Title: Steam TV Networks, Inc. v. SeeCubic, Inc.

State: delaware

Issuer: Delaware Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
STREAM TV NETWORKS, INC., 
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§ 
No. 360, 2021 
 
Plaintiff Below, Appellant,  
§ 
 
 
 
 
 
 
§ 
Court Below:  Court of Chancery 
 
v.  
 
 
 
 
§ 
of the State of Delaware 
 
 
 
 
 
 
§ 
SEECUBIC, INC.,  
 
 
§ 
C.A. No. 2020-0766 
 
 
 
 
 
 
§ 
 
 
Defendant Below, Appellee,  
§ 
 
 
 
 
 
 
§ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SEECUBIC, INC.,  
 
 
§ 
 
 
 
 
 
 
§ 
 
Counterclaimant and Third-Party § 
 
Plaintiff Below, Appellee,   
§ 
 
 
 
 
 
 
§ 
 
v.  
 
 
 
 
§ 
 
 
 
 
 
 
§ 
STREAM TV NETWORKS, INC., 
§ 
 
 
 
 
 
 
§ 
 
Counterclaim Defendant Below, § 
 
Appellant, 
 
 
 
§ 
 
 
 
 
 
 
§ 
 
and 
 
 
 
 
§ 
 
 
 
 
 
 
§ 
MATHU RAJAN and RAJA RAJAN, 
§ 
 
 
 
 
 
 
§ 
 
Third-Party Defendants Below, 
§ 
 
Appellants.  
 
 
§ 
 
Submitted:  April 6, 2022 
Decided:  June 15, 2022 
 
Before 
SEITZ, 
Chief 
Justice; 
VALIHURA, 
VAUGHN, 
TRAYNOR, 
and 
MONTGOMERY-REEVES, Justices, constituting the Court en Banc.  
 
Upon appeal from the Court of Chancery.  VACATED, REVERSED and REMANDED.  
 
2 
 
Andrew S. Dupre, Esquire (argued), Brian R. Lemon, Esquire, Steven P. Wood, Esquire, 
Sarah E. Delia, Esquire, Stephanie H. Dallaire, Esquire of McCarter & English, LLP, 
Wilmington, Delaware for Appellants.  
 
Robert S. Saunders, Esquire, Jenness E. Parker, Esquire (argued), Bonnie W. David, 
Esquire, Lilianna Anh P. Townsend, Esquire, Trevor T. Nielson, Esquire of Skadden, Arps, 
Slate, Meagher & Flom LLP, Wilmington, Delaware.  Of Counsel:  Eben P. Colby, Esquire, 
Marley Ann Brumme, Esquire of Skadden, Arps, Slate, Meagher & Flom LLP, Boston, 
Massachusetts for Appellee.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
VALIHURA, Justice: 
3 
 
 
We address whether approval of a corporation’s Class B stockholders was required 
to transfer pledged assets to secured creditors in connection with what was, in essence, a 
privately structured foreclosure transaction.  Stream TV Network, Inc. (“Stream” or the 
“Company”), along with Mathu and Raja Rajan,1 argue that the agreement authorizing the 
secured creditors to transfer Stream’s pledged assets (the “Omnibus Agreement”) is invalid 
because Stream’s unambiguous certificate of incorporation (the “Charter”) required the 
approval of Stream’s Class B stockholders.  Stream’s Charter requires a majority vote of 
Class B stockholders for any “sale, lease or other disposition of all or substantially all of 
the assets or intellectual property of the company.”  Stream argues that the court erred by 
applying a common law insolvency exception to Section 271 in interpreting the Charter, 
and that the enactment of 8 Del. C. § 271 and its predecessor superseded any common law 
exceptions.  It contends that, in any event, such a “board only” common law exception 
never existed in Delaware.   
 
SeeCubic, Inc. (“SeeCubic”) argues that the court correctly found that neither the 
Charter, nor Section 271, required approval of the Class B shares to effectuate the Omnibus 
Agreement.   
 
Because we agree that a majority vote of Class B stockholders is required under 
Stream’s charter, we VACATE the injunction, REVERSE the declaratory judgment, and 
REMAND for further proceedings consistent with this opinion. 
 
1 For simplicity, we refer only to Stream when discussing the positions that Stream and the Rajans 
have advanced in their briefing.  Mathu and Raja Rajan are members of Stream’s board of 
directors, corporate officers, and controlling stockholders.   
4 
 
I. 
 FACTUAL AND PROCEDURAL BACKGROUND2 
We focus only on the facts relevant to the issue on appeal which is whether the Class 
B stockholders are entitled to a vote in connection with the transactions contemplated by 
the Omnibus Agreement.   
A. Stream. 
Stream is a Delaware corporation that was founded in 2009 to develop and 
commercialize technology that enables viewers to watch three-dimensional content 
without 3D glasses.3  Stream hired engineers to develop Stream’s technology, which has 
been described as promising and revolutionary; however, eleven years after its founding, 
Stream remained a pre-revenue, development-stage company.  
 
The Rajan family controlled Stream primarily through an investment vehicle owned 
by Mathu Rajan, his brother Raja Rajan, and their parents.  Together, they hold 19,000,000 
Class B shares carrying ten votes per share, giving the Rajans a majority of the Class B 
common stock and a majority of Stream’s outstanding voting power.4  The Court of 
 
2 The background facts pertinent to this appeal are drawn primarily from the December 8, 2020 
Preliminary Injunction Opinion, Stream TV Networks, Inc. v. SeeCubic, Inc., 250 A.3d 1016 (Del. 
Ch. 2020) (the “P.I. Opinion”), the September 23, 2021 Order Granting In Part SeeCubic, Inc’s 
Motion for Summary Judgment, Stream TV Networks, Inc. v. SeeCubic, Inc., 2021 WL 4352732 
(Del. Ch. Sept. 23, 2021) (the “SJ Order”), the November 10, 2021 Order Entering Partial Final 
Judgment Under Rule 54(b), Stream TV Networks, Inc. v. SeeCubic, Inc., 2021 WL 5240591 (Del. 
Ch. Nov. 10, 2021) (the “Partial Final Judgment Order”), and the December 8, 2021 Order Denying 
Stream’s Motion to Modify the Injunction, Stream TV Networks, Inc. v. SeeCubic, Inc., 2021 WL 
5816820 (Del. Ch. Dec. 8, 2021),  (the “Modification Opinion”).   
3 Stream TV, 250 A.3d at 1022.  
4 Id.  At the board level, the Rajan brothers historically have controlled Stream.  There were, 
however, three outside directors on the board at various times.  From approximately 2015 until 
2019, Leo Hindery served as an outside director, but he resigned in July 2019 over disputes with 
the Rajan brothers.  From approximately 2018 until 2019, Mark Coleman served as a second 
5 
 
Chancery observed that “[d]uring its existence, Stream’s corporate governance practices 
have been virtually nonexistent.”5  Stream did not hold annual meetings of stockholders or 
keep regular minutes of Board meetings.   
B. Stream’s Investors. 
Since Stream’s founding in 2009, Stream raised approximately $160 million from 
third-party investors in the form of a combination of debt and equity.  Stream’s senior 
secured creditor, SLS Holdings VI, LLC (“SLS”), loaned $6 million to Stream through a 
series of secured notes (the “SLS Notes”).  Stream pledged all of its assets, and the assets 
of its wholly-owned subsidiaries, as security for the SLS Notes and executed a security 
agreement which authorized SLS to take control of Stream’s assets to satisfy the SLS Notes 
if Stream defaulted.   
Stream’s junior secured creditor, Hawk Investment Holdings Limited (“Hawk”), 
loaned Stream more than £50 million, plus $1.336 million, through a series of junior 
secured notes (the “Hawk Notes”).  Subject to the senior security interest held by SLS, 
Stream pledged all of its assets as security for the Hawk Notes and executed a security 
agreement that authorized Hawk to take control of Stream’s assets to satisfy the Hawk 
Notes if Stream defaulted.  
 
outside director but resigned in July 2019 over disputes with the Rajan brothers.  From 2011 until 
2014, Shad Stastney, the principal of Stream’s senior secured creditor, served as an outside 
director.  He rejoined the board in 2019 and served as Chief Financial Officer before resigning on 
January 30, 2020.  Id. at 1023.  The Rajan brothers also dominated Stream at the officer level.  
Mathu has served as Stream’s Chief  Executive Officer since the Company’s founding, and Raja 
served as general counsel and Chief Operating Officer since soon after the Company’s founding. 
5 Id. at 1023.  
6 
 
C. Stream’s Financial Difficulties. 
In 2019, Alistair Crawford (“Crawford”), a stockholder of Stream and the 
representative of fifty-two of Stream’s stockholders (the “Equity Investors”), engaged in 
discussions with SLS, Hawk, and the Rajan brothers about restructuring Stream.  Crawford 
proposed forming a “NewCo” that would acquire Stream’s assets and have a more 
transparent and investor-friendly governance structure.  In December 2019, Crawford 
provided the Rajan brothers, SLS, and Hawk with a draft of the Omnibus Agreement and 
other documents to implement the restructuring.  The Rajan brothers refused to agree to 
the restructuring, and the discussions broke down.   
In January 2020, the Equity Investors filed a lawsuit in the Court of Chancery 
against the Rajan brothers.  During the same month, Stream missed payroll at least once.  
In February 2020, Stream managed to make payroll, but only due to an emergency 
infusion of capital from Hawk and a short-term loan from another investor.  Stream still 
furloughed numerous employees, and by the end of February 2020, Stream had defaulted 
on the SLS Notes and Hawk Notes.   
On March 9, 2020, SLS notified Stream that Stream was in default.6  With the 
Company failing, SLS, Hawk and Crawford urged the Rajan brothers to appoint outside 
directors.  Three days later, on March 12, 2020, the Board was comprised of the Rajan 
 
6 Id. at  1024.  In addition to the debts that Stream owed its secured creditors, SLS, and Hawk, 
Stream carried more than $16 million in trade debt and had fallen months behind on payments to 
customers and suppliers.  Stream even failed to make the payments necessary to maintain the 
patents on its technology.  Id. 
7 
 
brothers and four independent outside directors:  Krzystof Kabacinski, Asaf Gola, Kevin 
Gollop, and Frank Hodgson (collectively, the “Outside Directors”).7   
On March 23, 2020, SLS filed a complaint in Delaware Superior Court against 
Stream seeking foreclosure and other relief. 
D. The Resolution Committee. 
From March 2020 through May 2020, the Outside Directors participated in Board 
meetings, approved minutes, voted on resolutions, and approved other corporate actions.  
When the Outside Directors learned of Stream’s financial difficulties, they concluded that 
the only path forward was to negotiate a resolution with the Company’s secured creditors 
and the Equity Investors.  In April 2020, the Outside Directors revisited the restructuring 
discussions with the Rajan brothers.  Raja initially participated in the discussions, but his 
presence generated tension.  It became clear that the Outside Directors would have to 
attempt to broker a resolution.   
On May 4, 2020, during a meeting of the Board, Gola proposed three resolutions 
for consideration.  Two of Gola’s resolutions, and an alternative to Gola’s third resolution, 
were adopted.  Only Gola’s second resolution is relevant to the appeal.  It proposed the 
creation of the Resolution Committee with Gola and Gollop as its members.  The 
Resolution Committee would have “the full power and authority of the full Board of 
 
7 In the proceedings before the Court of Chancery, Stream and the Rajan brothers challenged 
whether the Outside Directors were validly appointed.  However, on appeal, Stream does not 
challenge the Court of Chancery’s finding that the Outside Directors were either appointed validly, 
or in the alternative, that they were de facto directors.  Therefore, we do not discuss the facts 
regarding the appointment of the Outside Directors.   
8 
 
Directors to resolve any existing or future debt defaults or claims, and any existing or future 
litigation, or threats thereof, on behalf of [Stream], without further action being required 
from the Board of Directors or any executive of the [C]ompany.”8  The Rajan brothers 
abstained from the vote; however, the three directors who voted in favor constituted a 
majority of a quorum, and the motion carried. 
E. The Omnibus Agreement. 
On May 6, 2020, the Resolution Committee approved the Omnibus Agreement.  
The parties to the Omnibus Agreement were Stream, SLS, Hawk, and certain Equity 
Investors.9  
The Omnibus Agreement provided that Stream would assign its assets to SeeCubic 
in lieu of SLS and Hawk continuing to pursue foreclosure, and SeeCubic would allow Class 
A common stockholders to exchange their shares.  Specifically, the Omnibus Agreement 
provided that SLS and Hawk “agreed to stay the [f]oreclosure and satisfy and extinguish 
each of the SLS Notes and the Hawk Notes in their entirety subject to [Stream] assigning 
all right, title and interest in and to all assets of [Stream] to a newly-formed holding 
company [SeeCubic] established by SLS and Hawk, in satisfaction of the SLS Notes and 
the Hawk Notes.”10  Further, the Omnibus Agreement gave holders of Stream’s Class A 
common stock, other than the Rajan Brothers and their affiliates, the right to exchange their 
shares of Stream’s Class A common stock for an identical number of shares of SeeCubic’s 
 
8 Id. at 1025 (alternations in original) (quoting Dkt. 101 Ex. 56, at 1057). 
9 Stream’s authorized signatories were Gola and Gollop.  A150–51 (Omnibus Agreement).   
10 See A136 (Omnibus Agreement WHEREAS clause).   
9 
 
common stock at no cost.11  The Omnibus Agreement also provided that Stream would 
receive one million shares of SeeCubic’s Class A common stock.12   
F. The Rajan Brothers’ Attempt to Nullify the Omnibus Agreement. 
Soon after the Board created the Resolution Committee, the Rajan brothers 
attempted to neutralize it.  Initially, the Rajan brothers drafted a written consent of 
stockholders that purported to remove the Outside Directors.13  When that failed, the Rajan 
brothers developed theories designed to undermine the Resolution Committee, including 
recruiting Raja’s assistant to search for documentation reflecting whether the Outside 
Directors had accepted their directorships.  Eventually, the Rajan brothers resorted to 
refusing to comply with the Omnibus Agreement by trying to change who managed certain 
Stream subsidiaries and attempting to remove prototype technology from a storage facility 
in the Netherlands.14  
Once it became clear that the Rajan brothers intended to challenge the Omnibus 
Agreement’s validity, SLS, Hawk, the Equity Investors, and the Resolution Committee 
attempted to negotiate with the Rajan family to convince them to support the deal.  SLS, 
 
11 Stream TV, 250 A.3d at 1025; A139 (Omnibus Agreement § 1.1(d)).     
12 Stream TV, 250 A.3d at 1025; A139 (Omnibus Agreement § 1.1(f)). 
13 At the time of the P.I. Opinion, Stream alleged that the May Stockholder Consent (a written 
consent of stockholders drafted by the Rajan brothers dated May 6) removed the Outside Directors 
prior to the approval of the Omnibus Agreement, thereby causing the Omnibus Agreement to be 
invalid.  However, the Court of Chancery concluded that the evidence demonstrated that the Rajan 
brothers executed the May Stockholder Consent later, and possibly during the evening of May 8 
or on May 9, and then backdated the document to May 6 in an effort to preempt the Omnibus 
Agreement.  Stream TV, 250 A.3d at 1026.   
14 Mathu went as far as incorporating a new entity named Glasses-Free Technologies, Inc., and 
purported to grant it a license to use Stream’s technology.  Id. at 1027. 
10 
 
Hawk, and the Equity Investors offered to amend the Omnibus Agreement to give the Rajan 
brothers greater consideration, and the Rajan brothers pushed for personal benefits for 
themselves.15  Ultimately, the negotiations failed.  
G. Stream Files Suit in The Court of Chancery. 
On September 8, 2020, Stream filed suit and moved for a temporary restraining 
order (“TRO”) to bar SeeCubic from seeking to enforce the Omnibus Agreement.  
SeeCubic filed counterclaims and third-party claims requesting expedition and a TRO.  The 
court entered a status quo order and scheduled a hearing on the parties’ competing motions 
for preliminary injunctive relief.  From there on, “[c]reating litigation chaos seemed to be 
one of the Rajans’ strategies.”16   
1. The Preliminary Injunction Opinion. 
On December 8, 2020, the court issued the P.I. Opinion, concluding that SeeCubic 
was entitled to injunctive relief because the Resolution Committee had the authority to bind 
Stream to the Omnibus Agreement and that the Omnibus Agreement did not require a 
shareholder vote under Section 271 or the Class Vote Provision in Stream’s Charter.  The 
court concluded that “[n]either [Section 271 nor the Class Vote Provision] applie[d] to the 
transfer of assets contemplated by the Omnibus Agreement.”17  Therefore, the court 
 
15 These personal benefits included employment, compensation, and indemnification for litigation 
expenses.  Id.   
16 Stream TV, 2021 WL 5816820, at *1.  Stream went through two sets of lawyers (at the time of 
the Injunction Order, Stream was on its third set of lawyers), and the Rajan brothers’ represented 
themselves during portions of the litigation.     
17 Stream TV, 250 A.3d at 1033.  The P.I. Opinion also concludes that the Outside Directors were 
appointed validly and that the members of the Resolution Committee did not breach their fiduciary 
11 
 
granted SeeCubic’s motion for a preliminary injunction and denied Stream’s competing 
motion.18   
a. The Court’s Section 271 Analysis at the Preliminary Injunction Stage.  
 
Starting with Section 271 of the DGCL, the court determined that the question 
before it was “whether the transfer of Stream’s assets to its secured creditors under the 
circumstances presented [] constitute[d] a sale or exchange within the scope of Section 
271.”19  To answer this question, the court stated that although the assignment of Stream’s 
assets to SeeCubic could be classified as a “sale” or an “exchange” under Section 271, the 
better course of action was to “accept that the language of Section 271 is ambiguous as to 
whether it applies to transactions like the Omnibus Agreement,” and look to principles of 
statutory interpretation.20  The court then turned to Section 271’s legislative history, 
applied an insolvency exception sua sponte, and made three findings.   
First, the court found that the common law rule requiring a board to seek unanimous 
shareholder approval before selling all of the corporation’s assets was subject to an 
 
duties, therefore, the Court of Chancery did not enter a mandatory injunction.  See id. at 1028–31, 
1045–47.   However, these conclusions are not challenged on appeal. 
18 The court concluded that it was reasonably probable that the Omnibus Agreement was a valid 
and binding agreement, and prohibited Stream, the Rajans, and anyone acting in concert with them, 
from interfering with SeeCubic’s rights under the Omnibus Agreement. 
19 Id. at 1033.   
20 Id. at 1041.  Specifically, the court noted that “Stream does not cite any dictionary definitions, 
but argues without support that the plain meaning of the terms ‘sale’ and ‘exchange’ must 
encompass the transfer of all Stream’s assets to SeeCubic.  In light of the [Black’s Law Dictionary] 
definitions [of ‘sale’ and ‘exchange’] . . . that conclusion is plausible but not mandated.”  Id. at 
1040 (emphasis added).  
12 
 
insolvency exception, thereby allowing boards to transfer all or substantially all of an 
insolvent company’s assets to creditors without shareholder approval.   
Second, the court found that the evolution of Section 271’s language, mainly the 
addition of specific acceptable forms of consideration that did not include “forgiveness of 
debt,” supported allowing an insolvent or failing firm to transfer all or substantially all of 
its assets to creditors.21   
Third, the court found that, because Section 272 does not require a shareholder vote 
for the pledging of corporate assets as collateral (unless the corporate charter specifies 
otherwise), requiring a shareholder vote under Section 271 before a company could 
otherwise transfer its assets to a creditor “would be contrary to the plain language of 
Section 272” and against Delaware public policy.22   
The Court of Chancery explained that, prior to the General Assembly modernizing 
Delaware’s merger statutes, the preferred transaction vehicle involved the target 
corporation selling all of its assets and then dissolving and distributing the consideration to 
its stockholders, i.e., asset transfers.23  Further, at common law, the general rule was that 
the directors only have the power of management in conducting ordinary business affairs.  
This prevented directors from selling the assets of the business without unanimous 
stockholder approval.  Thus, the objection of a single shareholder could thwart the efforts 
to sell a corporation’s assets.    
 
21 Id. at 1042. 
22 Id. at 1043. 
23Id. at 1033–34.     
13 
 
However, the court stated that this strict rule was not without exceptions.  “A late 
nineteenth century treatise noted that for ‘a failing company the rule is different, and a sale 
of the whole property may be made by the directors.’”24  The court cited to two twentieth-
century treatises for the same proposition, 25 and noted that even today, a “Delaware treatise 
acknowledges the ‘failing business’ exception to the common law rule.”26  The court also 
cited a Court of Chancery opinion from 1915 that “acknowledged the general prohibition 
on selling all of a corporation’s assets, as well as the exception for an insolvent or failing 
firm.”27  After reviewing Section 271’s statutory predecessor, Section 64a, the court found 
that “[t]here is no indication that the General Assembly intended to restrict or eliminate 
authority that already existed at common law, such as the power of the directors of an 
insolvent and failing corporation to sell its assets.”28   
Against this common law backdrop, the court reviewed Section 271’s revisions.  “A 
1929 amendment confirmed that the consideration could consist ‘in whole or in part [of] 
shares of stock in, and/or other securities of, any other corporation or corporations.’”29  In 
1967, the General Assembly revised the statute again by expanding the expressly permitted 
 
24 Id. at 1035 (quoting 1 Charles Fisk Beach, Jr., Company Law:  Commentaries on the Law of 
Private Corporations § 357, at 582 (1891)).  
25 Id. at 1036 (citing Thomas Conyngton & R. J. Bennett, Corporation Procedure 232 (rev. ed. 
1927); Henry Winthrop Ballantine, Ballantine on Corporations § 281 (1946)). 
26 Id. (citing 1 R. Franklin Balotti & Jesse A. Finkelstein, The Delaware Law of Corporations & 
Business Organizations §10.7, 10–34 (3d ed. 1998 & 2011 Supp.)).  
27 Id. at 1036 (citing Butler v. New Keystone Copper Co., 93 A. 380, 382 (Del. Ch. 1915)). 
28 Id. at 1037.   
29 Id. at 1037 (alteration in original) (quoting 36 Del. Laws ch. 135 § 19 (1929)). 
14 
 
forms of consideration to include “money or other property.”30  In addition, the court noted 
that the 1967 revision made two related changes to the DGCL:  adding a new provision, 
Section 272, and eliminating a provision that did not require either board approval or a 
stockholder vote to accomplish a sale of assets to a secured creditor by decree  because that 
provision was unnecessary given the rights generally available to secured creditors.31   
The court observed that, today, Section 271 mandates a “two-step process” that first 
requires board approval, and then requires stockholder approval.32  Section 271(a) 
provides: 
Every corporation may at any meeting of its board of directors or governing 
body sell, lease or exchange all or substantially all of its property and assets, 
including its goodwill and its corporate franchises, upon such terms and 
conditions and for such consideration, which may consist in whole or in part 
of money or other property, including shares of stock in, and/or other 
securities of, any other corporation or corporations, as its board of directors 
or governing body deems expedient and for the best interests of the 
corporation, when and as authorized by a resolution adopted by the holders 
of a majority of the outstanding stock of the corporation entitled to vote 
thereon or, if the corporation is a nonstock corporation, by a majority of the 
members having the right to vote for the election of the members of the 
governing body and any other members entitled to vote thereon under the 
certificate of incorporation or the bylaws of such corporation, at a meeting 
duly called upon at least 20 days’ notice.  The notice of the meeting shall 
state that such a resolution will be considered.33 
 
 
30 Id. at 1037–38.  The revision added the words “substantially all” as well. 
31 Id. at 1038; see also id. at 1038 n.18 (“The revisions attempted to eliminate redundant and 
unnecessary provisions.”).   
32 Id. at 1039.   
33 8 Del. C. § 271(a).   
15 
 
The court concluded that interpreting Section 271 as requiring a shareholder vote 
for the type of transaction contemplated by the Omnibus Agreement would create a conflict 
with Section 272.  Section 272 provides: 
The authorization or consent of stockholders to the mortgage or pledge of a 
corporation’s property and assets shall not be necessary, except to the extent 
that the certificate of incorporation otherwise provides.34 
 
In explaining the conflict, the court reasoned that:   
[i]nterpreting Section 271 to require a stockholder vote before an insolvent 
or failing corporation can transfer its assets to secured creditors would 
conflict with Section 272 of the DGCL, which authorizes a corporation to 
mortgage or pledge all of its assets without complying with Section 271.  
Section 272 is silent as to whether a secured creditor can foreclose on its 
security interest in the debtor corporation’s assets, but the statutory scheme 
would not function if the debtor corporation had to comply with Section 271 
before the creditor could foreclose.  When facing the prospect of foreclosure, 
the board and stockholders of the debtor corporation would have no incentive 
to approve the transfer of the corporation’s assets.  As a practical matter, any 
creditor who wanted to ensure that it had the ability to levy on the pledged 
collateral would have to obtain a stockholder vote when entering into the 
credit agreement, contrary to the plain language of Section 272.35 
 
The court concluded that Section 271 did not apply to the Omnibus Agreement 
because Stream was insolvent, its stockholders no longer had a “meaningful interest in the 
firm,” and the secured creditors were entitled to its assets.36  Therefore, “[u]nder the DGCL, 
the Omnibus Agreement did not require a stockholder vote.”37 
 
 
34 8 Del. C. § 272. 
35 Stream TV, 250 A.3d at 1021–22. 
36 Id. at 1043. 
37 Id. 
16 
 
b. The Court of Chancery Interprets the Charter.  
 
 
After analyzing Section 271, the court turned to the Charter’s Class B stockholder 
vote provision (the “Class Vote Provision”).  The court found that the language in the Class 
Vote Provision was “parallel” to Section 271 such that the Charter’s language warranted 
the same interpretation as Section 271.     
In full, the Charter’s Class Vote Provision provides: 
For so long as shares of Class B Voting Stock remain outstanding, in addition 
to any other vote or consent required herein or by law, the affirmative vote 
or written consent of the holders of a majority of the then-outstanding shares 
of Class B Voting Stock, voting as a separate class, shall be necessary for the 
Company to consummation [sic] an Acquisition or Asset Transfer.38 
 
The Charter defines “Acquisition” as: 
(A) any consolidation, stock exchange or merger of [Stream] with or into any 
other corporation or other entity or person, or any other corporate 
reorganization, other than any such consolidation, merger or reorganization 
in which the stockholders of [Stream] immediately prior to such 
consolidation, merger or reorganization, continue to hold a majority of the 
voting power of the surviving entity in substantially the same proportions (or, 
if the surviving entity is a wholly-owned subsidiary, its parent) immediately 
after such consolidation, merger or reorganization; or  
 
(B) any transaction or series of related transactions to which [Stream] is a 
party and in which excess of fifty percent (50%) of [Stream’s] voting power 
is transferred; provided that an Acquisition shall not include  
 
(x) any consolidation or merger effected exclusively to change the domicile 
of [Stream], or  
 
(y) any transaction or series of transactions principally for bona fide equity 
financing purposes in which cash is received by [Stream] or any successor or 
 
38 A124 (Charter § IV.D.2(d)). 
17 
 
indebtedness of [Stream] is cancelled or converted or a combination 
thereof.39 
 
The Charter defines “Asset Transfer” as: 
 
a  sale,  lease or  other disposition of all or substantially all of the assets or 
intellectual property of [Stream] or the granting of one or more exclusive 
licenses which individually or in the aggregate cover all or substantially all of 
the intellectual property of [Stream].40   
 
Although the court did not expressly conclude, at this stage, that the Omnibus 
Agreement was an “Asset Transfer” as defined under the Charter, the court stated in a 
footnote that “[t]he Omnibus Agreement involves a transfer of assets, so if any aspect of 
the Class Vote Provision covered the transaction, it would be the definition of ‘Asset 
Transfer.’”41  Starting with the definition of “Asset Transfer,” the court determined that 
“[t]he language of the Class Vote Provision track[ed] Section 271 of the DGCL,” and 
therefore resulted in the same outcome:  “Stream need not obtain stockholder approval 
under the Class Vote Provision to transfer mortgaged or pledged assets to the secured 
creditors who hold security interests in those assets.”42   
 
39 A126 (Charter § IV.D.4(b)(i)). 
40 A126 (Charter § IV.D.4(b)(ii)). 
41 Stream TV, 250 A.3d at 1044 n.24.  In contrast, in the court’s September 23, 2021 Order Denying 
The Rajans’ Motion to Modify the Preliminary Injunction Under Rule 65, the court states 
unequivocally that “The Omnibus Agreement contemplated an Asset Transfer.  It provided for 
Stream to transfer all of assets [sic] in exchange for SLS and Hawk ‘stay[ing] the [f]oreclosure [of 
Stream’s assets] and satisfy[ing] and extinguish[ing], in their entirety, the SLS Notes and the Hawk 
Notes, respectively.’”  Stream TV Networks, Inc. v. Seecubic, Inc., 2021 WL 4352731, at *2 (Del. 
Ch. Sept. 23, 2021) (alterations in original) (emphasis added). 
42 Stream TV, 250 A.3d at 1043. 
18 
 
Comparing Section 271 and the Class Vote Provision, the court found “only two 
differences.”43  First, the Class Vote Provision expressly refers to “intellectual property.”44  
According to the court, the phrase “intellectual property” “does not enlarge the voting 
obligation beyond the scope of Section 271, because intellectual property is already a type 
of asset.”45   
Second, the provision refers to “the granting of one or more exclusive licenses 
which individually or in the aggregate cover all or substantially all of the intellectual 
property of [Stream].”  The court acknowledged that the Omnibus Agreement “does not 
contemplate an exclusive license,” but it concluded that the Class Vote Provision’s 
reference to exclusive licenses shows that the drafters “knew how to define the concept of 
an ‘Asset Sale’ to include transactions that Section 271 would not otherwise reach.”46  It 
then stated that, “[i]f the drafters of the Class Vote Provision wanted to require a class vote 
before a secured creditor could foreclose on pledged or mortgaged assets, then the 
definition of ‘Asset Sale’ should have referred to that type of transaction.”47  Accordingly, 
the court concluded that the reference to “a sale, lease or other disposition” in the Asset 
Transfer definition tracked the language of Section 271 and “warrants the same 
 
43 Id. at 1045. 
44 Id. 
45 Id. 
46 Id.  
47 Id. 
19 
 
interpretation.”48  The court did not separately address whether the Omnibus Agreement 
fell into the “other disposition” category within the definition of Asset Transfer.49    
Accordingly, the court denied Stream’s motion for a preliminary injunction and 
granted SeeCubic’s motion for a preliminary injunction preventing Stream from interfering 
with the Omnibus Agreement. 
2. SeeCubic’s Motion for Summary Judgment. 
 
On January 19, 2021, SeeCubic moved for summary judgment and filed its opening 
brief.  SeeCubic’s motion for summary judgment sought the following relief:  a declaratory 
judgment that the Omnibus Agreement is valid and binding, a permanent injunction 
ordering Stream and the Rajans to comply with the Omnibus Agreement, and a judgment 
against the Rajans for converting the assets identified in the Omnibus Agreement. 
Stream filed its answering brief on February 17, 2021, relying exclusively on the 
briefs it filed in connection with the parties’ cross motions seeking preliminary injunctive 
relief.  Before the parties completed the briefing, Stream and the Rajans filed for 
 
48 Id. (citing Warner Commc’ns Inc. v. Chris-Craft Indus., Inc., 583 A.2d 962, 969 (Del. Ch.), 
aff’d, 567 A.2d 419, 1989 WL 136971 (Del. Oct. 18, 1989) (TABLE)).   
49 In a footnote, the court addressed Stream’s “conclusory” claim that the Omnibus Agreement 
was an Acquisition under the Charter.  According to the court, “[t]he Omnibus Agreement does 
not contemplate a consolidation or merger, which are specific types of transactions having 
independent legal significance,” and therefore part (A) of the definition of Acquisition did not 
apply.  Id. at 1044 n.24.  The court reasoned that the Omnibus Agreement also did not “result in 
the transfer of any of Stream’s voting power,” and therefore part (B) of the definition of 
Acquisition did not apply.  Id.  “By process of elimination” the court determined that “perhaps 
Stream [thought] the Omnibus Agreement contemplate[d] a ‘reorganization.’”  Id.  However, the 
court determined that “Stream would have to provide authorities delineating the content of the 
term and why it could encompass the Omnibus Agreement” as well as “explain why that concept 
would trigger a stockholder vote when the definition of ‘Asset Transfer’ did not.”  Id.   
20 
 
bankruptcy, resulting in an automatic stay of the proceedings before the Court of 
Chancery.50  The bankruptcy court dismissed the case as a bad faith filing, and described 
it as an effort “to gain a tactical litigation advantage that is a part of a continued pattern of 
effort to nullify, undermine, and/or interfere with the [O]mnibus [A]greement, vitiate the 
purpose and effect of the Chancery Court’s order, and to maintain ownership and control 
over the assets of the debtor . . . .”51   
On September 23, 2021, the Court of Chancery granted, in part, SeeCubic’s motion 
for summary judgment.52  The SJ Order granted summary judgment in SeeCubic’s favor 
declaring the Omnibus Agreement to be valid and binding.  The court also granted 
SeeCubic’s motion for a permanent injunction and converted the preliminary injunction 
into a permanent injunction.  Finally, the court denied SeeCubic’s motion as to the 
conversion claim because the court found that the summary judgment record did not 
support it. 
 
50 Stream TV, 2021 WL 5816820, at *1; A043 (Dkt. 126). 
51 Stream TV, 2021 WL 5816820, at *1 (alterations in original); B36–37 (Bankruptcy Ruling at 
13–14).  On May 27, 2021, after the bankruptcy stay lifted, Mathu Rajan filed a pro se letter 
application claiming that the P.I. Opinion was the product of fraud.  Stream TV, 2021 WL 5816820, 
at *1; A048 (Dkt. 138).  On June 4, 2021, Mathu filed a formal motion to set aside the P.I. Opinion.  
Stream TV, 2021 WL 5816820, at *1; A049 (Dkt. 143).  Then, on September 15, 2021, the Rajans 
had a third-party seek to intervene and file additional motions.  Stream TV, 2021 WL 5816820, at 
*1; A057 (Dkt. 183).  The very next day, on September 16, 2021, the Rajans filed another motion 
to modify the preliminary injunction.  Stream TV, 2021 WL 5816820, at *1; A058 (Dkt. 185).  The 
court rejected the Rajans’ various efforts to set aside the P.I. Opinion, prompting the Court of 
Chancery’s statement that “litigation chaos” seemed to be the Rajans’ strategy.  Stream TV, 2021 
WL 5816820, at *1. 
52 See generally Stream TV, 2021 WL 4352732 (granting in part SeeCubic’s motion for summary 
judgment as to the validity of the Omnibus Agreement and its request for a permanent injunction). 
21 
 
3. Stream and the Rajans Move for Partial Final Judgment, Appeal to This 
Court, and Move to Modify or Stay the Permanent Injunction Pending 
Appeal. 
 
On September 28, 2021, Stream and the Rajans moved to have the Court of 
Chancery enter the SJ Order as a partial final judgment and to stay SeeCubic’s conversion 
claim, which the court granted on November 10, 2021.53   
On November 12, 2021, Stream and the Rajans noticed this appeal.  On the same 
day, Stream and the Rajans moved to modify or stay the permanent injunction pending 
appeal.  The court denied both requests.54  The court denied Stream’s request to modify the 
permanent injunction because “[t]here have not been any significant changes in the status 
quo” since the court entered comparable relief in the form of a preliminary injunction on 
December 8, 2020.55  After analyzing the four factors from Kirpat, Inc. v. Delaware 
Alcoholic Beverage Control Commission that guide a trial court’s discretion to grant or 
deny a stay, the court concluded that a stay was unwarranted.56  In doing so, the Court of 
Chancery elaborated on its reasoning that Section 271 did not supersede the common law’s 
recognition that directors could sell the assets of an insolvent firm without stockholder 
approval.  
 
 
 
53 See generally Stream TV, 2021 WL 5240591 (entering partial final judgment under Rule 54(b)).    
54 See Stream TV, 2021 WL 5816820, at *2.   
55 Id.  
56 Id. at *15.  This Court identified the four factors in Kirpat, Inc. v. Delaware Alcoholic Beverage 
Control Comm’n, 741 A.2d 356 (Del. 1998).  
22 
 
H. The Parties’ Contentions on Appeal. 
Stream raises four arguments on appeal.  First, it contends that the Class Vote 
Provision unambiguously requires Class B stockholder approval and renders Section 271’s 
default voting rule irrelevant.  Second, Stream contends that the Court of Chancery erred 
by looking first to Section 271 prior to construing the Charter.  Stream further asserts that 
the court bypassed the Charter’s plain terms in order to apply a “board only” common law 
insolvency exception to Section 271.  Third, Stream contends that Section 271 superseded 
any such common law exceptions assuming, arguendo, that such an exception did exist.  
Finally, Stream argues that the ruling, as a matter of public policy, would upset Delaware’s 
contractarian focus and the predictable application of Section 271. 
II. 
STANDARD OF REVIEW 
This matter involves the interpretation of both a charter provision and a statute.  
“The construction or interpretation of a corporate certificate or by-law is a question of law 
subject to de novo review by this Court.”57  “Certificates of incorporation are regarded as 
contracts between the shareholders and the corporation, and are judicially interpreted as 
such.”58  “Unless there is ambiguity, Delaware courts interpret contract terms according to 
their plain, ordinary meaning.”59  “Statutory interpretation is a question of law, which we 
review de novo.”60  
 
57 Centaur Partners, IV v. National Intergroup, Inc., 582 A.2d 923, 926 (Del. 1990).  
58 Alta Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381, 385 (Del. 2012). 
59 Id. 
60 Salzberg v. Sciabacucchi, 227 A.3d 102, 112 (Del. 2020) (citing Corvel Corp. v. Homeland Ins. 
Co. of N.Y., 112 A.3d 863, 868 (Del. 2015)).   
23 
 
III. 
ANALYSIS 
 
First, we consider whether the Class Vote Provision requires Class B majority 
stockholder approval of the Omnibus Agreement.  Stream argues that the Court of 
Chancery analyzed the issue “upside down” by applying its interpretation of Section 271 
to a clear and unambiguous charter provision.  Instead, Stream contends, the plain text of 
the Class Vote Provision controls and Section 271’s default rules are irrelevant.61  We agree 
and explain our reasoning below. 
 
In assessing corporate action for legal compliance, the DGCL does outrank a 
corporation’s charter such that a charter provision is invalid if it conflicts with a provision 
of the DGCL.  As we recognized in Salzberg v. Sciabacucchi,62 Section 102(b)(1) governs 
the scope of corporate charters, and its scope is “broadly enabling.”63  But Section 102(b)’s 
broad authorization “is constrained by the phrase, ‘if such provisions are not contrary to 
the laws of this State.’”64  We stated further that: 
in Sterling v. Mayflower Hotel Corp., this Court held that Section 102(b)(1) 
bars only charter provisions that would “achieve a result forbidden by settled 
rules of public policy.”  Accordingly, “the stockholders of a Delaware 
corporation may by contract embody in the [certificate of incorporation] a 
provision departing from the rules of the common law, provided that it does 
 
61 To be clear, Stream argued below that “[e]ven if [the] Charter’s approval procedures do not 
govern, the Omnibus Agreement is still void because Section 271 [of the] Delaware Code requires 
shareholder-approval.”  A209 (Pls.’ Opening Br. Supp. Mot. Prelim. Inj.).  Stream abandons this 
argument on appeal and asserts that Section 271 is “irrelevant.”  Opening Br. at 14 (“The Charter 
Unambiguously Controlled The Class B Voting Shareholders’ Blocking Rights; Section 271 Was 
Irrelevant.”). 
62 Salzberg, 227 A.3d 102. 
63 Id. at 115. 
64 Id. (citing 8 Del. C. § 102(b)(1)). 
24 
 
not transgress a statutory enactment or a public policy settled by the common 
law or implicit in the General Corporation Law itself.”65 
 
 
Thus, we proceed with analyzing whether the Class Vote Provision requires a vote 
of the Class B stockholders.66   Considering the plain and ordinary meaning of the term 
“disposition,” we conclude that it does.  More specifically, the Omnibus Agreement effects 
an “Asset Transfer” that unambiguously triggers a majority vote of the Class B 
stockholders.  Therefore, extrinsic evidence is not used to interpret the Class Vote 
Provision.67   
Next, because we disagree with the Court of Chancery that the language of the Class 
Vote provision of the Charter “tracks the text of Section 271,”68 we do not look to Section 
271 as an interpretative guide in construing the provision.  And because we conclude that 
a vote is required because the Omnibus Agreement falls within the materially broader 
definition of Asset Transfer, we need not resolve whether such a vote is also required under 
the plain language of Section 271, i.e., whether the Omnibus Agreement effects a “sale, 
 
65 Id. at 115–16 (alteration in original) (emphasis added) (footnotes omitted) (quoting Sterling v. 
Mayflower Hotel Corp., 93 A.2d 107, 118 (Del. 1952)). 
66 See, e.g., Jones Apparel Grp., Inc. v. Maxwell Shoe Co., 883 A.2d 837, 840–41 (Del. Ch. 2004) 
(analyzing first whether Maxwell’s charter precluded Maxwell’s board from setting the record date 
in connection with plaintiff’s consent solicitation (i.e., the proper interpretation of the charter), and 
second, determining whether that charter provision was valid under the DGCL), reprinted in 30 
Del. J. Corp. L. 284, 288–90 (2005). 
67 See Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232 (Del. 1997) (“If a 
contract is unambiguous, extrinsic evidence may not be used to interpret the intent of the parties, 
to vary the terms of the contract or to create an ambiguity.”). 
68 Stream TV, 250 A.3d at 1044–45; Stream TV, 2021 WL 5816820, at *15 (“As explained in the 
Injunction Decision, the language of [the Asset Transfer] provision ‘tracks the text of Section 271 
and warrants the same interpretation.’”). 
25 
 
lease or exchange” within the meaning of Section 271.  In sum, we agree with the Vice 
Chancellor that the Omnibus Agreement effects an Asset Transfer under the Charter.  
However, because Section 271’s language is materially different, our agreement ends there, 
as does our analysis, as the parties have raised no argument that the Charter violates “a 
public policy settled by the common law or implicit in the [DGCL] itself.”69     
Finally, although we need not further consider Section 271, we clarify that a 
common law insolvency exception, if one existed in Delaware, did not survive the 
enactment of Section 271 and its predecessor.  Thus, there is no Delaware common law 
“board only” insolvency exception under Section 271.  Rather, the enactment of Section 
271 and its predecessor superseded any such common law exception, to the extent one 
existed in Delaware.  
A. The Charter Requires a Class B Stockholder Vote Because the Omnibus Agreement 
Effects an “Asset Transfer” under Stream’s Charter. 
 
Stream argues that the Omnibus Agreement is both an Acquisition and an Asset 
Transfer, and therefore requires a vote of the Class B stockholders under the Charter.  
Because we conclude that the Omnibus Agreement effects an “Asset Transfer,” we need 
not decide whether or not it also constitutes an “Acquisition.”   
“Delaware adheres to an objective theory of contracts, meaning that a ‘contract’s 
construction should be that which would be understood by an objective, reasonable third 
 
69 See Sterling, 93 A.2d at 118.  Rather, the Court of Chancery identified only one public policy 
concern, namely, “interpreting Section 271 as applying to a creditor’s efforts to levy on its security 
would undercut the value of the security interest.”  Stream TV, 250 A.3d at 1042.  Also, no party 
in this litigation has argued that in the context of judicial foreclosure proceedings, a stockholder 
vote is required.  Rather, the Omnibus Agreement effects a type of privately-structured work-out.      
26 
 
party.’”70  We “place[] great weight on the plain terms of a disputed contractual provision,” 
and, therefore, we “interpret clear and unambiguous terms according to their ordinary 
meaning.”71  “We do not consider extrinsic evidence unless we find that the text is 
ambiguous.”72  “Ambiguity is present ‘only when the provisions in controversy are 
reasonably or fairly susceptible of different interpretations or may have two or more 
different meanings[,]’”73 and not “simply because the parties do not agree upon its proper 
construction.”74  
 
An affirmative vote of the holders of a majority of the then-outstanding shares of 
Class B stock is necessary to consummate an Asset Transfer.  The Charter defines “Asset 
Transfer” as: 
a sale, lease or other disposition of all or substantially all of the assets or 
intellectual property of [Stream] or the granting of one or more exclusive 
licenses which individually or in the aggregate cover all or substantially all 
of the intellectual property of [Stream].75   
 
The parties agree that the Omnibus Agreement is not a sale or lease of all of Stream’s 
assets.  The parties also agree that the Omnibus Agreement addresses all of the assets of 
Stream.  Thus, Stream focuses on the phrase “other disposition” and argues that the 
 
70 Cox Commc’ns, Inc. v. T-Mobile US, Inc., --- A.3d ---, ---, 2022 WL 619700, at *5 (Del. Mar. 
3, 2022). 
71 Id. (quoting Leaf Invenergy Co. v. Invenergy Renewables LLC, 210 A.3d 688, 696 (Del. 2019)). 
72 Id. (citing Exelon Generation Acquisitions, LLC v. Deere & Co., 176 A.3d 1262, 1267 (Del. 
2017)). 
73 Id. (quoting Rhone-Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192, 1196 
(Del. 1992)). 
74 Rhone-Poulenc Basic Chems. Co., 616 A.2d at 1196. 
75 A126 (Charter § IV.D.4(b)(ii)). 
27 
 
Omnibus Agreement effects an Asset Transfer that requires a vote of Class B stockholders 
to be effective.   
Stream argues that the words, “other disposition,” are “broader” than the word 
“exchange” in Section 271.  Further, Stream argues that the difference in word choice must 
be seen as “intentional” and reinforces a conclusion that the parties intended for the Charter 
to have a different meaning than the statute.  We agree and conclude that the Charter’s 
definition of Asset Transfer differs materially from Section 271.  The definition of Asset 
Transfer changes Section 271’s phrase of “sell, lease or exchange,”76 to “sale, lease or 
other disposition.”77  Further, the Class Vote Provision contains express references to 
“intellectual property” and the granting of “exclusive licenses.”78  The drafters “could have 
simply tracked the language of the statute,” but did not.79  Accordingly, the Charter’s use 
of the phrase “other disposition” has a meaning that is different, and broader, than the term 
“exchange.”80  It follows that, there is no need to look to Section 271 as an interpretative 
 
76 8 Del. C. § 271(a). 
77 A126 (Charter § IV.D.4(b)(ii)). 
78 Id. 
79 See Jones Apparel Grp. Inc, 883 A.2d at 842 (“[T]he drafters [of a charter] could have simply 
tracked the language of the statute, but did not.  That choice cannot be seen as anything other than 
intentional, reinforcing the conclusion that to read a proviso back into [the charter] allowing the 
board to set the record date would contravene the plain meaning of that provision.”).   
80 See, e.g., Wilmington Trust Co., 2008 WL 555914, at *8 (Del. Ch. Feb. 29 2008) (“[T]he words 
‘transfer’ and ‘disposition,’ in particular, are inherently broad terms generally understood to 
encompass changes in title or ownership.”). 
28 
 
guide in construing the language of the Class Vote Provision because the Charter’s 
language does not track Section 271.81   
That leads us to the key inquiry -- the meaning of “other disposition,” which is not 
defined in the Charter.  Corporate charters are contracts, and our rules of contract 
interpretation apply.82  “The Court must first attempt to ascertain the parties’ intent from 
the language of the contract.”83  Words or phrases used in a bylaw or charter are to be given 
their commonly accepted meaning, and this Court “often looks to dictionaries to ascertain 
a term’s plain meaning.”84   
Black’s Law Dictionary defines “disposition” as “[t]he act of transferring something 
to another’s care or possession,” “the relinquishing of property” and as “[a] final settlement 
or determination,” such as a “court’s disposition of the case.”85  Merriam-Webster defines 
“disposition” as “the act or the power of disposing or the state of being disposed:  such as 
. . . a final arrangement[] settlement” and “the transfer to the care or possession of 
 
81 The Class Vote Provision is also more specific than Section 271 in function as it requires a 
majority vote of outstanding Class B shares whereas Section 271 requires a vote of all outstanding 
shares.   
82 BlackRock Credit Allocation Income Tr. v. Saba Cap. Master Fund, Ltd., 224 A.3d 964, 977 
(Del. 2020); Centaur Partners, IV, 582 A.2d at 928.   
83 E.I. du Pont de Nemours & Co. v. Admiral Ins. Co., 711 A.2d 45, 56 (Del. 1995).   
84 In re Solera Ins. Coverage Appeals, 240 A.3d 1121, 1132 (Del. 2020) (citing Lorillard Tobacco 
Co. v. Am. Legacy Found, 903 A.2d 728, 738 (Del. 2006)).  See State of Delaware Dep’t of Nat. 
Res. And Env’t Control v. McGinnis Auto & Mobile Home Salvage, LLC, 225 A.3d 1251, 1260–
61 (Del. 2020) (Valihura, J., dissenting) (“Delaware case law is well settled that undefined words 
are given their plain meaning based upon the definition provided by a dictionary.”).   
85 Disposition, Black’s Law Dictionary (11th ed. 2019).  “Disposition” also contains specific 
definitions for certain types of dispositions, such as testamentary, ambulatory, and informal.  See 
id. 
29 
 
another.”86  Similarly, American Heritage defines “disposition” as “[a]n act of disposing; 
a bestowal or transfer to another.”87  Cambridge Dictionary defines “disposition” as “the 
process of selling something or formally giving it to someone” and “the way in which a 
formal process, such as a business deal or a matter dealt with in a court of law, is 
completed.”88  Collins similarly defines “disposition” as “a selling or giving away, as of 
property.”89  Finally, Ballentine’s Law Dictionary defines “disposition” as “[a]n 
arrangement.  A transfer of property.  The power of disposal.”90  We conclude, as explained 
further below, that the term, “other disposition,” includes the transfer of assets 
contemplated in the Omnibus Agreement. 
The Omnibus Agreement effects a transfer and assignment of all rights, title and 
interest in all of Stream’s assets for the benefit of Stream’s creditors.  This is evident from 
the language of the agreement itself as it recites:   
WHEREAS, SLS and Hawk have each agreed to stay the [f]oreclosure and 
satisfy and extinguish each of the SLS Notes and the Hawk Notes in their 
entirety subject to the Company assigning all right, title and interest in and 
to all assets of the Company to a newly-formed holding company (“Newco”) 
established by SLS and Hawk, in satisfaction of the SLS Notes and the Hawk 
Notes.91 
 
86 Disposition, Merriam-Webster, https://www.merriam-webster.com/dictionary/disposition (last 
visited Apr. 19, 2022). 
87 
Disposition, 
The 
American 
Heritage 
Dictionary, 
https://www.ahdictionary.com/word/search.html?q=disposition (last visited Apr. 19, 2022). 
88 
Disposition, 
Cambridge 
Dictionary, 
https://dictionary.cambridge.org/us/dictionary/english/disposition (last visited May 27, 2022). 
89 Disposition, Collins, https://www.collinsdictionary.com/us/dictionary/english/disposition (last 
visited May 27, 2022). 
90 Disposition, Ballentine’s Law Dictionary (3d ed. 2010).  
91 A136 (Omnibus Agreement WHEREAS clause) (emphasis added).   
30 
 
 
Further, Section 1.1(a) of the Omnibus Agreement provides:   
 
Each of SLS and Hawk shall agree to stay the [f]oreclosure and satisfy and 
extinguish, in their entirety, the SLS Notes and the Hawk Notes, respectively 
(collectively, the “Discharged Indebtedness”), upon the Company’s 
immediate conveyance, transfer, delivery and assignment, of all right, title 
and interest of the Company in, to or under all of the rights, properties and 
assets of the Company (including those of any direct or indirect subsidiary of 
the Company) of every kind and description, wherever located, real, 
personal, or mixed, tangible or intangible, to the extent owned, leased, 
licensed, used or held for use in or relating to the business, as the same shall 
exist on the date hereof, to Newco, including, but not limited to, all right, title 
and interest of the Company (or any direct or indirect subsidiary of the 
Company) in, to and under the assets listed or described below (the 
“Transferred Assets”)[.]”92 
 
An assignment of all rights, title and interest in the assets of the Company to Newco 
is a “disposition” because it is a type of transfer or relinquishment of property.  Dictionary 
definitions of “assignment” reinforce this conclusion.  Black’s Law Dictionary defines 
“assignment” as:  “[t]he transfer of rights or property.”93  Merriam-Webster defines 
“assignment” as:  “the transfer of property especially:  the transfer of property to be held 
in trust or to be used for the benefit of creditors.”94  The American Heritage Dictionary 
defines “assignment” to mean:  “[t]he transfer of a claim, right, interest or property from 
one to another.”95  Thus, “disposition” includes the assignment of Stream’s assets to Newco 
(SeeCubic) under the Omnibus Agreement, thereby triggering the Class B Vote Provision.   
 
92 A137 (Omnibus Agreement § 1.1(a)) (emphasis added).   
93 Assignment, Black’s Law Dictionary (11th ed. 2019).   
94 Assignment, Merriam-Webster, https://www.merriam-webster.com/dictionary/assignment (last 
visited May 10, 2022) (emphasis in original).   
95 
Assignment, 
The 
American 
Heritage 
Dictionary, 
https://ahdictionary.com/word/search.html?q=assignment (last visited May 10, 2022).   
31 
 
Further, the assignment of all rights, title, and interest in Stream’s assets is a 
“disposition” because it effects a “relinquishing of property” in consideration for a 
resolution, settlement, or determination of certain claims.  For example, Section 1.2 of the 
Omnibus Agreement provides:   
1.2 Dismissal of Lawsuit and Foreclosure Action  
In consideration of the Transactions contemplated by Section 1.1 of this 
Agreement and such other agreements as made be made [sic] among the 
parties hereto and upon consummation thereof, (i) the Investors hereby 
irrevocably agree to forbear from including any claims against the Company 
or any of the Transferred Assets as part of the Lawsuit, and (ii) each of the 
SLS and the Company agree to dismiss their applicable claims or responses 
in the Foreclosure Action.96    
 
Transferring assets in consideration for resolving or settling certain claims falls within the 
common dictionary definitions of “disposition” set forth above.  Thus, the transactions set 
forth in the Omnibus Agreement unambiguously effect a “disposition” as that term is 
commonly used.  
SeeCubic disagrees, and argues that the term “other disposition” in this context is 
limited by the concept of nonscitur a sociis, a canon of construction that suggests words 
grouped together in a list should be given related meaning in light of the words around it.97  
SeeCubic asserts that an “other disposition” must mean something akin to a “sale” or a 
“lease” and that it “does not unambiguously include a transfer of assets to secured creditors 
 
96 A140 (Omnibus Agreement § 1.2) (emphasis added).  Further, the recitals in the Omnibus 
Agreement (including the one quoted above) make clear that the agreement was intended to resolve 
the issues relating to Stream’s default on the SLS and Hawk notes.   
97 Answering Br. at 19 (“Here, the undefined term ‘other disposition’ is limited to a similar 
meaning as the terms ‘sale’ and ‘lease.’”). 
32 
 
in satisfaction of debt.”98  We disagree that “other disposition” is ambiguous.  Rather, as 
shown above, the plain meaning of “other disposition” includes the transactions 
contemplated in the Omnibus Agreement.  “When the contractual provision is clear and 
unambiguous, the court will give the provision’s terms their plain meaning.”99     
If any of the canons of construction applied, it would be the “elementary canon of 
contract construction” where “the intent of the parties must be ascertained from the 
 
98 Id.  SeeCubic also argues that if “‘other disposition’ were intended to encompass all dispositions 
of Stream’s assets without limitation, the terms ‘sale’ and ‘lease’–which are dispositions—would 
be superfluous.”  Id. at 20. 
99 E.I. du Pont de Nemours & Co., 711 A.2d at 57 (citing Hallowell v. State Farm Mut. Auto. Ins. 
Co., 443 A.2d 925, 926 (Del. 1982)).  See BlackRock Credit Allocation Income Tr., 224 A.3d at 
977 (“Under the applicable interpretation rules, if the bylaw’s language is unambiguous, the court 
need not interpret it or search for the parties’ intent.”); see also Norton v. K-Sea Transp. Partners 
L.P., 67 A.3d 354, 365 n.56 (Del. 2013) (“[W]hile we will construe an ambiguous partnership 
agreement against the drafter under the contra proferentem doctrine, that doctrine only applies if 
the partnership agreement is ambiguous.” (citing SI Mgnt. L.P. v. Wininger, 707 A.2d 37, 43 
(Del.1998))); Rubick v. Sec. Instrument Corp., 766 A.2d 15, 18 (Del. 2000) (“If the statute is 
unambiguous, there is no room for interpretation, and the plain meaning of the words controls.” 
(Ingram v. Thrope, 747 A.2d 545, 547 (Del. 2000))); Grand Ventures, Inc. v. Whaley, 632 A.2d 
63, 66 (Del. 1993) (“Where the intent of the legislature is clearly reflected by unambiguous 
language in the statute, the language itself controls.” (quoting  Spielberg v. State, 558 A.2d 291, 
293 (Del. 1989))); Norman J. Singer & Shambie Singer, 2A Sutherland Statutes and Statutory 
Construction § 46:4 (7th ed.), Westlaw SUTHERLAND (database updated Nov. 2021) (“If a court 
does find that a statute is not clear and unambiguous, then it may look to a wide variety of intrinsic 
and extrinsic sources to discover the meaning of legislative language, including the maxims 
expressio unius est exclusio alterius, ejusdem generis, and noscitur a sociis, as well as legislative 
history . . . .” (footnote omitted)).  In any event, our interpretation of the term “other disposition” 
respects the noscitur a sociis canon because it treats disposition, sale, and lease similarly—mainly 
as methods of transferring and assigning the right to use or own an asset.  By specifying that “other 
disposition[s]” of assets would trigger the Class Vote Provision, the drafters made clear that 
“sale[s]” and “lease[s]” were themselves dispositions.    
33 
 
language of the contract.”100  Reading the agreement as a whole,101 other provisions within 
the Omnibus Agreement shed light on what the parties meant by “other disposition.”  We 
note, for example, that the Charter’s definition of “Transfer” as it pertains to Class B Voting 
Stock, defines “Transfer” as:    
any sale, assignment, transfer, conveyance, hypothecation or other transfer 
or disposition of such share or any legal or beneficial interest in such share, 
whether or not for value and whether voluntary or involuntary or by 
operation of law; provided, however, that the following shall not be 
considered a “Transfer”: (x) the granting of a proxy to officers or directors 
of the Company at the request of the Board of Directors of the Company in 
connection with actions to be taken at an annual or special meeting of 
stockholders, or (y) entering into a voting trust, agreement or arrangement 
(with or without granting a proxy) with the Founders.102   
 
This definition reinforces that any assignment, transfer, conveyance, or hypothecation of 
the Class B shares is a “disposition” of such share, whether or not in value and whether or 
not voluntary or involuntary. 
One could argue that the definition of “Transfer” provided above shows that the 
drafters knew how to ensure that specific types of transfers would pertain to dispositions 
of Class B stock.  It follows that one may find it significant that these events are not also 
specifically addressed in the context of transactions involving corporate assets, particularly 
 
100 E.I. du Pont de Nemours & Co., 711 A.2d at 56 (quoting Citadel Holding Corp. v. Roven, 603 
A.2d 818, 822 (Del. 1992)).  See Cox Commc’ns Inc., 2022 WL 619700, at *5 (explaining that this 
Court reviews “questions of contract interpretation de novo, with the objective of determining the 
intent of the parties from the language of the contract” (footnote omitted) (citing Exelon 
Generation Acquisitions, LLC, 176 A.3d at 1267)). 
101 See Glaxo Grp. Ltd. v. DRIT LP, 248 A.3d 911, 918 n.28 (Del. 2021) (“Delaware courts ‘read 
a contract as a whole and . . . give each provision and term effect, so as not to render any part of 
the contract mere surplusage[.]’” (quoting Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159 
(Del. 2010))). 
102 A131 (Charter § IV.D.6(a)(iv)) (emphasis added). 
34 
 
in the definition of Asset Transfer.  However, the terms in the more expanded “Transfer” 
definition dealing with transfers of Class B Voting stock are entirely consistent with the 
plain meaning and common definitions of “disposition.” 103  Reading the provisions as a 
whole, we see no inconsistency in these provisions and in construing “other disposition” 
to plainly encompass the contemplated transfer and assignment of Stream’s assets for the 
benefit of its creditors in furtherance of a resolution of certain claims.104   
B. There Is No Common Law “Board-Only” Insolvency Exception to Section 271. 
 
 
We have concluded that the Omnibus Agreement unambiguously contemplates a 
transaction constituting an “Asset Transfer” triggering the Class Vote Provision.  We 
clarify a final point, namely, whether there exists today an insolvency exception to Section 
271.  We conclude that any such exception that might have existed has been superseded.   
 
The Vice Chancellor engaged in a thoughtful analysis of the common law pre-dating 
the enactment of Section 271 and its predecessor.  Relying primarily on some treatises and 
 
103 See Alta Berkeley VI C.V., 41 A.3d at 385–86 (“[I]t is well established that a court interpreting 
any contractual provision, including preferred stock provisions, must give effect to all terms of the 
instrument, must read the instrument as a whole, and, if possible, reconcile all the provisions of 
the instrument.” (quoting Elliott Assoc., L.P. v. Avatex Corp., 715 A.2d 843, 854 (Del. 1998))); 
see also Manti Holdings, LLC v. Authentix Acquisition Co., Inc., 261 A.3d 1199, 1208 (Del. 2021) 
(“When interpreting a contract, Delaware courts read the agreement as a whole and enforce the 
plain meaning of clear and unambiguous language.” (citing Osborn, 991 A.2d at 1159–60)). 
104 We are mindful that an overly broad reading of the phrase “other disposition” could render 
certain exceptions within the definition of “Acquisition” superfluous, if these exceptions were read 
to fall into the catch-all definition of Asset Transfer.  For example, the term “disposition” likely 
does not encompass “(x) any consolidation or merger effected exclusively to change the domicile 
of [Stream],” or “(y) any transaction or series of transactions principally for bona fide equity 
financing purposes in which cash is received by [Stream] or any successor or indebtedness of 
[Stream] is canceled or converted or a combination thereof.”  A126 (Charter § IV.D.4(b)(i)).   
Otherwise, these exceptions would be rendered meaningless.  Therefore, the phrase “other 
disposition” must have some limits.  However, we need not attempt to delineate what they are.   
35 
 
case law from other jurisdictions, the court determined that a board-only insolvency 
exception existed, despite the lack of any precedent in Delaware.  These authorities ranged 
in date from 1926 to 1948, with no case cited after 1948 upholding such an exception.     
 
In its P.I. Opinion, the Court of Chancery cited the following treatises: 
• 1 Charles Fisk Beach, Jr., Company Law:  Commentaries on the Law of 
Private Corporations §§ 357, 358 (1891) (For “a failing company the rule 
is different, and sale of the whole property may be made by the 
directors.”);105 
 
• Thomas Conyngton & R.J. Bennett, Corporation Procedure 232 (rev. ed. 
1927) (footnote omitted) (“The directors may, however, without 
authorization of the stockholders, sell the corporate assets if necessary to 
pay the corporate debt, and they may, in the absence of statutory or other 
prohibitions, make an assignment for the benefit of creditors.”);106 
 
• Henry Winthrop Ballantine, Ballantine on Corporations § 281, at 667 
(1946) (footnote omitted) (“If a corporation is insolvent or in failing 
condition[,] the board of directors have authority to sell the entire assets 
in order to pay the debts and avoid the sacrifice of an execution sale[,] 
even without the vote or consent of the shareholders.  They may also 
make an assignment for the benefit of creditors or file a voluntary petition 
in bankruptcy.”);107 
 
• 1 R. Franklin Balotti & Jesse A. Finkelstein, The Delaware Law of 
Corporations & Business Organizations § 10.7 at 10–34 (3d ed. 1998 & 
2011 Supp.) (acknowledging a “failing business” exception to the 
common law general rule that directors have no authority to sell out the 
entire property of the corporation and terminate its business).108 
 
 
105 Stream TV, 250 A.3d at 1035.   
106 Id.  
107 Id.   
108 Id. at 1036.  In its Modification Opinion, the Court of Chancery supplemented this list with 
citations to the Cook, Purdy and later Noyes and Cox & Hazen treatises discussed herein.  See 
Stream TV, 2021 WL 5816820, at *8–9, 11. 
36 
 
The Court of Chancery cited six cases from other jurisdictions,109 and two Delaware 
cases, namely, Butler v. New Keystone Copper Co., a case from 1915, and Allied Chemical 
& Dye Corp. v. Steel & Tube Co., a case from 1923.110   In Butler, the Court of Chancery 
confronted a litigation involving a sale of assets that occurred prior to the enactment of any 
statute addressing a sale of assets.  Chancellor Curtis stated that 
the general rule as to commercial corporations seems to be settled that neither 
the directors nor the stockholders of a prosperous, going concern have power 
to sell all, or substantially all, the property of the company if the holder of a 
single share dissent.  But if the business be unprofitable, and the enterprise 
be hopeless, the holders of a majority of the stock may, even against the 
dissent of the minority, sell all the property of the company with a view to 
winding up the corporate affairs.111 
 
Butler bases its holding on the majority exception to the general rule requiring stockholder 
unanimity and does not address a board-only insolvency exception. 
 
The court then cited Allied Chemical for the proposition that, when Section 271 was 
enacted, the General Assembly did not intend to govern a transfer of assets by a failing 
firm.112  Specifically, the court stated that “[t]he General Assembly enacted the statutory 
predecessor to Section 271 to make clear that the board of directors of a corporation, with 
 
109 See Stream TV, 250 A.3d at 1035 (citing City Nat. Bank v. Fuller, 52 F.2d 870, 872–73 (8th Cir. 
1931); Autauga Coop. Leasing Ass’n v. Ward, 250 Ala. 229, 33 So. 2d 904, 906 (1948)); Sherrard 
State Bank v. Vernon, 243 Ill. App. 122, 128 (Ill. App. Ct. 1926); Oskaloosa Sav. Bank v. Mahaska 
Cnty. State Bank, 205 Iowa 1351, 219 N.W. 530, 533 (1928); Candor v. Mercer Cnty. State Bank, 
257 Ill. App. 192, 197–98 (Ill. App. Ct. 1930); Howard v. Republic Bank & Tr. Co., 76 S.W.2d 
187, 191 (Tex. Civ. App. 1934). 
110 See id. at 1036–37 (citing Butler, 93 A. 380; Allied Chem. & Dye Corp. v. Steel & Tube Co. of 
Am., 120 A. 486 (Del. Ch. 1923)). 
111 Butler, 93 A. at 382; Stream TV, 250 A.3d at 1036. 
112 Stream TV, 250 A.3d at 1041.  
37 
 
the approval of a majority of its stockholders, could sell all of the firm’s assets, even if the 
corporation was profitable and solvent.”113  According to the court, because the common 
law did not prohibit the board of directors of an insolvent or failing firm from transferring 
its assets to creditors, “the General Assembly did not need to establish that point by 
statute.”114  
We have independently surveyed the law, and we concur that the weight of treatise 
authority, supported by cases from various states, supports the existence, at least in the 
early part of the twentieth century, and at least in certain jurisdictions, of certain common-
law rules governing sales of all assets, including the following: 
• If a corporation is solvent and profitable, then a sale of all assets requires 
unanimous approval by all stockholders. 
• If a corporation is solvent but unprofitable and without prospect of 
becoming profitable, then a sale of all assets may be made with the 
approval of a majority of the stockholders. 
• If a corporation is insolvent, then a sale of all assets may be made by the 
directors without stockholder approval. 
At least five treatises, published before the Delaware General Assembly’s enactment of 
Section 271’s predecessor in 1917, support the existence of these rules. 
First, Charles Fisk Beach, in his 1891 treatise, states that, “a majority of the 
shareholders of a prosperous corporation can not sell out the property and invest in other 
 
113 Id. (citing Allied Chem., 120 A. at 490). 
114 Id. 
38 
 
enterprises against the wishes of the minority.”115  He observes that, “in [the] case of a 
failing company the rule is different, and sale of the whole property may be made by the 
directors.”116  
Second, an 1898 treatise by William W. Cook states that “[n]either the directors nor 
a majority of the stockholders have power to sell all the corporate property as against the 
dissent of a single stockholder, unless the corporation is in a failing condition.”117  
Arguably this passage supports the existence of the board-only exception by negative 
implication.  The 7th edition of Cook’s treatise (published in 1913) cites Common Sense 
Mining & Milling Co. v. Taylor with approval,118 in which the Missouri Supreme Court 
held that a “corporation being in failing circumstances, the directors had the legal right to 
dispose of its assets to pay its debts.”119 
Third, a 1905 treatise, authored by James Hart Purdy, repeats that a majority of the 
shareholders of a prosperous corporation cannot sell against the wishes of the minority, but 
that in the case of a failing company, the sale may be made by the directors.120  
 
115 1 Charles Fisk Beach, Jr., Company Law: Commentaries on the Law of Private 
Corporations § 357, at 582 (1891). 
116 Id. 
117 William W. Cook, A Treatise on the Law of Corporations Having a Capital Stock § 670, at 
1337 (4th ed. 1898) (emphasis omitted). 
118 William W. Cook, A Treatise on the Law of Corporations Having a Capital Stock § 670, at 
2604 n.2 (7th ed. 1913). 
119 Common Sense Mining & Milling Co. v. Taylor, 247 Mo. 1, 152 S.W. 5, 10–11 (1912).  
120 James Hart Purdy, Treatise on the Law of Private Corporations § 830, at 1243–44 (1905).  
Purdy does not cite Beach.  Purdy does add two additional case citations, namely, Miners’ Ditch 
Co. v. Zellerbach, 37 Cal. 543, 99 Am. Dec. 300 (1869); Bartholomew v. Derby Rubber Co., 69 
Conn. 521, 38 A. 45 (1897).  
39 
 
Fourth, the 1909 treatise by Thompson & Thompson states that at common law, 
“neither the directors nor the majority of the stockholders of a prosperous corporation, able 
to achieve the objects of its creation, had power to sell or otherwise dispose of all the 
property without the unanimous consent of all stockholders.”121  But this treatise notes that 
the majority of stockholders may dispose of all the corporate property “where the 
continuation of the business would be at a loss and where there was no prospect or hope 
that the enterprise could be made profitable.”122  The treatise further explains that the board 
may dispose of all the corporate property when “by reason of its embarrassed or insolvent 
condition[, the corporation] is unable either to pay its debts or to secure capital and funds 
for the further prosecution of its enterprise,” especially where creditors are pressing their 
claims and threatening litigation.123 
Fifth, according to a 1909 treatise by Walter Chadwick Noyes, “[t]he general rule 
that a majority cannot sell the entire assets of a prosperous corporation is based upon the 
principle that a majority cannot control corporate powers to defeat corporate purposes.”124  
The treatise distinguishes between a “losing” corporation – one in which “the further 
prosecution of the business of the corporation would be unprofitable”125 – and an insolvent 
 
121 3 Seymour D. Thompson & Joseph W. Thompson, Commentaries on the Law of Private 
Corporations § 2421, at 342 (2d ed. 1909).  
122 Id. § 2424, at 345. 
123 Id. § 2418, at 336. 
124 Walter Chadwick Noyes, A Treatise on the Law of Intercorporate Relations § 111, at 210 (rev. 
2d ed. 1909). 
125 Id. at 211. 
40 
 
corporation.  Because the disposal of all the assets of a losing corporation furthers the 
corporate purpose, the treatise notes that it may be accomplished by a majority of the 
stockholders.126  The directors, on the other hand, are “equally without implied authority 
to wind up [a corporation’s] affairs and dispose of its assets” in a solvent corporation and 
in a “losing, but not insolvent, corporation.”  As the treatise explains, in a losing 
corporation, the transfer of all assets “involves primarily the relations between a 
corporation and its stockholders.”127  But in an insolvent corporation, such transfer is a 
matter of “the relations between a corporation and its creditors.”128  “In the absence of a 
controlling statute or by-law of the corporation, the directors have power to authorize an 
assignment of the property of an insolvent corporation for the benefit of its creditors.”129 
Two later treatises also acknowledge the existence of a board-only insolvency 
exception.  First, Ballantine on Corporations (1946) states that “[i]f a corporation is 
insolvent or in failing condition[,] the board of directors have authority to sell the entire 
assets in order to pay the debts and avoid the sacrifice of an execution sale even without 
the vote or consent of the shareholders.”130   
Ballantine observes that under statutes adopted in more than forty states, “a 
 
126 Id. 
127 Id. § 112, at 212. 
128 Id. at 213 (“The assignment of property by an insolvent corporation for the purpose of paying 
its debts is a very different action from so disposing of its property while solvent as to make its 
continued exercise of its franchises impossible.” (citing Vanderpoel v. Gorman, 140 N.Y. 563, 
568, 35 N.E. 932, 934 (1894))).   
129 Id.   
130 Henry Winthrop Ballantine, Ballantine on Corporations § 281, at 667 (1946). 
41 
 
prosperous and going [concern] corporation may with the vote or consent of its board of 
directors and two-thirds of its voting shareholders or some other specified majority, sell 
and convey all or substantially all [of] its property rights.”131  These provisions were 
adopted to relax the strict common law unanimity rule.  “Some of these statutory 
requirements apply even though the corporation is insolvent, particularly if the sale is made 
for the purpose of reorganization and continuance of the business in another corporation 
rather than for the purpose of liquidation.”132  However, “[i]n other states expressly or by 
implication the requirements of such a statute are held not to apply to insolvent 
corporations.”133   
Second, Cox and Hazen’s Treatise on the Law of Corporations states that, “[i]f a 
corporation is insolvent or in failing condition, the common law recognizes the authority 
of the board of directors to sell the entire assets without the vote or consent of the 
shareholders in order to pay the debts of the corporation and avoid the sacrifice of an 
execution sale.  The directors may also make an assignment for the benefit of creditors or 
file a voluntary petition in bankruptcy.”134 
Cases from at least fifteen states, from the late 1800’s to the early 1900’s, support 
 
131 Id. § 282, at 668.   
132 Id. Notably, Ballantine observes that, “if the purpose of a sale is [a] reorganization or 
recapitalization as contrasted with liquidation and dissolution, that class voting should be required 
as much as in [the] case of merger or consolidation.”  Id. at 669.   
133 Id. at 668.  See also infra note 171 (citing Fletcher noting that courts in different jurisdictions 
vary on whether such statutory provisions have altered the common law rules for corporations in 
financial distress).   
134 4 James D. Cox & Thomas Lee Hazen, Treatise on the Law of Corporations § 22:4 (3d ed., rev. 
Dec. 2021), available at Westlaw (Dec. 2021 update) (footnote omitted). 
42 
 
the existence of the board-only insolvency exception in those jurisdictions during that time:  
Alabama,135 California,136 Connecticut,137 Illinois,138 Indiana,139 Iowa,140 Massachusetts,141 
 
135 Autauga Coop. Leasing Ass’n, 33 So. 2d at  906 (Prior to passage of a state statute in 1911, if 
corporation was “insolvent or in failing condition, the directors or a majority of its stockholders 
could sell all its property without any special procedure.”); Chamberlain v. Bromberg, 83 Ala. 
576, 581, 3 So. 434, 435 (1888) (“We think it too clear to admit of discussion, unless our statutes 
after noticed have made a change, that the Alabama Insurance Company, being unable to meet its 
debts, had the power to make an assignment for the benefit of its creditors, if done in good faith; 
that the board of directors, as its governing body, was the proper authority to execute that power . 
. . .”). 
136 Miners’ Ditch Co., 37 Cal. at 593 (citing with approval Sargent v. Webster, 54 Mass. 497, 498 
(1847)). 
137 Mills v. Tiffany’s, 123 Conn. 631, 640, 198 A. 185, 189 (1938) (noting that a statute requiring 
approval by vote of two-thirds of the stockholders was inapplicable to “a sale of all its assets by a 
corporation which is insolvent or in failing circumstances made for the purpose of closing up its 
affairs” (citing Bassett v. City Bank & Tr. Co., 116 Conn. 617, 165 A. 557 (1933))); Chase v. 
Tuttle, 55 Conn. 455, 12 A. 874, 875–76 (1888) (upholding directors’ assignment of an insolvent 
corporation’s assets for the benefit of creditors).  The court in Mills suggested that the insolvency 
exception would not apply if the purpose of the sale was the continuation of the business in another 
corporation and not the bona fide winding up of its business.  Mills, 198 A. at 189.  
138 Candor, 257 Ill. App. at 197–98 (“The general rule is that where a business is in a failing 
condition and has become financially involved and insolvent, and the creditors are pressing their 
claims, the directors may dispose of the assets without the sanction of the stockholders, when it is 
deemed of imperative necessity.” (citing Oskaloosa Sav. Bank, 219 N.W. at 530)). 
139 De Camp v. Alward, 1876 WL 6785, at *3 (Ind. May 1, 1876) (Assignment for the benefit of 
creditors “may be made by the board of directors, without the express authority or consent of the 
stockholders.” (citing Dana v. Bank of U.S., 1843 WL 5023 (Pa. Jan. 1, 1843))).   
140 Oskaloosa Sav. Bank, 219 N.W. at 533 (“[I]t is an exception to the general rule that where a 
business is in a failing condition and has become financially involved and insolvent, and the 
creditors are pressing their claims, the power of the directors to alienate the property is conceded 
where it is regarded as of imperative necessity.”).  
141 Sargent, 54 Mass. at 497 (“The directors of an insolvent manufacturing corporation have 
authority to convey all the property of the corporation to one of its creditors, upon condition that 
he shall apply the property to the payment of his claim, and pay over the surplus, if any, to the 
treasurer of the corporation.”); In re E.T. Russell Co., 291 F. 809, 816 (D. Mass. 1923) 
(Assignment of all assets to creditor for payment of debts “is something the directors have power 
to do[,]” and also stating that a “sale” does not include an assignment for the benefit of creditors 
and, thus, “the powers of the corporation to execute assignments for the benefit of creditors are 
not conferred by law upon the stockholders.”). 
43 
 
Michigan,142 Minnesota,143 Missouri,144 Montana,145 New York,146 Pennsylvania,147 
 
142 Boynton v. Roe, 114 Mich. 401, 407, 72 N.W. 257, 259 (1897) (“It is well settled in this state 
than an insolvent corporation has the right to make a general assignment of its property for the 
benefit of its creditors, unless prohibited by its charter or a statute of the state.  The directors may 
make such assignment for the benefit of creditors without the assent of the stockholders.” (citation 
omitted)).  But see Michigan Wolverine Student Coop. v. Wm. Goodyear & Co., 314 Mich. 590, 
600, 22 N.W.2d 884, 888 (1946) (“We are not in accord with the proposition that in this State the 
directors of a domestic corporation may sell all or substantially all of the assets of the corporation 
without the consent or approval of the holders of a majority of the shares, on the ground that the 
corporation was ‘in financial distress’ or ‘in a failing condition.’”). 
143 Tripp v. Northwestern Nat’l Bank, 41 Minn. 400, 403, 43 N.W. 60, 61 (1889) (“The weight of 
authority seems to be in favor of the proposition that the board of directors of a corporation to 
which the general management of its affairs is committed, without particular restriction, may 
authorize a general assignment of the corporate property to be made for the benefit of creditors 
when the condition of its affairs is such as to reasonably justify such a course, as in the case of 
insolvency.”). 
144 Common Sense Mining & Milling Co., 152 S.W. at 10–11 (“The corporation being in failing 
circumstances, the directors had the legal right to dispose of its assets to pay its debts.”); Calumet 
Paper Co. v. Haskell Show-Printing Co., 144 Mo. 331, 45 S.W. 1115, 1115 (1898) (“Where there 
is nothing in the charter or by-laws of an insolvent corporation prohibiting it, the board of directors 
of such a corporation may make an assignment of its property for the benefit of its creditors.” 
(citing Chew v. Ellingwood, 1885 WL 7913, at *2 (Mo. Apr. 1, 1885); Descombes v. Wood, 91 
Mo. 196, 4 S.W. 82, 85 (1887)); Hutchinson v. Green, 91 Mo. 367, 1 S.W. 853, 855 (1886) 
(“[W]hen the corporation becomes crippled, and unable to meet its obligations in the usual course 
of business, it is competent for the directors to make an assignment, and this they may do without 
the consent of the stockholders.”); Chew, 1885 WL 7913, at *7 (“The right of the directors of a 
bank in failing circumstances to make an assignment for the benefit of creditors, where there is 
nothing in the charter or general laws forbidding it, we think, is clear.”).  
145 Wortman v. Luna Park Amusement Co., 61 Mont. 89, 201 P. 570, 571 (1921) (“To summarize 
some of the rules of common law so far as applicable to the instant case, a solvent and prosperous 
corporation could sell all of its assets only by unanimous consent of its stockholders; if insolvent 
and unable to execute the purposes of its creation, by the directors if the best interests of the 
stockholders demanded; in the proper pursuit of its business, and within the purposes of its 
creation, sell any or all assets even against the dissent of a minority or perhaps a majority of its 
stockholders.” (emphasis added)). 
146 Vanderpoel, 140 N.Y. at 576 (“The corporation had the power to make an assignment.  It was 
a corporate act and neither the statute nor any by-law, so far as the record shows, provided that it 
should be otherwise done than by the president and secretary or treasurer, under the authority of 
the board of directors.”). 
147 Ardesco Oil Co. v. N. Am. Oil & Mining Co., 66 Pa. 375, 382, 1871 WL 10959, at *6 (Pa. Jan. 
3, 1871) (“[A]n insolvent corporation may make a general assignment for the benefit of its 
44 
 
Texas,148 and Wisconsin.149  Some authorities that reject the board-only insolvency 
exception do so on the basis of state statutes.150 
Yet no Delaware case expressly addresses or adopts the board-only insolvency 
exception.151  The closest Delaware came to addressing the exception was in Butler v. New 
Keystone Copper Co.152  Although the Chancellor in Butler did not mention the board-only 
exception, he did cite two treatises that generally acknowledged the exception:  Thompson 
 
creditors, and this power may be exercised by the directors, unless special provision to the contrary 
is made in the charter[.]” (citing Dana, 1843 WL 5023, at *8). 
148 Birmingham Drug Co. v. Freeman, 15 Tex. Civ. App. 451, 454, 39 S.W. 626, 628 (1897) (“[A]n 
insolvent corporation may make a general assignment for the benefit of its creditors, and this may 
be exercised by the directors, or under their authority.”). 
149 Goetz v. Knie, 103 Wis. 366, 79 N.W. 401, 402 (1899) (acknowledging cases where “it was 
held that the board of directors of an insolvent corporation has power to make a voluntary 
assignment of all its property for the benefit of its creditors, without the authority or consent of its 
stockholders, unless restrained by its charter or other legal enactment.”). 
150 See, e.g., Kyle v. Wagner, 45 W. Va. 349, 32 S.E. 213, 214 (1898) (The court noted the existence 
of “numerous authorities” for the board-only insolvency exception but held that this rule was 
abrogated in West Virginia by statute providing for voluntary dissolution and windup of 
corporations by the stockholders instead of assignment of assets by directors.  Thus, the court held 
that the directors had no authority to direct the assignment of the entire property without the 
consent of the stockholders.).  
151 Although defendants raised the issue in Russell v. Morris, the Court of Chancery declined to 
address whether § 271 applied to “the sale of assets by a failing company facing an emergency 
situation” because it found that no emergency existed.  1990 WL 15618, at *4–5 (Del. Ch. Feb. 
14, 1990) (“Defendants also contend that the transaction is valid and Russell’s motion must be 
denied because § 271 does not apply to a sale of assets by a failing company facing an emergency 
situation.  Even assuming such an exception exists under our law, I need not address it here because 
the facts clearly indicate that no emergency requiring three hours notice of a board meeting 
existed.”), appeal refused, 577 A.2d 754, 1990 WL 84682 (Del. 1990) (ORDER). 
152 Butler, 93 A. 380. 
45 
 
& Thompson’s Commentaries on the Law of Private Corporations and Cook’s A Treatise 
on the Law of Corporations Having a Capital Stock.153   
 Both Butler and Allied addressed circumstances under which a corporation could 
sell its assets with majority stockholder approval.  We understand the Vice Chancellor’s 
response, set forth in his final opinion in this matter, namely, that if a sale of assets obtained 
majority stockholder approval, “then the court did not need to address whether the 
corporation’s condition was sufficiently dire that the directors alone would have had 
authority to effectuate the sale.”154  But we note that in Allied Chemical, Chancellor 
Wolcott observed that Section 64(a), the predecessor to Section 271(a), “remains in the law 
to-day [sic] and fixes in statutory form the rule imposed on all corporations organized 
under the general act by which they are to be governed whenever the question of the sale 
of their entire assets is under consideration.”155   
Therefore, Butler and Allied Chemical can also be read to suggest that Section 271’s 
predecessor provided the only default rule and did not save room for a “board only” 
insolvency exception for transactions otherwise falling within the statute’s ambit.  We think 
this is the better view.  For one thing, given the complete absence of any Delaware case 
support, it is not entirely clear that the exception was ever adopted in Delaware in the first 
 
153 Butler cites to Sections 2471 and 2424 of the Thompson & Thompson treatise.  However, the 
reference to the board-only exception is in Section 2429 which the court in Butler did not cite.  
154 Stream TV, 2021 WL 5816820, at *8.  The Vice Chancellor acknowledged that “Butler did not 
specifically involve the insolvency-based exception that permits directors to sell all of a 
corporation’s assets without stockholder approval.”  Id. at *10.  This was also true of Geddes v. 
Anaconda Copper Mining Co., 254 U.S. 590, 595–96 (1921).   
155 Allied Chem., 120 A. at 490 (emphasis added). 
46 
 
place.  It follows, that before addressing whether a statute supersedes the common law, it 
must be established that the exception was indeed part of the common law in that 
jurisdiction.156  Ascertaining the initial question of what the common law is often is not an 
easy task.157  Stream argues that Delaware chose to adopt a majority vote exception instead 
of an insolvency exception.158  It argues that our General Assembly then codified the 
majority exception set forth in Butler in Section 64a.   
 
156 It is a fundamental principle of State sovereignty that the common law decisions of some 
jurisdictions are merely persuasive authority in the law of another jurisdiction until that State’s 
courts adopt it.  See, e.g., Casey v. Beeker, 321 So. 3d 662, 670 (Ala. 2020) (concurring opinion) 
(discussing how treatises are only persuasive authority, may differ in applicability by jurisdiction, 
and can vary in persuasiveness based on the relevance and age of the source); Blumenthal v. 
Brewer, 2016 IL 118781, ¶ 82, 69 N.E.3d 834, 859 (“[D]ecisions from other state courts and 
secondary sources are not binding on [the Supreme Court of Illinois] . . . .”); Cadillac Rubber & 
Plastics, Inc. v. Tubular Metal Sys., LLC, 331 Mich. App. 416, 425, 952 N.W.2d 576, 581 n.2 
(2020) (“Treatises are not binding authority but may be considered persuasive.” (citing Fowler v. 
Doan, 683 N.W.2d 682, 686 (Mich. Ct. App. 2004))).  See generally A. W. B. Simpson, The Rise 
and Fall of the Legal Treatise: Legal Principles and the Forms of Legal Literature, 48 U. Chi. L. 
Rev. 632, 676 (1981) (“From the beginning, the treatise in America had to contend with the 
considerable number of different jurisdictions in which the law was administered, each state 
potentially possessing its own common law.  This obviously presented an obstacle to the exposition 
of a universal common law by the text writers.”).  
157 This is evidenced by the painstaking work done by the American Law Institute in formulating 
the various Restatements of the Law.  For example, as the recent draft of the Restatement of the 
Law of Corporate Governance, Tentative Draft No. 1 (April 2022) notes at its outset that 
Restatements “aim at clear formulations of the common law . . . ,” and that the Restatement process 
seeks first to “ascertain the nature of the majority rule.”  Id. at x.  “If most courts faced with an 
issue have resolved it in a particular way, that is obviously important to the inquiry.”  Id.  The draft 
further observes that: 
Like a Restatement, the common law is not static.  But for both a Restatement and 
the common law the change is accretional.  Wild swings are inconsistent with the 
work of both a common-law judge and a Restatement.  And while views of which 
competing rules lead to more desirable outcomes should play a role in both 
inquiries, the choices generally are constrained by the need to find support in 
sources of law.   
Id. at x–xi (emphasis added). 
158 Opening Br. at 31–34.  
47 
 
Even if we were to determine that a board-only insolvency exception was part of 
our common law at one time, the pivotal question is whether it survived the enactment of 
Section 64a.  As explained below, we do not believe it did, assuming, arguendo, it existed.     
In 1917, the Delaware General Assembly responded to Butler’s affirmation of the 
common law unanimity rule by enacting Section 64a.  This section superseded the common 
law rule requiring unanimous consent to the sale, lease or exchange of all the property and 
assets of the corporation.  Instead, it provided for a majority vote of the outstanding stock: 
Every corporation organized under the provisions of this chapter, may at any 
meeting of its board of directors, sell, lease or exchange all of its property 
and assets, including its good will and its corporate franchises, upon such 
terms and conditions as its board of directors deem expedient and for the best 
interests of the corporation, when and as authorized by the affirmative vote 
of the holders of a majority of the stock issued and outstanding having voting 
power given at a stockholders’ meeting duly called for that purpose, or when 
authorized by the written consent of a majority of the holders of the voting 
stock issued and outstanding, provided, however, that the certificate of 
incorporation may require the vote or written consent of a larger proportion 
of the stockholders.159 
When Delaware comprehensively revised its General Corporation Law in 1967, 
Section 64a was renumbered Section 271(a), and language was added to clarify that the 
provision covered sales, leases, or exchanges of “substantially all” assets and that 
permissible consideration included “money or other property.”160  The General Assembly 
 
159 29 Del. Laws ch. 113, § 17 (1917).  Section 64a was amended in 1925 to replace the phrase “a 
majority of the holders” with “the holders of a majority” and “a larger proportion of the 
stockholders” with “a larger proportion of the stock issued and outstanding.”  34 Del. Laws ch. 
112, § 13 (1929).  In 1929, the statute was amended again to allow the consideration to include 
“shares of stock in, and/or other securities of, any other corporation or corporations.”  36 Del. 
Laws ch. 135, § 19 (1925). 
160 56 Del. Laws ch. 50, § 271 (1967).  
48 
 
also added Section 272.161  Section 272 clarified that Section 271 does not apply to 
mortgages or pledges of corporate assets.162  The Delaware General Corporation Law 
Revision Committee, the group tasked with drafting the comprehensive revisions, 
considered adding a specific exception for sales in the ordinary course of a corporation’s 
business, but ultimately decided not to do so.163   Other provisions were eliminated as 
unnecessary or redundant.164            
 
161 56 Del. Laws ch. 50, § 272 (1967); see 8 Del. C. § 272. 
162 3 Robert S. Saunders, Allison L. Land, Jennifer C. Voss, & Cliff C. Gardner, Folk on the 
Delaware General Corporation Law § 272.01 (7th ed., 2022-1 Supp.); accord 1 R. Franklin Balotti 
& Jesse A. Finkelstein, Delaware Law of Corporations & Business Organizations § 10.1 (4th ed. 
2022-1 Supp.).     
163 See Samuel Arsht, Memorandum to the Corporation Law Revision Committee  on Folk Report 
on Proposed 1967 Amendments (Sept. 14, 1965) (“Folk points out many states and Model Act 
expressly dispense with stockholder approval for sales of all assets in usual course of business and 
for mortgages or pledges, unless charter requires it.  He suggests appropriate language to this effect 
at page 209.”); Minutes of the Twenty-Second Meeting of Delaware Corporate Law Study 
Committee (Sept. 14, 1965) (“Disapproved the recommendation with respect to sale of all assets 
in the course of business.”). 
164 For example, as the Vice Chancellor observed, prior to 1967, the DGCL contained a provision 
that authorized “[s]ales of the property and franchises” of a corporation “under a decree of Court 
. . . .”  Stream TV, 250 A.3d at 1038 (alteration in original).  That provision did not require either 
board approval or a stockholder vote to consummate a sale of assets to a secured creditor by decree.  
“As part of the 1967 revision, the General Assembly eliminated this provision,” likely because it 
is “unnecessary” given the rights afforded to secured creditors.  Id.  Section 271 was subsequently 
amended five times.  None of the amendments bears on this analysis.  57 Del. Laws ch. 148, § 30 
(1969) (Amended to remove the reference to stockholder approval by written consent, as this was 
made redundant by § 228, and to add that the notice to stockholders of a meeting to vote on a 
proposed transaction under § 271 must state that this is the purpose of the meeting.); 64 Del. Laws 
ch. 112, § 55 (1983) (adding a clause to cover non-stock corporation); 65 Del. Laws ch. 127, § 9 
(1985) (inserting “the holders of” into § 271(a) between “resolution adopted by” and “a majority 
of the outstanding stock”); 75 Del. Laws ch. 30, § 28 (2005) (adding subsection (c), which permits 
transfers of all or substantially all assets of a parent corporation to a wholly-owned subsidiary 
without a stockholder vote); 77 Del. Laws ch. 253, § 58 (2010) (As part of a comprehensive 
revision of the DGCL to address nonstock corporations, Section 271(a) was revised to provide 
that, in addition to members who are entitled to vote for the election of a nonstock corporation’s 
governing body, any other members given the right to vote on the sale of all or substantially all of 
49 
 
 
The Vice Chancellor concluded that Section 271 superseded only one aspect of the 
common law rule, namely, the unanimity requirement but “did not supersede the common 
law’s recognition that directors could sell the assets of an insolvent or failing firm without 
stockholder approval.”165  We disagree.  In A.W. Financial Services, S.A. v. Empire 
Resources, Inc.,166 this Court set forth the analysis we employ when determining whether 
the enactment of a statute has superseded the common law.167  We applied the following 
three-pronged inquiry: (1) does explicit language in the statute supersede or limit the 
common law; (2) does the statutory scheme evidence a legislative intent to occupy the field; 
and (3) does the statutory scheme actually conflict with the common law.168   
The plain language of Section 271 suggests the answer to the first two questions as 
Section 271 applies to “[e]very corporation . . . ,” and requires a vote by the holders of a 
majority of the corporation’s outstanding shares when their corporation engages in a sale, 
lease, or exchange of “all or substantially all of its property and assets.”169  The creation of 
Section 64a’s majority vote rule indisputably replaced the common law unanimity rule.170  
 
the corporation’s assets under the corporation’s certificate of incorporation or by-laws are also 
entitled to do so.). 
165 Stream TV, 2021 WL 5816820, at *13.   
166 981 A.2d 1114 (Del. 2009). 
167 Id. at 1123.  The concept of “‘[s]uperseder’ describes circumstances where a statute replaces or 
ousts (‘supersedes’) the common law.”  Id. at 1121.  See Cline v. Prowler Indus. of Maryland, Inc., 
418 A.2d 968, 977–78 (Del. 1980) (analyzing whether it was the General Assembly’s intent to 
supersede the doctrine of strict tort liability in cases involving a sale of goods when it adopted the 
Uniform Commercial Code). 
168 A.W. Fin. Servs., S.A., 981 A.2d at 1123.   
169 8 Del. C. § 271(a) (emphasis added). 
170 One might logically view the statute as a restriction, rather than expansion of stockholder rights.  
See Hollinger Inc. v. Hollinger Int’l, Inc., 858 A.2d 342, 376 (Del. Ch. 2004) (“The origins of § 
50 
 
The question is whether the rule’s exceptions were abrogated as well.  We think the better 
view is that, when the common law unanimity rule was superseded, so too was any 
insolvency exception to that rule.171  This conclusion is reinforced by the plain language of 
Section 271, which contains no exceptions and is not ambiguous.172  As such, the language 
 
271 did not rest primarily in a desire by the General Assembly to protect stockholders by affording 
them a vote on [the] transactions previously not requiring their assent.  Rather, § 271’s 
predecessors were enacted to address the common law rule that invalidated any attempt to sell all 
or substantially all of a corporation’s assets without unanimous stockholder approval.”). 
171 Cases from other jurisdictions are mixed on whether similar statutes apply to a sale of all or 
substantially all assets by the directors of an insolvent corporation.  In Mills v. Tiffany’s, the 
Supreme Court of Errors of Connecticut held that a Connecticut statute, providing that a 
corporation “may sell, lease, or exchange all its assets when that action is authorized by a vote of 
two-thirds of the outstanding stock of each class at a meeting duly warned and held for the 
purpose[,]” did not apply to a sale of all assets of an insolvent corporation made for the purpose of 
winding up its affairs.  198 A. at 189.  That court cited Basset v. City Bank & Trust Co., which 
explained that the statute was intended to supersede the common law unanimity rule and thus, 
transactions to which that general rule did not apply at common law were “outside the scope and 
purpose of the statute[.]” 165 A. at 561.  However, in Michigan Wolverine Student Cooperative, 
the Supreme Court of Michigan stated that “[t]he statute does not authorize the board of directors 
of a corporation to sell all or substantially all of the corporate assets whenever, in the opinion of 
the directors, the corporation is not a going and prosperous concern, or is in a failing condition.  If 
a corporation is no longer a going concern the statute provides several methods whereby the 
corporation may wind up its affairs, dispose of its assets, and cease to exist.  None of these methods 
authorizes a board of directors to wind up corporate affairs and dispose of the assets without action 
by the stockholders, or by a court.”  Michigan Wolverine Student Coop., 22 N.W.2d at 888.  Yet 
this is dicta because the Supreme Court of Michigan ultimately assumed, arguendo, there was 
room in the statute for such an exception, but found that the corporation was solvent, and therefore, 
that the common law exception did not apply (even assuming it existed and survived the enactment 
of Michigan’s § 271 analogue).  See also 6A Fletcher Cyc. Corp. § 2949.21 (2021) (observing that 
“[a] question may arise concerning what bearing these statutory provisions have on the common-
law rules regarding a corporation in financial distress or in a failing condition.  Some of these 
statutory requirements have been held to apply even though a corporation is insolvent.  On the 
other hand, in some jurisdictions, expressly or by implication, the requirements of such statutes 
have been held not to apply to insolvent corporations.” (footnotes omitted)).   
172 See Balma v. Tidewater Oil Co., 214 A.2d 560, 562 (Del. 1965) (stating that “[w]ords in a 
statute must be given ordinary meaning[,]” and that “[c]ourts have discretion to construe statutes 
only when they are obscure or doubtful in their meaning.  Where its language is clear and 
unambiguous, a statute must be held to mean that which it plainly states, and no room is [left] for 
construction.”).   
51 
 
of the statute should be conclusive of the General Assembly’s intent.173  In this sense, a 
“board only” insolvency exception is inconsistent with a statutory default majority vote 
rule.174  Thus, we conclude that Section 271 was intended to occupy the field and that no 
such insolvency exception survives, assuming arguendo, that it existed in the first place.175 
As a matter of policy, unearthing a “board only” insolvency exception cited only 
decades ago, and never by any Delaware court, would foster uncertainty and potential 
inconsistency in a context where predictability is crucial for corporations that have availed 
themselves of Delaware law.  “Our General Assembly has [] recognized the need to 
maintain balance, efficiency, fairness, and predictability in protecting the legitimate 
interests of all stakeholders, and to ensure that the laws do not impose unnecessary costs 
on Delaware entities.”176  Promoting stability in our DGCL is and remains of paramount 
 
173 See Dewey Beach Enters., Inc. v. Bd. of Adjustment of Town of Dewey Beach, 1 A.3d 305, 307 
(Del. 2010) (“If [a statute] is unambiguous, no statutory construction is required, and the words in 
the statute are given their plain meaning.”); Grand Ventures, Inc., 632 A.2d at 68 (observing that, 
“[i]n the absence of any ambiguity, the language of the statute must be regarded as conclusive of 
the legislature’s intent[,]” and in such a circumstance, “[t]he judicial role is then limited to an 
application of the literal meaning of the words”); Coastal Barge Corp. v. Coastal Zone Indus. 
Control Bd., 492 A.2d 1242, 1246 (Del. 1985) (explaining that if a statute is unambiguous, “the 
Court’s role is then limited to an application of the literal meaning of the words.” (citing Delaware 
Solid Waste Auth. V. News-Journal Co., 480 A.2d 628, 634 (Del. 1984))). 
174 See also Balotti & Finkelstein, supra note 162, § 10.7 (“As a practical matter, in many instances 
federal bankruptcy statutes and other statutes governing creditors’ rights have displaced the 
common law exception by providing explicit methods for addressing proposed asset dispositions 
by failing businesses.”).   
175 See Gimbel v. Signal Cos., Inc., 316 A.2d 599, 606 (Del. Ch.), aff’d, 316 A.2d 619 (Del. 1974) 
(“If the sale is of assets quantitatively vital to the operation of the corporation and is out of the 
ordinary and substantially affects the existence and purpose of the corporation, then it is beyond 
the power of the Board of Directors.”). 
176 Salzberg, 227 A.3d at 136. 
52 
 
importance.177  Stability and predictability are not advanced by reading Section 271 to 
embody a common law exception that was never the basis of a single holding by any 
Delaware court nor by other courts, according to the parties, for decades.   
Instead, we think, the focus should be on the statute’s plain language.  As we said 
in Salzberg, the “most important consideration for a court in interpreting a statute is the 
words the General Assembly used in writing it.”178  As to Section 271 in particular, this 
notion was reinforced by the Court of Chancery when then-Vice Chancellor Strine wrote:   
 
177 In aid of this goal, for example, Article IX of the Delaware Constitution requires a two-thirds 
supermajority vote of both chambers of our General Assembly to amend the DGCL.  Del. Const. 
art. IX, § 1 (“No general incorporation law, nor any special act of incorporation, shall be enacted 
without the concurrence of two-thirds of all the members elected to each House of the General 
Assembly.”). 
178 Salzberg, 227 A.3d at 113 (quotation marks omitted).  As we note above, we need not reach the 
question of whether a private foreclosure transaction, such as the one here, falls within the plain 
language of Section 271, and specifically, whether it would qualify as a “sale, lease or exchange” 
within the meaning of Section 271.  The Vice Chancellor, relying on dictionary definitions, 
provided the following observations: 
Black’s Law Dictionary contains an extensive section on the term “sale.”  The 
hallmarks of the various definitions include (i) the status of the parties as “buyer” 
and “seller,” (ii) the exchange of money or other property in return for goods and 
services, and (iii) a transfer or title.  See Sale, Black’s Law Dictionary (11th ed. 
2019).  Black’s Law Dictionary distinguishes a “sale” from a “foreclosure sale,” 
defining “foreclosure sale” to mean “[t]he sale of mortgaged property, authorized 
by a court decree or a power-of-sale clause, to satisfy the debt.”  In a separate entry, 
Black’s Law Dictionary defines the term “foreclosure” as “[a] legal proceeding to 
terminate a mortgagor’s interest in property, instituted by the lender (the 
mortgagee) either to gain title or to force a sale in order to satisfy the unpaid debt 
secured by the property.” 
Black’s Law Dictionary defines “exchange” to mean “[t]he act of transferring 
interests, each in consideration for the other,” and defines the related term 
“bargained-for-exchange” to mean “[a] benefit or detriment that the parties to a 
contract agree to as the price of performance.”  As with the definition of a “sale,” 
the hallmarks of these definitions include a voluntary transfer of interests between 
similarly situated parties. 
53 
 
[O]ur courts arguably have not always viewed cases involving the 
interpretation of § 271 through a lens focused by the statute’s plain words.  
Nonetheless, it remains a fundamental principle of Delaware law that the 
courts of this state should apply a statute in accordance with its plain 
meaning, as the words that our legislature has used to express its will are the 
best evidence of its intent.  To analyze whether the vote requirement set forth 
in § 271 applies to a particular asset sale without anchoring that analysis to 
the statute’s own words involves an unavoidable risk that normative 
preferences of the judiciary will replace those of the General Assembly.179 
 
Accordingly, we clarify that there presently is no insolvency exception embedded in 
Section 271.  
Because we have concluded that the Charter provision and Section 271 are 
materially different, we have not looked to Section 271 to interpret the Charter.  And the 
parties have identified no public policy that would detract from our analysis of the 
Charter.180  Rather, enforcing the unambiguous Charter provision is consistent with our 
 
Stream TV, 250 A.3d at 1040 (alterations in original) (emphasis omitted).  See also In re E.T. 
Russell Co., 291 F. at 816 (“I am unable to extend the meaning of the word ‘sale,’ so that it will 
include an assignment for the benefit of creditors.”).   
179 Hollinger Inc., 858 A.2d at 376–77 (footnotes omitted).   
180 As we noted earlier, the Court of Chancery identified a single public policy concern, namely, 
“interpreting Section 271 as applying to a creditor’s efforts to levy on its security would undercut 
the value of the security interest.”  Stream TV, 250 A.3d at 1042.  The court cited to then Vice-
Chancellor Strine’s transcript ruling in Gunnerman v. Talisman Capital Talon Fund, Ltd. where 
he observed that the DGCL distinguishes between financing transactions, mortgage transaction, 
collateral transactions, and sales of assets.  Id. at 1043 (citing Gunnerman v. Talisman Cap. Talon 
Fund, Ltd., C.A. No. 1894-VCS (Del. Ch. July 12, 2006) (TRANSCRIPT)).  Following this 
reasoning, the court, in its P.I. Opinion, reasoned that interpreting Section 271 to require a 
stockholder vote before an insolvent or failing corporation can transfer its assets to secured 
creditors would conflict with Section 272 of the DGCL.  Id. at 1021.  We note that Section 271 
presents no barrier to the parties’ foreclosure proceedings in Superior Court (which are presently 
stayed pending this appeal), and no party has argued that judicial foreclosure proceedings implicate 
Section 271.  Moreover, Section 272 is a default rule that corporations can alter in their charters, 
which Stream has done here. 
54 
 
policy of seeking to promote stability and predictability in our corporate laws,181 and with 
recognition that Delaware is a contractarian state.182   
IV.  CONCLUSION 
For the reasons stated herein, we VACATE the injunction, REVERSE the 
declaratory judgment, and REMAND for further proceedings consistent with this opinion.  
   
   
 
 
181 See Salzberg, 227 A.3d at 137 (“The policies underlying the DGCL include certainty and 
predictability, uniformity, and prompt judicial resolution to corporate disputes.”). 
182 See NAF Holdings, LLC v. Li & Fung (Trading) Ltd., 118 A.3d 175, 180 n.14 (2015) 
(“Delaware upholds the freedom of contract and enforces as a matter of fundamental public policy 
the voluntary agreements of sophisticated parties.” (quoting NACCO Indus., Inc. v. Applican Inc., 
997 A.2d 1, 35 (Del. Ch. 2009))); see also A & J Cap., Inc. v. L. Off. Of Krug, 2018 WL 3471562, 
at *6 (Del. Ch. July 18, 2018) (“Delaware’s pro-contractarian policy in the alternative entity space 
is alive and well.”).