rule applies and leads to the dismissal of Count I. The business judgment rule is Delaware’s default standard of review. The rule presumes that “in making a b usiness decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the c ompany.” 100 Unless a p laintiff rebuts one of those elements, “the court merely looks to see whether the business decision made was rational in the sense of being one logical approach to advancing the corporation’s objecti ves.” 101 Only when a decision lacks any rationally conceivable basis will a court i nfer ba d faith a nd a breach of duty. 102 The business judgment rule thus provides “something as close to 98 Reis v. Hazelett S trip – Casting Corp., 28 A.3d 442, 457 (Del. Ch. 2011). Delaware’s intermediate standard of review — enhanced scrutiny — is not i mplicated by this case. 99 Chen, 87 A.3d at 667. 100 Aronson, 473 A.2d at 812. 101 In re Dollar Thrifty S’holder Litig., 14 A.3d 573, 598 (Del. Ch. 2010). 102 See Brehm, 746 A.2d at 264 (“Irrationality i s the outer limit of the business judgment rule. Irrationality may be the functional equivalent of the waste test or it may tend to show that the decision is not made in good faith, which is a key ingredient of the busine ss judgment rule.” (f ootnote omitted)); In re J.P. Steve ns & Co., S’hol ders Litig., 5 42 A.2d 770, 780 –81 (Del. Ch. 1988) (Allen, C.) (“A court may, however, review the substance of a business decision made by an apparently well motivated board for the limited purpose of assessing whether that decision is so far be yond the bounds of

43 non- review as our l aw contemplates.” 103 This standard of review “reflects and promotes the role of the board of directors as the proper b ody to mana ge the business and affairs of the corporation.” 104 Enhanced s crutiny i s Delaware’s intermediate standard of review. 105 Enhanced sc rutiny applies to specific, recurring, and readily identifiable situations marked by two features. Fi rst, there is a distinct decision -making context where the realities of the situation can su btly und ermine the decisions of even independent an d disinterested fiduciaries. 106 Second, the decision under review involves the directors intruding into a space where sto ckholders po ssess rights of their own. 107 The reasonable judgment that it seems ess entially inexplicable on an y ground other than bad faith.”). 103 Kallick v. Sandridge Ener gy, Inc., 6 8 A.3d 242, 257 (Del. Ch. 2013). 104 In re Trados Inc. S’holder Litig. (Trados I), 2009 WL 2225958, at *6 (Del. Ch. July 24, 2009). 105 Firefighters’ Pension Sys. of City of Kan. City, Mo. T r. v. P residio, Inc., 251 A.3d 212, 249 (Del. Ch. 2021). 106 Trados II, 73 A.3d at 43. 107 See In re Columbia Pipeline Gp., Inc. Merger Litig., 29 9 A.3d 393, 4 58 – 59 (Del. Ch. 2023) (examining enhanced scrutiny preced ents and demonstrating how they fit this pattern), rev’d on other grounds, 342 A.3d 324 (Del. 2025). The second criterion — areas where stockholders have rights of their own — explains wh y enhance d scr utiny does not apply to CEO compensation decisions, even though the situational dynamics surrounding CEO compensati on might otherwise raise sufficient concerns. S ee Jae Yoon, Corporate Waste Crossing The Rubicon: The Case For Executive Compensation Award Enhanced Scrutiny A pplied Review, 7 Corp. & Bus. L.J. 149, 188 – 89 (20 26) (arguing that CEO compensation presents a recurring scenario involving situational press ures that can undermine the decisions of even disinterested and independent directors); see a lso Lucian Bebchuk & Jesse Fried, Pay

44 directors’ exercise of corporate power therefore raises q uestions about the allocation of authority wi thin the entity and, from a theoretical perspective, implicates the principal-agent pr oblem. 108 The resulting scenarios call for an intermed iate standard Without Performance: The Unfulfilled Promise of Executive Compensation 2, 37 – 3 9 (2004) (describing i nformational disparities that outside directors confront when making compensation decisions), cited in Disney I, 907 A.2d at 699 n.1; Lisa M. Fairfax, Sue on Pay: Say on Pay ’ s Impact on Directors ’ Fiduciary Duties, 55 Ariz. L. Rev. 1, 17 (2013) (describing the dominant academic framework for unde rstanding executive compensation, which recognizes that “directors are too often a t an informational disadvantage when assessing and approving compensation packages,” and “[a] s a result, they defer to ex ecutives or other corporation managers who may have more expertise and experience”); Michael B. Dorff, Does One Hand Wash the Other? Testing the Manager ial Power and Optimal Contracting Theor ies of Executive Compensation, 30 J. Corp. L. 255, 261, 266 – 67 (2005) (describing the “ Manageria l Power Hyp othesis ” as i ncluding the cl aim that “directors who wish to question management, despite [other] contrary incentives, have limited resources with which to do so” a nd finding that the results of the article ’s analysis “strongly support the Managerial Power Hypothes is, that the existence of managerial power over directors erodes directors ’ ability to restrain managers from pursuing thei r own interests at the corporation ’s expe nse”); L ucian Arye Be bchuk, Jesse M. Fr ied & David I. Walker, Managerial P ower and Rent Extraction in t he Design of Executive Compensation, 69 U. Chi. L. Rev. 751, 766 (2002) (discussing problems that independent directors face when overseeing insiders ’ compensation and performance, including that “even if directors were otherwise inclined to challenge managers on th e issue of executive compensation, they would l ikely have neit her the financial incentive nor sufficient information to d o so”); id. at 772 (“[E]ven if directors have the inclination an d incentive to negotiate for CEO com pensation that maximizes shareholder value, they will usually l ack the information to do s o effectively. The CEO, by way of his personnel department, controls much of the information that reaches the committee.”). 108 To b e clear, directors and officers are not agents of the stockholders, nor a re the stockholders their principals. “A board of directors, in fulfilling its fiduciary duty, controls the corporation, not vice versa. It would be a n analytica l anomaly, ther efore, to treat corporate directors as agents of the corporation when they are acting as fiduciaries of the stockholders in managing the business and affairs of the corporation.” Arnold v. Soc’y for Sav. Bancorp., Inc., 678 A.2d 533, 54 0 (Del. 1996) (footnote omitted); s ee also Presidio, 251 A.3d at 286 (“Rather than treating directors as a gents of the stockholders, Delaware law has long treated directors as a nalogous

45 of review that examines “the reasonableness of the end that the directors cho se to pursue, the path that they took to get there, and the fit between the means and the end.” 109 Delaware’s most onerous standard of review is the entire fairness test. When entire fairness governs, the defendants must establish “to the court’s satisfaction that the transaction wa s the product of b oth fair deal ing and fair price.” 110 “Not even an honest belief that the transaction wa s entirely fair will be sufficient to estab lish entire fairness. ” 111 “ Rather, the transaction itself must be objectively fair, independent of the board’s beliefs.” 112 If a claim does not identify any of the recurring scenarios tha t could implicate enhanced sc rutiny, then the business judgment rule pr esumptively applies. At the pleading stage, to change the standard of revi ew from the business judgment rule to entire fairness, the complaint must allege facts supporting a reasonable inference that the directors who approved the challenged action did not include independent and disinteres ted directors, acting carefu lly a nd in good faith, with enough voti ng to trustees for the stockholders.”). The principal -agent problem uses the la nguage of economic theory, not the language of legal relationships. 109 Obeid v. Hogan, 2016 WL 3356851, at *13 (Del. Ch. June 10, 2016). 110 Cinerama, Inc. v. Technicolor, Inc., (Technicolor Plenary), 663 A.2d 1156, 1163 (Del. 1995) (internal quotation marks omitted). 111 Gesoff v. IIC Indus., Inc., 902 A.2d 1130, 1145 (Del. Ch. 2006). 112 Id.

46 power by themselves to deliver a majority. 113 Consequently, to determine whether to intensify the standard of review from business j udgment to entire fairness, a court conducts a director- by -director analysis. 114 If that a nalysis reduces the uncompromised director vote count below a majority, then the standard of review elevates to entire fairness. To plead that a director was interested and therefore cannot count toward the requisite majority, a plaintiff can allege facts showing that the director received “a personal financial benefit from a transaction that is not eq ually shared by th e 113 See Aronson, 473 A.2d at 8 12 (noting that if “the transaction i s not approved by a majority consisting of the disinterested directors, then the b usiness judgment rule has no a pplication”). The voting power formulation is necess ary because the Delaware General Corporation Law authorizes a charter to grant some directors greater voting rights. 8 Del. C. § 141(d); see Marcha nd v. Barnhill, 212 A.3d 805, 815 (Del. 2019) (evaluating demand futility w here one director exercised multiple votes). Independent a nd disinterested directors who acted with due care and in good faith may therefore deliver a majority of the director voting power, even if they do not constitute a majority of the humans on the board. Under thi s standard, if the votes are evenly divided between compromised and uncompromised directors, then the plaintiff has succeeded in rebutting the business judgment rule. See Gentile v. Rossette, 2010 WL 2171613, at *7 n.36 (Del. Ch. May 28, 2010) (“A board that is evenly divided b etween conflicted and non -conflicted members is not considered independent and disinterested.”); see also Beam v. Stewart, 845 A.2d 10 40, 10 46 n.8 (Del. 2004) (noti ng for demand futility purposes that a b oard evenly divided between interested and disinterested directors could not exercise business judgment on a demand); Beneville v. York, 7 69 A.2d 80, 85 (Del. Ch. 2000). 114 See Cede, 634 A.2d at 361, 364 (requiring director- by -director analysis); Disney II, 906 A.2d at 52 (affirming director- by -director analysis).

47 stockholders.” 115 Or a plaintiff can a llege facts showi ng tha t the director wa s a dual fiduciary and owed a competing duty of loyal ty to a n entity that itself stood on the other side of the transaction or received a unique benefit not shared with the stockholders. 116 To plead tha t a director lacked i ndependence and therefore cannot count toward the req uisite board majority, a plai ntiff can plead facts s howing a director is sufficiently loyal to, b eholden to, or otherwise influenced by an interested party to undermine the director’s ability to judge the matter on its merits. 117 115 Rales, 634 A.2 d at 936; accord Cede, 634 A.2d at 362 (“Classic examples of director self-interest in a business transaction involve either a director appearing on both sides of a transaction or a director receiving a personal benefit from a transaction not received by the shareholders gener a lly.”); Pog ostin, 480 A.2d at 624 (“Directorial interest exists whenever . . . a director either has received, or is enti tled to receive, a personal financial benefit from the challenged transaction which is not equally shared by the stockholders.”). “[A] subjective ‘actua l person’ standard [is used] to determine whether a ‘gi ven’ director was l ikely to be a ffected in the same or simila r circumstances.” McMullin v. Beran, 765 A.2d 910, 923 (Del. 2000) (quoting Technicolor Plenary, 663 A.2d at 1167). “[T]he benefit received by the director and not shared with stockholders must be ‘of a sufficiently material i mportance, in the context of the director’s economic circumsta nces, as to have made it improbable that the director could per form her fiduciary duties... without being influenced by her overriding personal interest.’” T rados I, 2009 WL 2225958, at *6 (quoting In re Gen. Motors Class H S’holders Litig., 734 A.2d 611, 617 (Del. Ch. 1999)). 116 See Weinberger v. U OP, Inc., 457 A.2 d 701, 710 – 11 (Del. 1983) (h olding that officers of parent corporation faced confli ct of interest when acting as subsidiary directors regarding transaction with parent); accord Sealy Mattress Co. of N.J., Inc. v. Sealy, Inc., 532 A.2d 1324, 1336 – 38 (Del. Ch. 1987) (same); see al so Trados I, 2009 WL 2225958, at *8 (treating directors as interested for pleading purposes in transaction that benefited preferred stockholders when “each had an ownership or employment relationship with an entity that owned Trados preferred stock”). 117 Aronson, 473 A.2d at 815 (stating that one wa y to allege successfully that an individual director is under the control of another is b y pleading “such facts as would demonstrate that through personal or other relationships the directors are beholden to the contro lling person”); F riedman v. Beningson, 1995 WL 716762, at *4

48 A plaintiff also may chall enge a director’s decision by all eging facts that call into question whether the director acted in good faith. De laware l aw “clearly permits a judicial assessment of director good faith” for the purp ose of rebutting the b usiness judgment rule. 118 (Del. Ch. Dec. 4, 1995) (Allen, C.) (“The requirement that directors exercise independent judgment, (insofar as it is a distinct prerequisite to business judgment review from a requirement that directors exerc ise financially disinterested judgment), directs a court to an inquiry into all of the circumstances tha t are all eged to have inappropriately affected the ex ercise of board power. This inquiry may i nclude the subject whether some or all directors are ‘beholden’ to or under the control, domination or strong influence of a party wi th a ma terial financial interest in the transaction under attack, which interest is a dverse to that of the corporation.”). Classic examples i nvolve familial relationships, such as a parent’s l ove for and loyalty to a chil d. See, e.g., Harbor Fin. P ’rs v. Hui zenga, 75 1 A.2 d 879, 889 (Del. Ch. 1999) (“That Hudson also happens to be Huizeng a’s brother - in -law makes me incredulous about Hudson’s impartiality. Close familial relationships between directors can create a reasonable doubt a s to impartiality. The plaintiff bears no burden to plead facts demonstrating that directors who are closely related have no history of discord or enmity that rend ers the natural inferenc e of mutua l loyalty and affection unreasonable.” (footnote omi tted)); Chaffin v. GN I Gp. Inc., 1999 WL 721569, at *5 (Del. Ch. Sep. 3, 1 999) (holding father-s on relationship was sufficient to rebut presumption of i ndependenc e) (“Inhe rent in the parental relationship is the parent’s natural desire to help hi s or her child succeed.... [M]ost parents would find it highly difficult, if not impossible, to m aintain a co mpletely neutral, disinterested positi on on an issue, where his or her own child would benefit substantia lly i f the p arent decides the i ssue a certain way.”); see also London v. Tyrrell, 20 10 WL 87 7528, at *14 n.60 (Del. Ch. Mar. 11, 2010) (“[I]n the pre -suit demand context, plaintiffs can often meet their burden of establishing a lack of independence with a simple allegation of a familial relat ionship. Surely then. .. it will be nigh unto impossible for a corporation bearing the burden of proof to demonstrate that an SLC member is independent in the face of plaintiffs’ all egation that the SLC member and a director defendant have a family relationship.”). 118 Disney II, 906 A.2d at 53; accord eBa y, 16 A.3d at 40.

49 The Complaint’s allegations about Diversion Claim-related conduct do not implicate enhanced scrutiny, so the business judgment rule presumptively applies. The Complaint’s allegations about Diversion Claim-related conduct fai l to rebut any of the business judgment rule ’s presumptions and therefore d o not trigger entire fairness. Because the business judgment rule governs, the Di version Cl aim-related aspects of Count I are dismissed. a. Einheiber MacLaughlan seeks to rebut the business judgment rule for purposes of decisions relating to the Diversion Claim by asserting that Einheiber is a conflicted dual fiduciary. MacLaughlan also argues that the Diversion Claim is so meritless that Einheiber is inferably pursuing the claim in bad faith. The dual fiduciary theor y fails because ther e i s no conflict between Einheiber’s dual roles. Einheiber is the CFO of Parent. In that capacity, Einheiber owes fiduciary duties to Parent. In the l andmark Weinber ger decision, the Delaware Supreme Court held that there is “no dilution” of the duty of loyalty when a director “holds dual or multiple” fiduciary ro les. 119 “If the interests of the beneficiaries to whom the dual fiduciary owes duties are aligned, then there is no conflict.” 120 But if the interests of 119 457 A.2d at 710. 120 Trados II, 73 A.3d at 46 – 47; see Van de Walle v. Unimation, Inc., 1991 WL 29303, at *11 (Del. Ch. Mar. 7, 1991).

50 the beneficiaries diver ge, the fiduciary faces an inherent conflict of i nterest. “There is no ‘safe harbor’ for such divided loyalties in Delaware.” 121 The Complai nt alleges that because of her dual roles, Einheiber fac es a conflict between doing what is best for the Company and doing wha t is b est for Parent. But the Complaint’s al legations fail to support a reasonabl e inference of misal ignment. The Diversion Claim seeks to recover an asset for the Company. Parent is a stockholder of the Co mpany. Parent does not hav e any competing interest i n the Company. Parent is not on the other side of the Diversion Cla im. Parent does not stand to receive a non-ratable benefit from the Diversion Claim. To create a conflict of interest, the Complaint alleges that Einheiber asserted the Di version Claim in ba d faith to coerce MacLaughl an i nto agreeing to redeem Parent’s shares for $4.5 million. That allegation does not su ppor t a reasonably conceivable i nference of bad faith. Einheibe r and Orl eski already comprise a majority of the Board. They do not need MacLaughl an ’s support to cause the Company to take action. Nor would it make sense to trade the Di version Claim for a redemption. T he Diversion Claim is inf erably worth around $1 6.8 million (30% of $56 m illion). In light of its stock ownership, Parent i s i ndirectly entitl ed to approximately 32.57% of that value, or around $ 5.5 milli on. Morris allegedly wants the Preferred Stock redeemed for $4.5 million. Why would Parent g ive up $ 5.5 million — plus its share of the Orphan 121 Weinberger, 457 A.2d at 710.

51 Drug profits goi ng forward and its liquidation preference — to get $4.5 million? MacLaughlan offers no answer. MacLaughlan suggests that Einheiber is inferably acting in bad faith and wasting the Company’s assets b ecause the Diversion Claim i s wholly baseless. 122 He argues that under t he Governance Agreement, the Company could not have “enter[ed] new lines of business” 123 — such as developing the Orphan Drug — wi thout Board approval. He al so alleg es that the Diversion Claim is time-barred. He maintains that because the Diversion Claim is baseless, incurring expenses to pursue it can only harm the Company. The Complai nt’s allegations, however, do not suggest that the Diversion Claim is baseless. The y suggest that the Diversion Claim is fairly litigable, although MacLaughlan may have valid defenses. The factual and legal bona fides of the “ Morris-approved- it ” defense a re contestable. The statute of l imitations defense is not 122 MacLaughlan a pproaches bad faith and waste as different things. “Although waste historically was viewed as a type of ul tra vires act that was beyond a fiduciary ’ s power to take, contemporary Delaware authorities have integrated the concept into the business j udgment rule as a mea ns of pleading bad faith.” IBEW Loc. Union 481 Define d Contribution Plan & Tr. v. Winborne, 301 A.3 d 596, 622 (Del. Ch. 2023); see In re McDonald ’s Corp. S’holder Deriv. Litig., 291 A.3d 652, 693 – 94 (Del. Ch. 2023) (collecting cases). “Pleading that a transaction is so extreme as to suggest waste is thus one way to plead b ad faith, but not the only way.” Winborne, 301 A.3d at 622. “While every act of waste supports an inference of bad faith, every a ct committed in bad fai th does not necessarily constitute waste.” F rederick Hsu Living Tr., 2 017 WL 1437 308, at *42. This decision refers to bad faith with the understanding that it encompasses the concept of waste. 123 Ex. B § 3.

52 so obvious tha t investigating the Diversion Claim i s inferably wasteful. The Complaint does not support an i nference t hat asserting the Diversion Claim is so extreme an act as to constitute bad faith. b. Orleski As with Einheiber, MacLaughlan seeks to rebut the business judgment rule for purposes of conduct relating to the Diversion Claim by asserting that Orleski is a conflicted dual fiduciary. MacLaughlan again suggests that the D iversion Cla im is so meritless that Orleski is inferably pur suing the claim i n bad fa ith. Those theories again fail. The dual-fiduciary th eory falls shor t again for want of a conflicted beneficiary. Orleski serves as Vice P resident and General Counsel of Pharmascience. The Complaint alleges that Mor ris controls Parent, and Parent i n turn controls Pharmascience. The Complaint contends tha t Orleski therefore faces a conflict between doing what i s best for the Company and doing what is best for Pharmascience and Parent. But for the same reason that Parent does not have a conflict for purposes of Einheiber, Parent does not have a confl ict for purpose s of Orleski. T he Complaint also does not support an in ference that Orleski acted in bad faith or committed waste by pursuing the Diversion Claim. The analysis is the same as for Einheiber.

53 3. Diversion Claim-Related Conduct And Morris The Complaint alleges that Morris acted disloyally by engaging in conduct related to the Diversion Claim, but the Complaint is not terr ibly clear about what he did as a director as opposed to as a controlling stockholder. Reading the Complaint broadly, there does not appear to be a viable claim against Morris in his capacity as a director. The only act that Morris seems to have tak en in his capacity as a director was coming up with the plan to pursue the Diversion Claim. MacLaughlan claims that Morris acted disloyally because he envisioned using the Diversion Claim to bully MacLaughlan into redeeming Parent’s Preferred Stock. Tha t i s a variant of the attack on Einheiber and Orleski, and it fails for the same reasons. The atta ck on Morris for coming up with the plan to pursue the Diversion Claim also fails because it would implicate a corporate version of thought-crime. Co ming up with a plan is not actionab le. A director must do something, either by taking action or engaging in conscious inaction. 124 124 For breaches of fiduciary duty, Del aware law equates the two. See, e.g., Aronson, 473 A.2d at 81 3 (“[A] conscious decision to refrain from acting may nonetheless be a valid exercise of business j udgment and enjoy the pr otections of the rule.”); Quadrant Structured P rods. Co., Ltd. v. Vertin, 1 02 A.3d 155, 183 (Del. Ch. 2014) (“The Compla int alleges that the Board had the ability to defer interest payments on the Junior Notes, that the Junior Notes would not receive anything in an orderly liquidation, that [Defendant] owned all of the Junior Notes, and that the Board decided not to defer payi ng interest o n the J unior Notes to benefit [Defendant].... A decision to act and a conscious decision not to act are... equally subject to review under traditional fiduciary duty princ iples.”); Hubbard v. Hollywood Park Realty Enters., Inc., 1991 WL 3151, at *10 (Del. Ch. Jan. 14, 1991) (“[T]he case - by - case development of the la w governing fiduciary obligations... cannot be constrained

54 The Comp laint also alleges that M orris abdicated his d uties as a director until he became i nterested in using the Diversion Clai m to force a buyout of Parent’s shares. The Complaint offers no details in supp ort of the abdication theory. It is wholly conclusory and fails on that basis. Rather than identifying acts Morris took as a director, the Com plaint targets actions he took as a stockholder. He caused Pa rent to make a request for books and records. He later caused Parent to remove h imself and his colleague as direc tors and replace them w ith Einheiber a nd Orleski. And after leaving the Board, he caused Parent’s CEO to tell Jonathan not to talk to MacLaughl an, torpedoing the Company’s efforts to renew the Orphan Drug Agreement. Morris did not enga ge in those activities as a director. Except for causing Parent to serve a books and records demand, he took those actions after leavi ng the Board. The Complaint does not support an inference that Morris breached his fiduciary duties as a director. C. The Claim Based On The Dissolution Resolution MacLaughlan also asserts that the directors breached their fiduci ary duties by failing to abi de by the Di ssolution Resolution. The Complaint does not support a reasonable inference that Orleski and Einheiber face a conflict of i nterest regarding dissolution. The Complaint also does not support an inference that proposing to by so facil e a distinction. F rom a semantic and ev en legal viewpoint, ‘ina ction’ and ‘action’ may be substantive equivalents, differ ent only in form.”).

55 condition d issolution on the r esults of the Committee’s investigat ion is so extreme an act as to support an inference of bad faith. MacLaughlan contends tha t Orleski and Einheiber have refused to comply with the Dissolution Resolution or otherwise vote to dissolve the Company b ecause they want to use the Diversion Claim a s leverage against him. This is the same theory that under lies MacL aughl an’s allegations about the Di version Claim-related cond uct itself, and it fails for the same reasons. MacLaughlan also suggests that by failing to comply with the Dissolution Resolution, Orleski and Einheiber acted in bad faith by intending to v iolate applicable positive la w or b y failing to act in the face of a known duty to a ct. 125 There are three paths for triggering dissolution und er Delaware l aw. The first involves a board resolution passed “by a majority of the whole board” foll owed by a stockholder vote by a maj ority of the outstanding voting power. 126 The second invol ves unanimous stockholder approval. 127 The third applies to a corporation with a limited lifespan. 128 If one of those paths is followed, then a certificate of dissolution must be filed. 129 125 See Disney II, 906 A.2d at 67. 126 See 8 Del. C. § 275(a) & (b). 127 Id. § 275(c). 128 Id. § 275(f). 129 Id. § 275(b), (c) & (f).

56 A boa rd of direc tors that failed to comply wi th the mandatory requirement to file a certificate of dis solution conceivably could breach its duty of loyalty by failing to act in good faith. A complaint that sufficiently alleges bad faith at the pleading stage rebuts the business judgment rule a nd states a claim on which relief can be granted. 130 The Complaint does not allege facts supporting a concei vable i nference that any of the prerequisites for mandatory dissolution were followed. It appears undisputed that they were not. MacLaughlan’s theories related to dissolution i n particular and the Dissolution Resolution in general do not support a claim on which relief can be granted. D. Counts I and III Are Dismissed. Counts I and III both rest on the same allegations about the same underlying conduct. Those allegations fail to support a claim that any of the directors b reached their fiduciary duties. Both Counts I and III are therefore dismissed. IV. MORRIS’S RULE 12(B)(2) MOTION Having disposed of the claims against Morris as a director, this decision can now return to Morris’s moti on for dismissal under Rule 12(b)(2). The Complaint asserts cla ims against Morris in four capacities: as a director, controlling stockholder, conspirator, a nd tortious interferer. Morris contends that this court cannot exercise personal jurisdiction over him other than as a director. The answer depends on 130 Disney II, 9 06 A.2d a t 52 (explaining that business judgment rule’s presumptions “can be rebutted if the plaintiff shows that the directors breached their fiduciary duty of care or of loyalty or acted in bad faith”).

57 whether the Complaint states a viable claim against him in his capacity as a director. Because i t does not, the court c annot assert person al jurisdiction over him in his non- director capacities. Recall that MacLaughlan relies on the Director Consent Statute to assert personal jurisdiction over Morris. Under t hat statute, Morris’s service as a director both provides a basis for the assertion of personal j urisdiction and satisfies due process for claims relating to his service as a director. 131 For the Director Consent Statute to supply jurisdiction for claims against Morris i n a non- director capacity, the Complai nt must state a viable claim a gainst Morris as a director, and the claims against Mor ris in his non-director capacity mus t relate to the claim over which jurisdiction exists. “[O]nce a val id claim has been brought and personal jurisdiction established over a party defending a proper claim,. . . Delaware courts are justified i n asserting personal jurisdiction over the defending party where the subject matter of the claim i s sufficiently related to the plaintiff ’ s independent claims.” 132 “Delaware public policy favors Delaware courts assuming 131 See Armstrong v. P omerance, 423 A.2d 174, 175 – 76 (Del. 1980); HMG/Courtland Props., Inc. v. Gray, 729 A.2d 300, 306 (Del. Ch. 1999). 132 Fitzgerald v. Chandler, 1999 WL 1022065, at *4 (Del. Ch. Oct. 14, 1999) (internal quotation marks omitted); see SPay, Inc. v. Stack Media Inc., 2021 WL 6053869, at * 4 –5 (Del. Ch. Dec. 21, 2021) (e xercising jurisdiction because “claims are sufficiently rela ted for personal jurisdiction purposes”); Canadian Com. Workers Indus. Pension Plan v. Alden, 2006 WL 456786, at *11 – 12 (Del. Ch. F eb. 22, 2 006) (exercising jurisdiction where claims “depend on a number of the same facts”). See generally Harris, 289 A.3d at 297 – 98.

58 personal jurisdiction over parties in order to adjudicate claims which sufficiently relate to other claims which do properly bring the party withi n those courts’ jurisdiction.” 133 Without a viable claim that properly suppli es a basis for this court to assert jurisdiction, however, ancilla ry j urisdiction does not exist. Put differently, a party cannot assert a non-meritorious claim against a director and rely on the Director Consent Statute to supply jurisdiction over meritorious claims. The Complaint fails to state a meritorious claim against Morris as a director. The court therefore cannot exercise jurisdiction ov er Morris for purposes of the claims against him as a controlling stockholder, consp irator, or tortious interferer. Those claims are dismissed for lack of jurisdiction over Morr is in those capacities. V. THE CONSPIRACY CLAIM Count IV ass erts that if any of the defendants were not themselves fiduciaries when they acted, then they consp ired with any of the defendants who were fiduciaries to commit a fiduciary breach. Orl eski and Einheiber were fiduciaries, not conspirators, and the Complaint does not plead a fiduciary breach. The court can only exercise jurisdiction over Morris as a director. The court cannot adjudicate claims against him as a conspirator. T he court simil arly cannot exercise jurisdiction over Parent for purposes of a conspiracy claim. Count IV is therefore dismissed. 133 Fitzgerald, 1999 WL 1022065, at *4; a ccord SPay, 2021 WL 6053869, at *5.

59 VI. THE TORTIOUS INTERFERENCE CLAIM Count V asserts that Morris a nd Parent tortiously interfered with the Company’s rights under the Orphan Drug Agreement. The court cannot exercise personal j urisdiction over Morris or Parent f or purposes of th at cl aim. It is dismissed. VII. THE DECLARATORY JUDGMENT The foregoing analysis l eaves only Count II, which seeks a declaratory judgment that MacLaughlan possesses a right to 30% of the profits from the Orphan Drug under the Oral Profits Agreement. T hat count states a claim on which relief can be granted. The defendants’ only argument for dismissing Count II contends that the Complaint names the wrong parties. To issue a declaratory judgment, there must be an actual controversy meeting the following prer equisites: (1) It must be a controversy involving the rights or other legal relati ons of the party seeking declaratory relief; (2) it must be a controversy i n which the claim of right or other legal interest is asserted aga inst one who has an interest in contesting the claim; (3) the c ontroversy must be between parties whose interests are real and a dverse; and the issue involved in the controversy must be ripe for judicial determination. 134 The defendants contend that none of them have any interest in the net sales of the Orphan Drug under either the Orphan Drug Agreement or the Oral Profits 134 Gannett Co. v. Bd. of Managers of the Del. Crim. Just. Info. Sys., 840 A.2d 1232, 1237 (Del. 2003) (internal quotation marks omitted).

60 Agreement, and hence the claim has not been asserted “against one who has an interest in contesting that claim.” 135 That argument initially sounds good as to the i ndividual defendants and Parent, because none of them claim to be parties to the Orphan Drug Agreement or the Oral Profits Agreement. But it does not work for the Company, which at a minimum is a party to the Orphan Drug Agreement and receives all of the sales revenue for the Orphan Drug in the first instance. The d efendants point out that the Complaint currently names the Company only as a nominal defendan t, but the Company has joined in the defendants’ motion s as if it were an active litigant. The defendants al so contend tha t none of them have made any cla im to net sales under the Orphan Drug Agreement. That al so is technically true, but Morris, Einheiber, and Orl eski have all taken the position that the Company — rather than MacLaughlan —has the right to receive the 30% of the Orphan Drug’s profits not destined for Knight. They thus have asserted the Diversion Cla im, albeit on the Company’s behalf. The Company has an obvious interest in contesting MacLaughlan’s claim. So do the individual defendants and Parent, a ll of whom have asserted the Diversion Claim. The defendants also argue tha t MacLaughlan must sue Knight to a djudicate his rig hts under the Orphan Drug Agreement. That does not follow. The Orphan Drug 135 Id. (internal quotation marks omitted).

61 Agreement i s between the Company and Knight. It calls for Knight to receive a payment equal to the greater of Kni ght’s actual cost of goods plus 10% or “seventy percent (70%) of Net Sales less allowances for Non -Conforming Product or expired Product.” 136 The Orphan Drug Agreement does not govern what happens to the amounts the Company generates under that a greement. Any rights that MacLaughlan has under the Oral Profits Agreement are between MacLaughlan and the Company, not between MacLaughlan a nd Knight. Knight i s not a necessary party. Count II is d ismissed as to the individual defen dants and Parent. Count II c an proceed against the Company — not as a nomi nal defendant but as an actual defendant. The court could dismiss the Complaint in its entirety with leave for MacLaughlan to file a new action against th e Company, but that course of action has little to commend it other than generating another filing fee for th e court. 137 VIII. CONCLUSIO N Parent’s motion to dismiss under Rule 12(b)(2) is granted. Morris’s moti on to dismiss under Rule 12(b)(2) is granted a s to all claims against him i n his capacities as a controlling stockholder, conspirator, or tortious interferer. Count IV is dismissed without prejudice. Counts I, III, and V a re dismissed without prejudice to the extent 136 Ex. D § 5.2. 137 N agy, 770 A.2d at 58 (“I fail to see any basis i n law for exacting an additional filing fee from Nagy when no fathomable justification exists for requiring the filing of a new pleading with a separate civil action number.”).

62 they assert claims against P arent or Morris in his capacities as a controlling stockholder, conspirator, or tortious interferer. Counts I, III, and V are dismissed with prejudice to the extent they assert claims against Orleski or Einheiber or against Morris i n his capacity as a director. The case will proceed o nly as to Count II. Because of the significant changes in the nature a nd scope of this a ction, MacLaughlan must file a second amended complaint wi thin thirty days that names the Company as a merits defendant.