Title: Daniel v. Hawkins

State: delaware

Issuer: Delaware Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
BRADLEY DANIEL, an individual, and § 
MEDAPPROACH HOLDINGS, INC., a  
§ 
Delaware corporation, 
 
 
§ 
 
 
 
 
 
 
§ 
No. 184, 2022 
 
Defendants Below,   
 
§ 
 
Appellants,  
 
 
§ 
 
 
 
 
 
 
 
§ 
Court Below:  Court of Chancery 
 
v. 
 
 
 
 
§ 
of the State of Delaware 
 
 
 
 
 
 
§ 
SHARON HAWKINS, individually and § 
derivatively on behalf of 
 
 
§ 
C.A. No. 2021-0453 
MEDAPPROACH, L.P., 
 
 
§ 
 
 
 
 
 
 
§ 
 
Plaintiff Below, 
 
 
§ 
 
Appellee. 
 
 
 
§ 
 
Submitted:  November 2, 2022 
Decided:  January 6, 2023 
 
Before VALIHURA, VAUGHN, and TRAYNOR, Justices.  
 
Upon appeal from the Court of Chancery.  AFFIRMED. 
 
David Teklits, Esquire (argued), Sara Barry, Esquire, Morris, Nichols, Arsht & Tunnell 
LLP, Wilmington, Delaware; Of Counsel:  Jeffrey Alan Simes, Esquire, Goodwin Proctor 
LLP, New York, New York for Appellants.   
 
Richard I.G. Jones, Esquire (argued), John G. Harris, Esquire, Berger Harris LLP, 
Wilmington, Delaware for Appellee.   
 
 
 
 
 
 
 
 
 
 
 
VALIHURA, Justice: 
 
2 
 
Following a trial, on April 4, 2022, the Court of Chancery entered judgment in favor 
of appellee Sharon Hawkins (“Mrs. Hawkins” or “Appellee”) on her request for a 
declaration that the irrevocable proxy which provides appellant W. Bradley Daniel 
(“Daniel”)1 with voting power over all 100 shares of N.D. Management, Inc. (“Danco GP”) 
(the “Irrevocable Proxy”), does not bind a subsequent owner of such Danco GP shares.  
The Court of Chancery also held that an addendum to the Irrevocable Proxy does not 
obligate the current owner of the Danco GP shares, MedApproach, L.P. (the “Partnership”), 
to demand that the buyer in a sale to an unaffiliated third party bind itself to the Irrevocable 
Proxy.   
The Irrevocable Proxy was executed on February 5, 1997 by the then-owner of all 
100 shares of issued and outstanding stock of Danco GP.  It granted three individuals, 
including Daniel, the power to vote the Proxy Shares (defined below).  On January 1, 1999, 
as part of an internal restructuring in which the Partnership was created and acquired 75% 
of the Proxy Shares, the Partnership executed an Agreement To Be Bound By Irrevocable 
Proxy and Power Of Attorney, binding itself to the Irrevocable Proxy.2   
The Partnership dissolved on February 28, 2021, and is now in the process of 
winding up.  As its principal asset, it owns 75% of the issued and outstanding stock of 
Danco GP (the “Majority Shares”).  Appellee currently owns 88% of the Partnership and 
 
1 MedApproach Holdings, Inc., referred to herein as “Holdings” is also named as a defendant.  
Daniel owns 100% of Holdings.  
2 App. to Opening Br. at A370 (Agreement To Be Bound By Irrevocable Proxy and Power of 
Attorney).  
 
3 
 
desires to purchase the Majority Shares in the winding up process.  But for the Irrevocable 
Proxy, the owner of the Majority Shares would control both Danco GP and the entity 
managed by Danco GP, Danco LP (defined below).  
Daniel appeals the Court of Chancery’s judgment that the Irrevocable Proxy does 
not run with the Majority Shares.3  He argues that the Court of Chancery committed the 
following legal errors: (1) first, rather than interpret and apply the plain language of the 
Irrevocable Proxy as written, the Court of Chancery erred in relying on the Restatement 
(Third) of Agency, which was not adopted until nearly a decade after the parties entered 
into the Irrevocable Proxy, (2) second, it read additional language into the Irrevocable 
Proxy in order to support its finding that the broad “catch-all” language that the parties 
included to prevent termination of the Irrevocable Proxy did not encompass a sale of the 
shares, and (3) third, it did not give effect to all of the terms of the Irrevocable Proxy and 
it improperly limited the assignment clause of the Irrevocable Proxy so as not to bind 
assigns of the stockholder.  
 
For the reasons set forth below, we AFFIRM the judgment of the Court of 
Chancery.  
 
3  Daniel does not challenge the Court of Chancery’s conclusion that the Addendum does not 
obligate the Partnership to demand that the buyer in a sale to an unaffiliated third party bind itself 
to the Irrevocable Proxy. 
 
4 
 
I. 
FACTUAL AND PROCEDURAL BACKGROUND4 
A. The Founding of the Project 
Population Council, Inc. (“Popco”) is an international not-for-profit corporation 
focused on family planning.  In 1994, a French pharmaceutical company granted Popco a 
license to manufacture, market, and distribute the oral abortion drug RU-486, more 
commonly known as mifepristone.  Once granted the license, Popco began a search for an 
investor to manufacture and distribute the drug for domestic and international use (the 
“Project”).  In what would turn out to be an unfortunate choice, Popco selected Joseph D. 
Pike (“Pike”), who it had previously worked with on similar ventures, to undertake the 
Project.  
Pike formed a complex entity structure to consummate the venture, placing himself 
at the helm.  He formed Danco Laboratories, Inc., a Cayman Islands company (“Danco 
Labs”) as the main operating entity.  Danco Labs subsequently domesticated into a 
Delaware limited liability company and is now known as Danco Laboratories, LLC.  
Through an affiliate, Popco granted an exclusive sublicense to Danco Labs to implement 
the Project in the United States.5  Ultimately, the outcome of this litigation will determine 
the control arrangement of Danco Labs.  
Pike then formed Neogen Investors L.P., a California limited partnership.  Neogen 
Investors L.P. is now known as Danco Investors Group, L.P. (“Danco LP”).  Danco LP 
 
4 Unless otherwise noted, facts are taken from the Court of Chancery’s memorandum opinion.  See 
Hawkins v. Daniel (Chancery Opinion), 273 A.3d 792 (Del. Ch. 2022). 
5 App. to Opening Br. at A132 (Offering Memorandum at 1).  
 
5 
 
owns 100% of Danco Labs and was formed as a holding company to raise equity financing 
for the Project.   Pike’s goal was to solicit investors to invest in Danco Labs by purchasing 
limited partnership interests in Danco LP.  
Lastly, Pike formed N.D. Management, Inc., a Cayman Islands company (“Danco 
GP”) as Danco LP’s general partner.  Danco GP has since domesticated into a Delaware 
corporation.  Initially, Pike owned 100% of Danco GP, which consists of 100 shares of 
issued and outstanding stock.  Because Danco GP controlled Danco LP as its general 
partner, and Danco LP owns 100% of Danco Labs, Pike effectively controlled Danco Labs 
through his 100% ownership of Danco GP.  The same remains true today:  whoever 
controls Danco GP controls Danco Labs and the Project.  
Pike then began raising money for the Project by selling limited partnership interests 
in Danco LP.  From about November 1995 to February 1997, Pike raised approximately 
$13.35 million.6  One of Pike’s primary investors was appellant Daniel.  Daniel invested 
in Danco LP through his newly formed entity MedApproach L.P., a Tennessee limited 
partnership (“Old MedApproach”), which he caused to purchase limited partnership 
interests in Danco LP.  At the time, Daniel owned Old MedApproach through its general 
partner, Bio-Pharm Investments, Inc., a Tennessee corporation.  Bio-Pharm Investments, 
Inc. has since become defendant below-appellant Med Approach Holdings, Inc., a 
Delaware corporation (“Holdings”).  Daniel owns 100% of Holdings.  In 1999, Old 
 
6 Id. at A135 (Offering Memorandum at 4).  
 
6 
 
MedApproach was restructured and divided into three separate entities, one of which is the 
Partnership.   
Around this time, Daniel was introduced to Mrs. Hawkins’ husband, Gregory 
Hawkins (“Mr. Hawkins”) through a family connection who suggested that the two discuss 
the Project.   After discussing the opportunity with Daniel, Mr. Hawkins decided to invest.  
Instead of purchasing limited partnership interests directly in Danco LP, Mr. Hawkins 
invested by purchasing limited partnership interests in Daniel’s entity, Old MedApproach.  
Old MedApproach then used the money invested by Mr. Hawkins to purchase limited 
partnership interests in Danco LP.  After investing $1.5 million, Mr. Hawkins owned 
approximately 75% of the limited partnership interests in Old MedApproach.  Three years 
later, Mr. Hawkins transferred his interest in Old MedApproach to his wife, appellee here, 
due to personal financial difficulties.   As between Mr. Hawkins and Mrs. Hawkins, Mr. 
Hawkins was substantively involved in the Project at the relevant time period and, as such, 
gave the substantive testimony before the Court of Chancery. 
B. The Downfall of Joe Pike 
In May 1996, Pike pled guilty to misdemeanor forgery charges in North Carolina 
arising out of a 1985 transaction.  He was disbarred from practicing law in the State of 
North Carolina and faced criminal penalties.  Pike’s legal trouble was news to Popco.  Pike 
had failed to disclose any legal difficulties or the underlying events to both Popco and 
investors in Danco LP.  Further, Popco believed that Pike had misled investors about 
potential uses of their investment and the payment of fees, and various other aspects of the 
Project.  To avoid jeopardizing the Project, Popco sought to extract Pike from the Project 
 
7 
 
as quickly as possible.   In November 1996, Popco filed a complaint in New York state 
court requesting that the court remove Pike from his leadership roles and rescind his 
interest in the Project.7  It also threatened to cancel the sublicense it had granted to Danco 
Labs.  On December 11, 1996, in the face of this existential threat, Pike, Project investors, 
and Popco met to determine if there was a path forward.  
Pike, Popco, and the investors in Danco LP were all represented at the meeting.  The 
Project investors were represented by five individuals selected from among their ranks:  
Daniel, Brian Freeman, Jeff Rush, Richard Cusac, and William Elkus (the “LP 
Representatives”).  As representatives, they would present any agreement reached with 
Pike and Popco to the remaining investors for their review and approval. 8    
Freeman and Rush owned limited partner interests directly in Danco LP.  They also 
had solicited additional investors for the Project and served as advisors to Pike.  Cusac and 
Elkus owned limited partner interests directly in Danco LP as well, but the record is limited 
as to any further involvement they may have had in the Project.9   
Daniel represented Old MedApproach at the meeting.  Having chosen not to attend 
the meeting due to the political climate and controversy surrounding mifepristone, Mr. 
Hawkins relied on Daniel for news of the negotiations with Pike and Popco.  Daniel 
communicated regularly with Mr. Hawkins, sought his input, and kept him apprised of 
developments.  
 
7 Id. at A205 (Offering Memorandum at 75).  
8 Chancery Opinion, 273 A.3d at 799.  
9 Id. 
 
8 
 
At the negotiating table, Popco put forth two demands.  First, Popco reiterated the 
demand it made in its November suit: It wanted to expel Pike from any control or 
management of the Project.  Because Pike held his interest in Danco LP through Danco 
GP, this would mean, among other things, Pike would have to sell at least a majority of his 
100 shares of Danco GP and relinquish the voting rights to all 100 shares.  Second, Popco 
wanted to ensure that existing Danco LP investors would have the opportunity to rescind 
their investment.  Popco feared that the failure to disclose Pike’s legal trouble to investors 
and certain actions taken by Pike constituted a violation of federal and state securities laws 
and wanted to cure a potential violation through a rescission offer.10   
C. The Settlement Agreement 
By the end of January 1997, the LP Representatives reached an agreement with 
Popco and Pike that would achieve Popco’s goals and allow the Project to move forward. 
The terms of the deal were memorialized in an agreement entitled Agreement Regarding 
Neogen Project, dated January 21, 1997 (the “Settlement Agreement”).   
Answering Popco’s first demand, Pike agreed to resign from all of his roles in the 
Project, to sell 75% of his equity interest in the Project, and to give up the voting rights 
allied with the 25% equity interest he was allowed to retain.  In other words, Pike had to 
sell the Majority Shares, and, although he could keep the economic rights to the 25 
remaining shares (the “Pike Shares”), he had to give up their attendant voting rights.   
 
10 See App. to Opening Br. at A136, A156–57 (Offering Memorandum at 5, 25–26). 
 
9 
 
The Settlement Agreement provided that, in return for exiting from the Project, 
selling the Majority Shares, and giving up voting rights to the Pike Shares, Pike was 
contractually entitled to payment of 50% of the distributions on the Majority Shares, up to 
a cap of $21.875 million.11  As an advance on the distributions, Pike received an upfront 
loan in the amount of $3.5 million (the “Pike Loan”), which Pike would repay from the 
first $3.5 million of the distributions.12  Pike also received a consulting agreement that 
would pay him $300,000 per year for five years.13   
Pike’s side of the exchange presented timing issues for the deal.  Pike’s sale of the 
Majority Shares was contingent on both the payment of the Pike Loan and the approval of 
the Settlement Agreement.14  Once the Pike Loan was funded, Pike would resign all of his 
positions at any entity associated with the Project and transfer 49.9% of his shares in Danco 
GP.15  Once Popco and the limited partners holding a majority of the interests in Danco LP 
approved the Settlement Agreement, Pike would transfer another 25.1% of his shares in 
Danco GP.16  But Popco wanted Pike to transfer control of the Project as soon as possible 
so that it could cure the potential securities fraud violations and move forward with the 
Project.  To solve this issue, Pike agreed to transfer voting power over all 100 of his Danco 
 
11 Id. at A021–22 (Settlement Agreement § IV(B)(1)(b)). 
12 Id. at A018–21 (Settlement Agreement §§ III(A), IV(B)(1)(a)). 
13 Id. at A021–22 (Settlement Agreement § IV(B)(2)(a)).   
14 Chancery Opinion, 273 A.3d at 800.  
15 App. to Opening Br. at A018–21 (Settlement Agreement §§ IV(A)(1)(a)(i), IV(A)(3)). 
16 Id. at A019 (Settlement Agreement § IV(A)(1)(a)(ii)). 
 
10 
 
GP shares as soon as he received the Pike Loan.17  The vehicle for the immediate transfer 
of voting power was the Irrevocable Proxy.  Through the Irrevocable Proxy, Pike 
irrevocably appointed Daniel, Freeman, and Rush (the “Holders”) as his proxies to vote all 
100 shares (the “Proxy Shares”).  
The Settlement Agreement also addressed Popco’s second demand that the investors 
Pike had brought in be offered an opportunity to rescind their interests (the “Recission 
Offer”).  The Recission Offer would be presented at the same time as an option for the 
limited partners of Danco LP to invest additional funds in the Project (the “Offering”).  
The terms of the Settlement Agreement created the need for capital to fund the Pike 
Loan and the Recission Offer. The Settlement Agreement contemplated that certain 
“Participating Investors” would provide the funds.18  It defined Participating Investors as 
Old MedApproach, Rush, Freeman, Cusac, and Elkus, plus any other limited partners in 
Danco LP who agreed to sign on to the Settlement Agreement on or before January 31, 
1997.  Each Participating Investor would agree to fund an amount of the Pike Loan and of 
the Recission Offer in proportion to their relative interest in Danco LP.  In exchange, they 
would receive their pro rata interest in the Majority Shares.  
Finally, the Settlement Agreement contemplated that in the future, the Participating 
Investors could restructure the entities comprising the Project through the creation of a 
 
17 Chancery Opinion, 273 A.3d at 813 (finding that the Settlement Agreement “contemplated a 
complex series of transactions that would take time to implement,” and that “[t]he solution was 
the Irrevocable Proxy, under which Pike immediately gave up his voting power over the Proxy 
Shares”).  
18 App. to Opening Br. at A022–23 (Settlement Agreement § IV(D)). 
 
11 
 
“Newco.”19  It provided that the rights covered by the Irrevocable Proxy would inure to the 
interests in the Newco, which would be held by the Participating Investors.20  The provision 
would allow the Participating Investors to replace the entity structure that Pike had created 
to give himself sole control over the Project with a conventional corporate governance 
structure once Pike was out of the picture.   
D. The Solicitation of the Limited Partners’ Approval of the Settlement Agreement 
By its terms, the Settlement Agreement had to be approved by both Popco and a 
majority of the interests in Danco LP on or before February 5, 1997, and would only 
become effective upon such approval.21  The Settlement Agreement also provided that the 
limited partners of Danco LP would have the opportunity to become Participating Investors 
if they joined the Settlement Agreement before January 31, 1997.  This imposed on the LP 
Representatives a tight timeline to solicit the consent of the limited partners of Danco LP 
to the Settlement Agreement and to offer them the opportunity to become Participating 
Investors.  
The LP Representatives circulated a short memorandum, dated January 24, 1997, to 
the limited partners of Danco LP that described the Settlement Agreement and the offer to 
become Participating Investors (“the Settlement Memorandum”).22  It asked the limited 
 
19 See id. at A019–20, A022–23 (Settlement Agreement §§ IV(A)(2), IV(D)).   
20 Id. at A020 (Settlement Agreement § IV(A)(3)).   
21 Id. at A018 (Settlement Agreement § III(A)).   
22 Id. at A025 (Settlement Memorandum).  
 
12 
 
partners to sign and return a form by January 31, 1997 indicating whether they consented 
to the Settlement Agreement and whether they wanted to become Participating Investors.   
The Settlement Memorandum briefly described the negotiations between the parties 
and the opportunity to become Participating Investors.  It also informed the limited partners 
of Danco LP of the obligations they would incur under the Settlement Agreement if they 
chose to become Participating Investors.  In addition to funding the Pike Loan, they would, 
on a pro rata basis, “provide to [Danco LP] up to $14 million additional capital 
contributions to ‘top up’ the capital of [Danco LP] to the $27.5 million level” originally 
contemplated by the Project documents.23  Limited partners who chose to become 
Participating Investors would be informed of their proportional amount of the Pike Loan 
five days later, on February 5, 1997.  They would be informed of their proportional share 
of the additional $14 million capital at an unspecified later date.24  
E. The Revised Settlement Agreement and the Addendum 
 
Between January 24 and January 31, 1997, the LP Representatives determined that 
giving the opportunity to purchase Pike’s equity interests to all limited partners of Danco 
LP posed logistical and timing issues.  Fearing that an extension of the timeline set by the 
Settlement Agreement would delay the deal, the LP Representatives entered into a revised 
settlement agreement (the “Revised Settlement”) which provided, among other things, that 
only Old MedApproach would purchase the Majority Shares from Pike.  None of the other 
 
23 Id. at A026 (Settlement Memorandum).   
24 Id. at A028 (Settlement Memorandum).  
 
13 
 
limited partners in Danco LP would become Participating Investors.  The only Participating 
Investors, and the only counterparties to the Settlement Agreement, would be Old 
MedApproach, Freeman, and Rush.  They entered into a letter agreement, dated February 
4, 1997,25 in which they agreed to an allocation of the funding commitment:  Freeman and 
Rush each agreed to fund 25%, Old MedApproach agreed to fund the remaining 50%, and 
Mr. Hawkins agreed to backstop the liability of Old MedApproach.26  
The Revised Settlement posed a problem for the Irrevocable Proxy.  The Court of 
Chancery found that the purpose of the Irrevocable Proxy was to provide a temporary 
governance regime until Pike was expelled from the Project and a more conventional 
governance structure would be put in place, wherein shareholders would elect a board of 
directors to manage operations.27  Through the Irrevocable Proxy, Pike was appointing 
Daniel, Rush, and Freeman as his proxy to vote the Majority Shares in his capacity as 
owner of the Majority Shares.  But the Revised Settlement contemplated that Pike would 
turn over the Majority Shares to Old MedApproach alone, and not the existing limited 
partners of Danco LP who had chosen to become Participating Investors.28  Popco wanted 
to make sure that Old MedApproach would be bound by the Irrevocable Proxy until the 
anticipated reorganization was complete. 29  To address the concern that the Irrevocable 
 
25 Id. at A030 (Financial Commitments in Respect of Neogen Project). 
26 Chancery Opinion, 273 A.3d at 802.  
27 Id. at 801; see also App. to Opening Br. at A519 (G. Hawkins Trial Testimony at 38).  
28 Chancery Opinion, 273 A.3d at 801. 
29 Daniel does not directly assert that the Court of Chancery’s finding that the Irrevocable Proxy 
structure was not intended to be permanent was clearly erroneous.  Id. at 804, 813, 818, 833–34, 
835.  Instead, he makes a number of assertions that, in our view, either merely state his contrary 
 
14 
 
Proxy would terminate when Old MedApproach bought the shares, Popco’s counsel 
prepared an addendum to the Irrevocable Proxy that would explicitly bind Old 
MedApproach as the new owner of the Majority Shares (the “Addendum”).30  The 
Addendum is appended to the Irrevocable Proxy and was executed on February 5, 1997, 
the same day as the Irrevocable Proxy.31  In it, Old MedApproach agreed to be bound by 
the Irrevocable Proxy at any time that it is a beneficial or record holder of any of the Proxy 
Shares and agreed not to transfer any such shares of Danco GP to any “MedApproach 
Person,” unless such person agrees to be bound by the Irrevocable Proxy.  MedApproach 
Person is defined as Old MedApproach, “or its affiliates, owners, designees, or nominees 
(or their respective successors or assigns).”32 
 
view, or fail to demonstrate any error, let alone clear error, by the trial court.  See, e.g., Opening 
Br. at 13.  These assertions rely in part on extrinsic evidence.  However, the trial court found that 
the extrinsic evidence cut both ways.  We respect the Court of Chancery’s finding that heavy 
reliance on extrinsic evidence in this case would be untenable because of the considerable passage 
of time.  It stated, “[a]lthough [Daniel and Mr. Hawkins] generally seemed credible, their 
testimony about negotiations that occurred over two decades ago was not sufficiently reliable to 
support factual findings without corroboration.”  Chancery Opinion, 273 A.3d at 833 n.45.  
Further, we conclude that the Court of Chancery’s factual finding regarding the structure’s 
temporary nature is supported by the record and is not clearly erroneous.  Daniel’s view is 
particularly weakened by the language of the Irrevocable Proxy itself.  The Termination Provision 
in the proxy explicitly contemplates that it will terminate upon the creation of a Newco.  App. to 
Opening Br. at A035 (Irrevocable Proxy at 2, ¶ 5).   
30 Chancery Opinion, 273 A.3d at 811 (noting that after pivoting to the Revised Settlement, in 
which only Old MedApproach acquired the Majority Shares, “PopCo [] insist[ed] on a mechanism 
to bind Old MedApproach to the Irrevocable Proxy”).  
31 App. to Opening Br. at A034 (Irrevocable Proxy at 1).  
32 Id. at A039 (Irrevocable Proxy at 5).  
 
15 
 
As requested by the LP Representatives,33 a majority of the interests in Danco LP 
approved the Revised Settlement.  Mr. Hawkins transferred the amount of the Pike Loan 
to Pike and on February 11, 1997, Pike acknowledged receipt, resigned from his leadership 
positions, and transferred the Majority Shares to Old MedApproach.  The next day, the 
parties to the litigation initiated by Popco approximately three months earlier, filed a 
stipulation of dismissal, dismissing the action with prejudice.34  
F. The Recission Offer and the Offering  
After approximately a year-long delay largely due to the loss of Danco Labs’ 
primary manufacturing contract, Danco LP launched the Recission Offer and the Offering 
by circulating a confidential offering memorandum to its limited partners on August 5, 
1998 (the “Offering Memorandum”).35  The Offering Memorandum both informed limited 
partners of Danco LP about the Rescission Offer and sought to sell up to $27.5 million 
aggregate amount of limited partnership interests in Danco LP in the Offering.  Of the 
$27.5 million, $13.35 million would be used to fund the Recission Offer to the extent 
limited partners chose to rescind, and at least the remaining $14.15 million would serve as 
additional funding for the Project.36  The Offering Memorandum described the history of 
 
33 On January 31, 1997, the LP Representatives circulated a revised memorandum to the limited 
partners of Danco LP reflecting the changes and requesting their consent to (i) enter into the 
Revised Settlement, (ii) transfer interests in, and change control of, Danco GP, and (iii) transfer 
voting control of Danco GP to Daniel, Freeman, and Rush.  Id. at A207 (Offering Memorandum 
at 76).  The revised memorandum does not appear in the record, but it is described in the Offering 
Memorandum. 
34 Id. at A208 (Offering Memorandum at 77).  
35 Id. at A128, A190 (Offering Memorandum at 1, 59).  
36 Id. at A137 (Offering Memorandum at 6).  
 
16 
 
the Project, Pike’s legal trouble, the Revised Settlement, and various Project risk factors, 
including risks relating to the control of Danco LP.37  It disclosed that limited partners of 
Danco LP lacked control over the entity and the Project because they did not have voting 
rights.38  Instead, Danco LP was managed and controlled exclusively by its general partner.  
As for Danco GP, the Offering Memorandum explained that it was “controlled by the [ ] 
Holders.”39  It also stated that: 
Pursuant to an Irrevocable Proxy and Power of Attorney, dated February 5, 
1997, [Old MedApproach], Mr. Pike and his wife granted to Messrs. Daniel 
and Freeman and Dr. Rush . . . proxies to vote their respective interests in 
[Danco GP]. Accordingly, [Danco GP] is in effect managed by or under the 
direction of the [ ] Holders.40 
 
Apart from disclosing the existence of the Irrevocable Proxy and the identities of the 
Holders, the Offering Memorandum was silent as to its terms.  Importantly, it did not 
explicitly address whether the Irrevocable Proxy would bind any subsequent owner of the 
Majority Shares.41  
 
37 See e.g., id. at A135–36, A141–55, A205–09 (Offering Memorandum at 4–5, 74–78, 10–24). 
38 Id. at A149 (Offering Memorandum at 18) (“Therefore, except for certain extraordinary matters 
(such as admitting new or additional general partners, changing the nature of [Danco LP’s] 
business, acting in contravention of the Partnership Agreement, obtaining financing from affiliates 
of [Danco LP], or amending the Partnership Agreement), the Limited Partners have no voice in 
the day-to-day management of [Danco LP] or its business or affairs and have no voting rights.”).  
39 Id.  
40 Id. at A180 (Offering Memorandum at 49).  
41 Chancery Opinion, 273 A.3d at 811 (“[Daniel’s] arguments tacitly concede that there is no 
provision in the Irrevocable Proxy which expressly states that it runs with the Majority Shares.”). 
 
17 
 
The Rescission Offer closed in 1999.  It raised $23,901,966, falling short of its $27.5 
million goal.42  At trial, Mr. Hawkins estimated that he ultimately contributed $5–6 million 
to the Rescission Offer. 
G. Freeman Resigns 
 
After the Rescission Offer closed, Freemen sent a letter to Daniel and Rush dated 
May 17, 1999 (“Freeman Resignation Letter”).43  It informed them that he would no longer 
be serving as a Holder under the Irrevocable Proxy or a director of Danco GP.  He explained 
that he was resigning in part because, “upon the completion or termination of the current 
financing, restructuring, [and] rescission efforts, the role of [ ] Holder is no longer 
necessary.”44  The Court of Chancery found that this “assertion evinces the pre-litigation 
understanding of a party closely involved in the settlement, and it indicates that the 
Irrevocable Proxy was not intended as a permanent control arrangement.”45  Freeman died 
in 2001, and since no one ever replaced Freeman as a Holder, Daniel and Rush are the only 
two remaining Holders.  Rush is not a party to this litigation.  
H. The Restructuring of Old MedApproach  
After the Rescission Offer closed in 1999, Daniel caused Old MedApproach to 
undergo a significant restructuring.  Old MedApproach dissolved and, upon its winding up, 
distributed its holdings across three newly formed Delaware limited partnerships: the 
 
42 App. to Opening Br. at A572 (A. Van Vranken Trial Testimony at 250).  
43 App. to Answering Br. at B362–63 (Freeman Resignation Letter). 
44 Id. at B362.  
45 Chancery Opinion, 273 A.3d at 804.  
 
18 
 
Partnership, DIG Special Assets, LP, and DIG Equity, LP.  Daniel kept himself at the top 
of the new tri-entity structure.  He is the 100% owner of his co-defendant, Holdings, the 
successor entity to Bio-Pharm Investments, Inc., and the general partner of the three 
MedApproach entities.  
As part of the restructuring, Old MedApproach distributed the Majority Shares to 
the Partnership, which is 88% owned by Mrs. Hawkins.  Because of the Majority Shares, 
the Partnership owns 75% of Danco GP, with Pike still holding on to the remaining 25%.  
Consistent with its obligations under the Addendum as a MedApproach Person, the 
Partnership executed an Agreement To Be Bound by Irrevocable Proxy when it became 
the owner of the Majority Shares on January 1, 1999.46   
Mrs. Hawkins owns additional limited partnership interests in Danco LP through 
DIG Special Assets, LP and DIG Equity LP, but the two entities are otherwise not relevant 
to the question before the Court.   
The parties agreed that the following chart accurately represents the current 
organizational structure of the relevant entities.  Med Approach Holdings is Holdings; 
MedApproach LP is the Partnership; N.D. Management is Danco GP; and Danco Investors 
Group, L.P. is Danco LP.  
 
 
 
46 App. to Opening Br. at A370 (Agreement To Be Bound By Irrevocable Proxy And Power Of 
Attorney). 
 
19 
 
 
 
 
 
 
 
 
 
 
 
The economics of the Project flow from Danco Labs all the way up to Holdings.  
Danco Labs distributes all of its profits to its owner, Danco LP, which then distributes 20% 
of the profits to its general partner, Danco GP.  Danco GP uses its 20% to pay dividends to 
its stockholders: The Partnership (in which Mrs. Hawkins has an 88% interest) receives 
75% of any dividend and Pike receives the remaining 25%.  Danco LP distributes the 
remaining 80% of its share of Danco Lab’s profits to its limited partners.  Through its 
 
20 
 
ownership of the Majority Shares and the limited partner interest in Danco LP, the 
Partnership receives approximately 17.71%47 of the profits generated by Danco Labs.48  
Holdings receives its piece of the pie as the general partner of the MedApproach 
entities.  The Partnership pays Holdings a 1% management fee.  Holdings also receives 
distributions on a 10% carried interest.  As sole owner, Daniel receives the earnings of 
Holdings, net of expenses.49  
I. The End of the Pike Dispute and the Beginning of the Daniel/Hawkins Dispute 
By the end of the millennium, the Project had completed the Rescission Offer, raised 
additional funds through the Offering, and undergone a restructuring.  In September 2000, 
the United States Food and Drug Administration approved mifepristone for sale in the 
United States.  Finally, by 2001, the remnants of the Pike debacle were cleared up:  
Disputes with Pike were resolved and the financial obligations to him under the Settlement 
Agreement had been satisfied.   
 
47 See Chancery Opinion, 273 A.3d at 805 n.17.  As the owner of the Majority Shares, the 
Partnership receives 75% of 20% of Danco Labs’ profits.  75% multiplied by 20% equals 15%.  
The Partnership receives 2.71% of the profits of Danco Labs through the Partnership’s ownership 
of a limited partnership interest in Danco LP.  15% plus 2.71% equals 17.71%.    
48 Id. at 805. 
49 Daniel also receives considerable compensation for being a Holder.  In a 1998 letter agreement, 
Old MedApproach acknowledged that Daniel would receive $300,000 per year from Danco LP 
and that Danco LP could reimburse Daniel for certain out-of-pocket expenses and additional 
special services he may provide.  Ultimately, Daniel has earned approximately $10.3 million in 
proxy fees from Danco LP since 1996.  He also receives $3,000 for each day spent on litigation 
involving the Project under an indemnification agreement with the Partnership, Danco GP, and 
Danco LP.  Finally, Daniel earns income through an entity that leases office space to Danco GP 
and Danco LP.  
 
21 
 
With the threat of Pike asserting control over the Project ameliorated, Mr. Hawkins 
sought to terminate the Irrevocable Proxy.  Daniel informed Mr. Hawkins that the 
Irrevocable Proxy was irrevocable and could not be relinquished.  As a result, the parties 
have filed a series of lawsuits against one another. 50  This litigation is the latest.  
J. The Parties’ Negotiations Over the Majority Shares 
The Partnership is governed by an Agreement of Limited Partnership dated as of 
January 1, 1999 (the “Partnership Agreement”).  The Partnership Agreement provided that 
the Partnership shall terminate upon the expiration of its term, on December 31, 2020.  
As the expiration date approached, Daniel sought the approval of the limited 
partners of the Partnership to extend the term of the Partnership until 2045 to align with 
the term of Danco LP.  The limited partners agreed, except for Mrs. Hawkins.  Mrs. 
Hawkins agreed only to extend the term until February 28, 2021.  Because Mrs. Hawkins 
owns 88% of the limited partnership interests in the Partnership, the Partnership dissolved 
on that date.  
The terms of the Partnership Agreement provide that after the Partnership dissolves, 
the only business to be conducted is completion of any pending transactions and the 
winding up of the affairs of the Partnership, including the distribution of its assets.  The 
 
50 Daniel’s entity, Holdings, initiated a suit in 2011 against Mr. and Mrs. Hawkins regarding 
management fees due to the entity.  See MedApproach Hldgs., Inc. v. Hawkins, 2012 WL 6569268, 
at *1 (M.D. Tenn. Dec. 17, 2012).  The parties have settled the matter.  See MedApproach Hldgs., 
Inc. v. Hawkins, Civ. No. 3:11-cv-01199, ECF No. 125 (M.D. Tenn. Oct. 11, 2016).  In 2021, the 
United States District Court for the Southern District of New York dismissed a 2013 action 
initiated by Mrs. Hawkins to invalidate the Irrevocable Proxy and resolve unrelated claims relating 
to the management of the MedApproach partnerships.  See generally Hawkins v. Daniel (Dismissal 
Decision), 2021 WL 3732539, at *7–8 (Del. Ch. Aug. 24, 2021).  
 
22 
 
Partnership Agreement empowers its general partner, Holdings, to wind up the 
Partnership’s affairs.  In doing so, Holdings is required to convert to cash the Partnership’s 
noncash assets and determine the capital accounts of its limited partners.  
On March 22, 2021, Mr. Hawkins sent a letter to Daniel, as owner of Holdings, 
conveying his interest in purchasing the Majority Shares in the winding up process.  In his 
letter, Mr. Hawkins proposed a price in the range of $12 to $15 million, under the 
“threshold” condition that the Majority Shares be sold “free and clear from, and not subject 
to,” the Irrevocable Proxy.51  
On March 25, 2021, Daniel responded that any offer would have to “take into 
account the terms of the [Irrevocable] Proxy.”52  The next day, Daniel solicited offers from 
the other limited partners in Danco LP for the Majority Shares.  Only Rush responded with 
an offer, proposing $5 million for 80% of the Partnership’s total assets based on the 
assumption that the Irrevocable Proxy would remain in place.  The offer valued the 
Partnership at $6.125 million, approximately 50% lower than the bottom of the range 
proposed by Mr. Hawkins.   
The discussions between Mr. Hawkins and Daniel regarding the Majority Shares 
went nowhere.  Neither of them was willing to budge on the issue of the Irrevocable Proxy.  
 
 
51 App. to Opening Br. at A455 (“Potential Offer to Purchase N.D. Management, Inc. Stock” dated 
March 22, 2021).  
52 Id. at A457 (“MedApproach Bid” dated March 25, 2021).  
 
23 
 
K. The Litigation 
On May 24, 2021, Mrs. Hawkins filed suit in the Court of Chancery asserting two 
counts against Daniel and Holdings.  In Count I, Mrs. Hawkins sought a declaratory 
judgment that the defendants “are required to market and sell the Partnership’s 75% stake 
in [Danco GP] free and clear from, and not subject to, the continued application of the 
[Irrevocable] Proxy.”53  In Count II, she sought an injunction prohibiting the defendants 
“from marketing and/or selling the [Majority Shares] subject to the continued application 
of the [Irrevocable] Proxy.”54  She also sought expedited proceedings, and the trial court 
granted expedition.  
After dismissing a motion to dismiss filed by Daniel, the trial court held a one-day 
trial on September 23, 2021.  At trial, Daniel agreed to postpone sale of the Majority Shares 
pending the outcome of this litigation.  Post-trial briefing and argument moved forward on 
a non-expedited schedule, and the Court of Chancery issued its memorandum opinion on 
April 4, 2022.  It entered judgment in favor of Mrs. Hawkins on May 9, 2022.  
In its memorandum opinion, the Court of Chancery summarized its conclusion as 
follows: 
The Irrevocable Proxy does not plainly provide that it binds a subsequent 
owner of the Majority Shares.  There is language which might be construed 
in that fashion if read broadly and in Daniel’s favor, but that is not sufficient.  
The Addendum demonstrates that the parties themselves did not believe that 
the Irrevocable Proxy would bind a subsequent purchaser of the Majority 
Shares.  The Addendum contains the Transfer Restriction [defined below], 
 
53 Id. at A480–81.  
54 Id. at A481.  
 
24 
 
but that provision does not encompass a third party [owner] of the Majority 
Shares.   
 
As a result, “the language of the Proxy itself does not plainly indicate that 
the Proxy [is] to run with the [s]hares if they are sold.”  Accordingly, the 
Irrevocable Proxy does not run with the Majority Shares.55 
 
In short, the court held that “the plain language of the Irrevocable Proxy does not establish 
a grant of agency authority that runs with the Majority Shares.”56  Daniel filed notice of 
appeal on May 31, 2022.  Oral argument was held on November 2, 2022.  
II. 
SCOPE AND STANDARD OF REVIEW 
Daniel claims that the Court of Chancery erred as a matter of law in interpreting the 
language of the Irrevocable Proxy.  Because irrevocable proxies are contracts, this is a 
question of contract interpretation.  Contract interpretation is a question of law subject to 
de novo review by this Court.57  “Unless there is ambiguity, Delaware courts interpret 
contract terms according to their plain, ordinary meaning.”58 To the extent Daniel 
challenges the factual findings of the trial court, we will not disturb those findings “unless 
they are clearly erroneous and not supported by the record.”59  “Where there are two 
 
55 Chancery Opinion, 273 A.3d at 832–33 (quoting TR Invs., LLC v. Genger, 2010 WL 2901704 
(Genger Trial), at *20 (Del. Ch. July 23, 2010), aff’d, 26 A.3d 180 (Del. 2011)).  
56 Id. at 812.  
57 See, e.g., Genger v. TR Invs., LLC, 26 A.3d 180, 190 (Genger) (Del. 2011) (interpreting proxy); 
Stream TV Networks, Inc. v. Seecubic, Inc. (Stream TV), 279 A.3d 323, 336 (Del. 2022) 
(interpreting corporate charter). 
58 Stream TV, 279 A.3d at 336 (quoting Alta Berkeley VI C.V. v. Omneon Inc., 41 A.3d 381, 385 
(Del. 2012)).  
59 Genger, 26 A.3d at 190 (citing Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1158 (Del. 
2010)). 
 
25 
 
permissible views of the evidence, the factfinder’s choice between them cannot be clearly 
erroneous.”60  
III. 
ANALYSIS 
This Court must determine whether the Court of Chancery erred in finding that the 
Irrevocable Proxy does not run with the Majority Shares.  Delaware public policy and law 
require that the terms of an irrevocable proxy be clear and unambiguous.61  Therefore, a 
Delaware court will not look to extrinsic evidence in interpreting an irrevocable proxy but 
will rely on the four corners of the proxy instrument itself.  Where the irrevocable proxy is 
ambiguous, the ambiguity will be construed against the rights of the proxy holder.62   
As explained more fully below, we agree with the Court of Chancery, at least to the 
extent that the Irrevocable Proxy is ambiguous as to whether it binds subsequent third-
party owners of the Majority Shares.  As a result, it should be construed against the rights 
of the Holder, Daniel.  That means the Irrevocable Proxy does not run with the Majority 
Shares in a sale to an unaffiliated third party.  
 
60 Bank of New York Mellon Trust Co., N.A. v. Liberty Media Corp., 29 A.3d 225, 236 (Del. 2011). 
61 Genger Trial, 2010 WL 2901704 at *20 (finding that a proxy did not run with the shares because 
“the language of the Proxy itself does not plainly indicate that the Proxy was to run with the Shares 
if they are sold” and that “[e]ven if the language of the Proxy was ambiguous–which it is not–
public policy concerns require that the Proxy be strictly construed”). 
62 Id.  See also Eliason v. Englehart, 733 A.2d 944, 947 (Del. 1999) (finding a proxy to be 
revocable where the words expressly stating that it was an “Irrevocable Proxy” were only found 
in the instrument’s signature acknowledgement, not in the language of the proxy itself). 
 
26 
 
A. Irrevocable Proxies Are Strictly Construed  
In the opinion below, the Court of Chancery recognized that “under the Delaware 
model, stockholders are presumed to vote in their economic interest.”63  When stockholders 
vote in their economic interests, the collective vote of the stockholders “serve[s] the 
‘community of interest’ among all shareholders” and furthers the corporate goal of wealth 
maximization.64  This presumption underlies our Delaware courts’ preference to defer to 
the vote of disinterested stockholders.  “[T]he long-standing policy of our law has been to 
avoid the uncertainties and costs of judicial second-guessing when the disinterested 
stockholders have had the free and informed chance to decide on the economic merits of a 
transaction for themselves.”65   
 
63 Chancery Opinion, 273 A.3d at 808.  See, e.g., Crown EMAK Partners LLC v. Kurz, 992 A.2d 
377, 389 (Del. 2010) (affirming the Court of Chancery’s conclusion that no improper vote buying 
occurred since the economic and voting interests remained aligned when both sets of interests were 
transferred by the purchase agreement); Unitrin, Inc. v. Am. Gen. Corp., 651 A.2d 1361, 1380–81 
(Del. 1995) (noting that “stockholders are presumed to act in their own best economic interests 
when they vote in a proxy contest”).   
64 Crown EMAK Partners LLC, 992 A.2d at 388 (citing In re IXC Commc’ns, Inc. S’holders Litig., 
1999 WL 1009174, at *8 (Del. Ch. Oct. 27, 1999)); see also Corwin v. KKR Fin. Hldgs. LLC, 125 
A.3d 304, 314 (Del. 2015) (“In circumstances, therefore, where the stockholders have had the 
voluntary choice to accept or reject a transaction, the business judgment rule standard of review is 
the presumptively correct one and best facilitates wealth creation through the corporate form.”); 
Haft v. Haft, 671 A.2d 413, 421 (Del. Ch. 1995) (“A powerful argument can be advanced that 
generally the congruence of the right to vote and the residual rights of ownership will tend towards 
efficient wealth production.”). 
65 Corwin, 125 A.3d at 312–13; see also In re Lear Corp. S’holder Litig., 926 A.2d 94, 114–15 
(Del. Ch. 2007) (“Delaware corporation law gives great weight to informed decisions made by an 
uncoerced electorate.  When disinterested stockholders make a mature decision about their 
economic self-interest, judicial second-guessing is almost completely circumscribed by the 
doctrine of ratification.”) (internal footnotes omitted)).  This Court in Corwin explained the 
underlying rationale of our policy not to second-guess the informed choice of disinterested 
stockholders: 
 
27 
 
The legitimizing influence of a stockholder vote is premised upon the alignment of 
the economic and voting interests of stockholders.  However, innovations in technology 
and finance have made it easier to separate the voting interests from the financial interests 
of shares.66  Early Delaware courts were suspicious of such arrangements.67  In Schreiber 
v. Carney,68 for example, our Court of Chancery examined the state of the law as it related 
 
When the real parties in interest—the disinterested equity owners—can easily 
protect themselves at the ballot box by simply voting no, the utility of a litigation-
intrusive standard of review promises more costs to stockholders in the form of 
litigation rents and inhibitions on risk-taking than it promises in terms of benefits 
to them.  The reason for that is tied to the core rationale of the business judgment 
rule, which is that judges are poorly positioned to evaluate the wisdom of business 
decisions and there is little utility to having them second-guess the determination 
of impartial decision-makers with more information (in the case of directors) or an 
actual economic stake in the outcome (in the case of informed, disinterested 
stockholders).”   
Corwin, 125 A.3d at 313–14 (emphasis added) (internal footnote omitted).    
66 Crown EMAK Partners LLC, 992 A.2d at 387–88 (citing Robert B. Thompson & Paul H. 
Edelman, Corporate Voting, 62 Vand. L. Rev. 129, 153 (2009)).  Innovations have also led to the 
rise in dual-, multi-, and zero-class voting structures, as opposed to the “one share-one vote” 
default rule memorialized in our 8 Del. C. § 212(a).  See David T. White, Delaware’s Role in 
Handling the Rise of Dual-, Multi-, and Zero-Class Voting Structures, 45 Del. J. Corp. L. 141 
(2020); Thompson & Edelman, supra, at 158–60.   
67 See e.g., Oceanic Exploration Co. v. Grynberg, 428 A.2d 1, 7 (Del. 1981) (observing that 
“[v]oting trusts were viewed with ‘disfavor’ or ‘looked upon . . . with indulgence’ by the courts” 
and “other contractual arrangements interfering with stock ownership, such as irrevocable proxies, 
were viewed with suspicion’”) (citing Perry v. Missouri-Kansas Pipe Line Co., 191 A. 823, 827 
(Del. Ch. 1937))); Haft, 671 A.2d at 421 (“[I]t is appropriate to acknowledge that the corporate 
law has tended to distrust and discourage the separation of the shareholder claim as equity investor 
(i.e., the right to enjoy distributions on stock if, as, and when declared) from the right to vote stock.  
For example there was for many years a rather clear rule against the sale of a corporate vote 
unattached to the sale of the underlying stock.”) (internal footnote omitted) (evaluating whether a 
proxy was irrevocable); Commonwealth Assocs. v. Providence Health Care, Inc, 641 A.2d 155, 
157 (Del. Ch. 1993) (“The law has long discouraged the sale of votes unconnected to the sale of 
stock.”); Macht v. Merchants Mortgage & Credit Co., 194 A. 19, 22 (Del. Ch. 1937) (“To allow 
voting rights that are bought to be exercised is against public policy, and would be in fraud of the 
other stockholders.”).  
68 447 A.2d 17 (Del. Ch. 1982). 
 
28 
 
to vote-buying.69  It clarified that “an agreement involving the transfer of stock voting 
rights without the transfer of ownership is not necessarily illegal and each arrangement 
must be examined in light of its object or purpose.”70   
Nearly three decades later, this Court, in Crown EMAK Partners LLC, again 
examined a challenged vote-buying arrangement.  We recognized that the separation of 
voting power and economic interest should be subject to greater scrutiny because it 
“compromises the ability of voting to perform its assigned role.”71  We affirmed the Court 
of Chancery’s conclusion that no improper vote buying had occurred in that case “because 
the economic interests and the voting interests of the shares remained aligned.”72  We 
explained: 
For many years, Delaware decisions have expressed consistent concerns 
about transactions that create a misalignment between the voting interest and 
the economic interest of shares. As then Vice–Chancellor (now Chief Justice) 
 
69 The Schreiber court defined vote-buying as “a voting agreement supported by consideration 
personal to the stockholder, whereby the stockholder divorces his discretionary voting power and 
votes as directed by the offeror.”  Id. at 23.  
70 Id. at 25.  
71 Crown EMAK Partners LLC, 992 A.2d at 388 (citing Thompson & Edelman, supra note 66, at 
153).  The Crown EMAK Court further quoted Thompson and Edelman: “They concluded that ‘[a] 
decisionmaking system that relies on votes to determine the decision of the group necessarily 
requires that the voters’ interest be aligned with the collective interest.  [Therefore, i]t remains 
important to require an alignment between share voting and the financial interest of the shares.”  
Id. (alteration in original); see also Commonwealth Assocs., 641 A.2d at 157 (noting law’s historic 
concern about “the sale of votes unconnected to the sale of stock” in part because “such sales 
misalign the interests of voters and the interests of the residual corporate risk bearers”).  
Accordingly, Delaware law requires that an irrevocable proxy be “coupled with an interest” 
whether “in the stock itself” or “in the corporation generally.”  8 Del. C. § 212(e) (“A duly executed 
proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled 
with an interest sufficient in law to support an irrevocable power. A proxy may be made 
irrevocable regardless of whether the interest with which it is coupled is an interest in the stock 
itself or an interest in the corporation generally.”). 
72 Crown EMAK Partners LLC, 992 A.2d at 390.   
 
29 
 
Steele explained, “[g]enerally speaking, courts closely scrutinize vote-
buying because a shareholder who divorces property interest from voting 
interest [ ] fails to serve the ‘community of interest’ among all shareholders, 
since the ‘bought’ shareholder votes may not reflect rational, economic self-
interest arguably common to all shareholders.” Again, in this case, the Court 
of Chancery recognized that “[w]hat legitimizes the stockholder vote as a 
decision-making mechanism is the premise that stockholders with economic 
ownership are expressing their collective view as to whether a particular 
course of action serves the corporate goal of stockholder wealth 
maximization.”73 
 
A proxy instrument is evidence of an agency relationship wherein the beneficial 
owner-principal appoints a proxy holder-agent as attorney-in-fact with respect to the voting 
rights of the shares.74  Thus, by its very nature, a proxy, which temporarily splits the power 
to vote from the residual ownership claim of the stockholder, has the potential to create 
misalignment between the voting interest and the economic interest of shares.  As the Court 
of Chancery noted, the risks of significant divergence of interests between the proxy holder 
and the holder of the residual interests are enhanced where the proxy is irrevocable.  That 
is because an irrevocable proxy, unlike a revocable proxy which is typically of relatively 
short duration and is revocable by the grantor, frees the holder from “the unilateral control 
of the grantor.”75  Here, not only is the proxy arrangement irrevocable, but Daniel asks this 
 
73 Crown EMAK Partners LLC, 992 A.2d. at 388 (first quoting In re IXC Commc’s, Inc. S’holders 
Litig., 1999 WL 1009174, at *8; then quoting Kurz v. Holbrook, 989 A.2d 140, 178 (Del. Ch. 
2010)).  
74 See Eliason, 733 A.2d at 946 (“A proxy is evidence of an agent’s authority to vote shares owned 
by another.”) (citing Duffy v. Loft, Inc.,  151 A. 223, 227 (Del. Ch.), aff’d, 152 A. 849 (Del. 
1930))); Moran v. Household Int’l, Inc., 500 A.2d 1346, 1355 (Del. 1985) (“[I]t has long been 
recognized that the relationship between grantor and recipient of a proxy is one of agency, and the 
agency is revocable by the grantor at any time.”).  
75 Haft, 671 A.2d at 421.   
 
30 
 
Court to find that it runs with the Majority Shares, binding a future owner to an agent that 
may or may not be economically aligned.   
As our approach to vote-buying arrangements and voting trusts has liberalized with 
innovations in technology and finance, so, too, has our approach to proxy arrangements. 76  
Still, because of the concerns arising from a decoupling of the voting and economic interest 
in shares, “[h]istorically, proxies have been interpreted narrowly and when there is an 
ambiguity, read as not restricting the right to vote the shares.”77  When interpreting an 
irrevocable proxy, Delaware courts do not turn to extrinsic evidence to resolve an 
ambiguity.  Rather, they construe the irrevocable proxy in favor of the rights of the 
 
76 See Oceanic Exploration Co. v. Grynberg, 428 A.2d 1, 7 (Del. 1981).  In finding that the trial 
court erred in holding that a contract among stockholders was a “voting trust” within the meaning 
of 8 Del. C. § 218(a) and (b), we observed: 
[I]t is important to recognize there has been a significant change from the days of 
our original 1925 statute. Voting trusts were viewed with “disfavor” or “looked 
upon . . . with indulgence” by the courts.  Other contractual arrangements 
interfering with stock ownership, such as irrevocable proxies, were viewed with 
suspicion. The desire for flexibility in modern society has altered such restrictive 
thinking. The trend of liberalization was markedly apparent in the 1967 changes to 
our own [8 Del. C. § 218]. Voting or other agreements and irrevocable proxies were 
given favorable treatment and restrictive judicial interpretations as to the absolute 
voiding of voting trusts for terms beyond the statutory limit were changed by 
statute.  
Id. (alteration in original) (citing E. FOLK, The Delaware General Corporation Law § 218 at 240–
42 (1972)).  
Further, in 1967, the General Assembly amended 8 Del. C. § 212(c) (now § 212(e)) to clarify that 
a proxy may be made irrevocable “regardless of whether the interest with which it is coupled is an 
interest in the stock itself or an interest in the corporation generally.”  8 Del. C. § 212(e).  The 
language added in 1967 (“an interest in the corporation generally”) was intended to address a 
suggestion in In re Chilson, 168 A. 82 (Del. Ch. 1933) that in order to support irrevocability, the 
holder had to have an interest in the stock itself.  
77 Genger Trial, 2010 WL 2901704, at *20.  
 
31 
 
beneficial owner of the shares.78  Here, the Irrevocable Proxy does not run with the 
Majority Shares unless its plain language clearly and unambiguously provides that it 
does.79  The Court of Chancery read the Irrevocable Proxy as a whole, painstakingly 
examining the preamble, recitals, each operative provision, and the Addendum, and 
concluded that it does not.  For the reasons discussed below, we agree.  
B. The Plain Language of the Irrevocable Proxy 
On appeal, Daniel contends that the plain language of the Irrevocable Proxy 
provides that it runs with the Majority Shares and that the Court of Chancery erred in three 
ways in concluding otherwise.  Daniel’s first two arguments concern the provision 
regarding non-termination of the Irrevocable Proxy (the “Non-Termination Provision”).  
His final argument concerns the provision governing assignment of rights under the 
Irrevocable Proxy (the “Assignment Provision”).  Daniel does not challenge other of the 
Court of Chancery’s findings supporting its opinion.80  
 
78 See id. (finding that because “language of the Proxy itself does not plainly indicate that the Proxy 
was to run with the Shares if they are sold,” they did not and that “[e]ven if the language of the 
Proxy was ambiguous . . . public policy concerns require that the Proxy be strictly construed”).   
79 See generally Urdan v. WR Cap. Partners, LLC, 2019 WL 3891720, at *11 (Del. Ch. Aug. 19, 
2019) (“If a seller wishes to retain a subset of the rights associated with the transferred shares, such 
as the right to assert a direct claim, then the parties to the transaction must provide specifically for 
that outcome.”), aff’d, 244 A.3d 668 (Del. 2020); In re Activision Blizzard, Inc. S’holder Litig., 
124 A.3d 1025, 1050 (Del. Ch. 2015) (“When a share of stock is sold, the property rights associated 
with the shares, including any claim for breach of those rights and the ability to benefit from any 
recovery or other remedy, travel with the shares.”).   
80 The Irrevocable Proxy provides that its terms shall be governed by the law of the State of 
California “[e]xcept to the extent required by the corporate or other provisions of the laws of the 
Cayman Islands.”  App. to Opening Br. at A035 (Irrevocable Proxy at 2, ¶ 3).  Despite the 
Irrevocable Proxy’s choice of law provision, the parties have relied almost entirely on Delaware 
law in litigating this case.  We, like the Court of Chancery, follow the parties’ lead and interpret 
the Irrevocable Proxy according to Delaware law.  Chancery Opinion, 273 A.3d at 810 n.21.  
 
32 
 
We first address several findings of the Court of Chancery which Daniel does not 
challenge on appeal, but which support our conclusion that the Irrevocable Proxy does not 
run with the Majority Shares.  We then address each of Daniel’s arguments in turn.  
1. The Court of Chancery’s Unchallenged Findings   
The Court of Chancery began its analysis of the Irrevocable Proxy with an overview 
of its plain language.  It found that (1) the definitions of “Stockholder” and “Shares” in the 
preamble, (2) the plain language of the Appointment Provision (defined below), and (3) 
the presence of the Addendum, all weighed in favor of Appellee’s reading of the 
Irrevocable Proxy.81  Daniel does not challenge these findings on appeal.  The force of 
these unchallenged findings undermines Daniel’s arguments that the Court of Chancery 
erred in finding that the Irrevocable Proxy runs with the Majority Shares.  
a. The Definitions of “Stockholder” and “Shares” Limit the Irrevocable Proxy to 
Only Those Shares Owned By Pike, Then By Old MedApproach, and Now By the 
Partnership  
The Irrevocable Proxy is the instrument by which the owner of the Majority Shares 
granted the Holders the authority to exercise the Majority Shares’ attendant voting rights.  
The preamble of the Irrevocable Proxy defines the “Stockholder” as “Joseph D. Pike.”82  It 
does not include language that would include subsequent holders of the Majority Shares.  
The Addendum provides that, at any time that Old MedApproach or a MedApproach 
 
81 The trial court’s opinion discusses additional recitals which it analyzed in the context of Daniel’s 
suggestion that the Irrevocable Proxy was intended to be a permanent corporate governance 
arrangement.  See supra note 29.  
82 App. to Opening Br. at A034 (Irrevocable Proxy at 1).  
 
33 
 
Person holds the Proxy Shares, all references to “Stockholder” in the Irrevocable Proxy 
shall refer to the MedApproach stockholder.83  Therefore, every reference to “Stockholder” 
in the Irrevocable Proxy is only to Pike initially, then Old MedApproach, and now, to the 
Partnership.84  
The first recital in the Irrevocable Proxy defines the “Shares” as “an aggregate of 
100 shares [ ] of the Common Stock, $1.00 par value, of [Danco GP]” of which “the 
Stockholder is the sole beneficial owner.”85  In other words, they are the “Shares” that were 
owned by Pike at the time he executed the Irrevocable Proxy. 86   Now they are the “Shares” 
owned by the Partnership.  
The narrow definitions of “Stockholder” and “Shares,” carried through the 
Addendum and the Agreement To Be Bound, do not evince an intent by the parties for the 
Irrevocable Proxy to run with the Majority Shares.  Instead, the two definitions cabin the 
applicability of the Irrevocable Proxy to those shares owned by Old MedApproach or any 
other MedApproach Person who has agreed to be bound by the Irrevocable Proxy and has 
become a “Stockholder.”  In short, as the Court of Chancery found, “there is nothing in the 
 
83 Id. at A039 (Irrevocable Proxy at 5). 
84 See id. at A370 (Agreement To Be Bound By Irrevocable Proxy And Power Of Attorney) (“[The 
Partnership] hereby joins, becomes a party to, and agrees to be bound as a ‘Stockholder’ by the 
provisions, terms and conditions of, and shall be entitled to all rights, benefits and remedies as a 
‘Stockholder’ under [the Irrevocable Proxy] . . . .”).  
85 Id. at A034 (Irrevocable Proxy at 1).  
86 Chancery Opinion, 273 A.3d at 813.  
 
34 
 
preamble or recitals standing alone that would suggest the Irrevocable Proxy runs with the 
Majority Shares.”87 
b. The Appointment Provision Indicates the Holders Are Only Appointed as to the 
Shares Pike Owned During the Term of the Irrevocable Proxy  
The first operative provision of the Irrevocable Proxy is the provision that grants 
Daniel, Freeman, and Rush the power to exercise the Proxy Shares’ voting rights (the 
“Appointment Provision”).88  The Appointment Provision states in relevant part: 
The Stockholder hereby constitutes and appoints each Holder, during the 
term of this Irrevocable Proxy, as the Stockholder’s true and lawful proxy 
and attorney-in-fact, with full power of substitution, to vote all of the Shares 
plus any additional Shares which Stockholder may own or hold as of the date 
of any such vote (and any all [sic] securities issued or issuable in respect 
thereof) which Stockholder is entitled to vote (collectively, the “Proxy 
Shares”), for and in the name, place and stead of the Stockholder, at any 
annual, special or other meeting of the stockholders of the Company, and at 
any adjournment or postponement thereof, or pursuant to any consent in lieu 
of a meeting or otherwise.89 
This Court examined a similar appointment provision in Genger,90 where it upheld 
the Court of Chancery’s finding that the proxy there did not run with the associated shares.  
The appointment provision of the proxy in Genger provided that: 
The [Sagi Trust] . . . does hereby constitute and appoint Arie Genger . . . to 
vote as its proxy, all shares of common stock of [Trans–Resources] which 
 
87 Id. at 814.  
88 The Appointment Provision creates the agency relationship under Delaware law.  It both 
appoints someone — the Holders — to vote the shares, see Loboto v. Health Concepts IV, Inc., 
606 A.2d 1343, 1347 (Del. Ch. 1991), and “identif[ies] the shares to be voted by the agent,” 
Eliason, 733 A.2d at 946.  
89 App. to Opening Br. at A034 (Irrevocable Proxy at 1, ¶ 1).  
90 26 A.3d 180.  
 
35 
 
are now or hereafter owned by the Trust, at any and all meetings of the 
stockholders of Trans–Resources . . . .91 
 
This Court looked at the proxy’s plain language  and agreed that the proxy “would 
attach only to those [Trans–Resources] shares that were ‘now or hereafter owned by the 
Trust.’”92  Because there was no provision explicitly providing that shares owned by a 
subsequent owner would be covered by the proxy and the proxy plainly only applied to 
those shares “owned by the Trust,” the proxy did not run with the shares at issue.93  
Here, the Appointment Provision states that Pike, as the Stockholder, appointed the 
Holders to be his proxy and attorney-in-fact “to vote all of the Shares plus any additional 
Shares which Stockholder may own or hold as of the date of any such vote (and any all [sic] 
securities issued or issuable in respect thereof) which Stockholder is entitled to vote.”  The 
Appointment Provision here goes one step further than that in Genger, clarifying that the 
Holders may vote the shares “for and in the name, place and stead of the Stockholder.”  As 
in Genger, by its plain language, the appointment is only with respect to shares of Danco 
GP owned by “the Stockholder” at the time of a vote and the authority only extends as far 
as that of the Stockholder.  As discussed above, because “Stockholder” is defined only as 
Pike, and later Old MedApproach and the Partnership, the provision indicates that the 
Irrevocable Proxy does not run with the Majority Shares. 
 
91 Id. at 198 (alteration in original) (emphasis in original). 
92 Id. 
93 Id. (“The Proxy contains no provision that would bind any subsequent owner of those shares. 
Once sold or transferred to a subsequent owner, those shares were no longer ‘owned by the [Sagi] 
Trust’ and therefore, were no longer subject to the Proxy.”) (emphasis in original).  
 
36 
 
c. The Addendum Demonstrates That the Drafters Did Not Intend Subsequent Buyers 
to Be Bound by The Irrevocable Proxy Absent Their Agreement to Be Bound  
As discussed above, the initial Settlement Agreement contemplated that certain 
Participating Investors, defined as Old MedApproach, Freeman, Rush, and importantly, 
any other limited partner of Danco LP who wanted to sign onto the Settlement Agreement, 
would fund the Pike Loan to purchase the Majority Shares from Pike.  Days later, the LP 
Representatives determined that offering the opportunity to all limited partners of Danco 
LP was impracticable and threatened to delay the deal, so the parties agreed instead that 
Old MedApproach alone would purchase the Majority Shares.  As a result, Old 
MedApproach executed the Addendum, agreeing to be bound to the Irrevocable Proxy once 
it received the Majority Shares from Pike.94   
Daniel testified that the Addendum was prepared primarily by Popco’s attorney and 
executed at its request.95  The Addendum, described by the Court of Chancery as a “drafting 
monstrosity” and “not a model of clarity,”96 consists entirely of the following paragraph: 
At any time that [Old MedApproach], or its affiliates, owners, designees or 
nominees (or their respective successors or assigns) (each a “MedApproach 
Person”) is a beneficial or record holder of any of the Shares or any of the 
Proxy Shares, [Old MedApproach] hereby agrees (and agrees to cause each 
other MedApproach Person to agree) that references in this Irrevocable 
Proxy to “Stockholder” shall mean and include [Old MedApproach] (or such 
MedApproach Person) with references to “the date hereof” in Section 2(a) 
being instead a reference to the date of closing under the Agreement), and 
 
94 Chancery Opinion, 273 A.3d at 829.   
95 See id. at 829; App. to Opening Br. at A546 (W. B. Daniel Trial Testimony at 146–47).  The 
trial court found that Popco’s attorney “did not believe that the language of the Irrevocable Proxy, 
standing alone, was sufficient to bind Old MedApproach to the Irrevocable Proxy.”  Chancery 
Opinion, 273 A.3d at 829.  
96 Chancery Opinion, 273 A.3d at 830.   
 
37 
 
that [Old MedApproach] is bound (and [Old MedApproach] agrees not to 
transfer any such shares to any other MedApproach Person unless such 
transferee agrees in writing satisfactory to the [ ] Holders (other than W. 
Bradley Daniel) to be bound) by this Irrevocable Proxy as the Stockholder; 
provided, however, no MedApproach Person shall be deemed the 
Stockholder for purposes of Section 2 hereof. [Old MedApproach] agrees to 
duly authorize, execute and deliver a restated Irrevocable Proxy reflecting 
the foregoing promptly after the closing under the Agreement and such other 
agreements or documents as are reasonably necessary or appropriate to carry 
out the intent of the foregoing.97  
The existence of the Addendum suggests that the parties to the Irrevocable Proxy, 
and Popco, understood at the time of its execution that the Irrevocable Proxy would not run 
with the Majority Shares.  If the terms of the Irrevocable Proxy provided it would run with 
the Majority Shares, then there would be no need to execute an Addendum to bind Old 
MedApproach.  In short, the court found that “the parties entered into the Addendum to 
ensure that the Irrevocable Proxy would bind the one subsequent owner that they knew 
about — Old MedApproach.”98 
The Addendum not only provides that Old MedApproach will become a 
“Stockholder” for purposes of the Irrevocable Proxy, but also, it contains a transfer 
restriction at the end of the first sentence (the “Transfer Restriction”).  The Court of 
Chancery found that the Transfer Restriction (1) “applies to any transfer by one 
MedApproach Person to another MedApproach Person,” and (2) that “a MedApproach 
Person only means an entity or individual affiliated with Old MedApproach, not a third 
 
97 App. to Opening Br. at A039–40 (Irrevocable Proxy at 5–6).  
98 Chancery Opinion, 273 A.3d at 814.  
 
38 
 
party.”99  Accordingly, the Transfer Restriction obligates Old MedApproach to ensure that 
in any transfer to an affiliated entity, the affiliated entity agrees to be bound by the 
Irrevocable Proxy.  Further, the Addendum does not restrict a transfer to an unaffiliated 
third party.100  
The Transfer Restriction demonstrates that the parties to the Irrevocable Proxy did 
not believe that it ran with the Majority Shares upon their sale.  If it did run with the 
Majority Shares, then there would be no need for the Transfer Restriction, let alone the 
Addendum.  Any buyer of the Majority Shares would already be bound by the Irrevocable 
Proxy by its terms and there would be no need for the MedApproach Person-seller to 
enforce the proxy against any MedApproach Person-buyer.  The Transfer Restriction also 
demonstrates that the parties knew how to restrict a transfer of the Majority Shares but only 
elected to apply that restriction to a narrow set of transfers.101 
These three aspects of the Irrevocable Proxy — the definitions of Stockholder and 
Shares, the language in the Appointment Provision, and the presence of the Addendum and 
Transfer Restriction — all indicate that the parties did not intend the Irrevocable Proxy to 
run with the Majority Shares.  In the face of these findings, along with the need to show in 
clear and unambiguous language that the Irrevocable Proxy runs with the Majority Shares, 
Daniel faces an uphill battle in demonstrating that the Court of Chancery erred.  To win 
 
99 Id. at 832.  
100 Id.  The trial court’s unchallenged interpretation of the Transfer Restriction reinforces that the 
Addendum does not restrict a transfer to an unaffiliated third party (i.e., persons other than a 
MedApproach Person). 
101 Id.  
 
39 
 
the battle, he must show that the remaining provisions of the Irrevocable Proxy 
unambiguously overcome the foregoing plain language.  As explained below, Daniel fails 
in his challenge.   
2. The Non-Termination Provision 
Daniel’s first two arguments on appeal concern the Non-Termination Provision in 
the Irrevocable Proxy.  He argues that the Non-Termination Provision “memorialized the 
parties’ intent for the proxy to survive a sale of the shares and bind subsequent owners.”102  
The Non-Termination Provision, found in paragraph five of the Irrevocable Proxy, reads 
in its entirety, as follows:  
The Stockholder agrees that such Irrevocable Proxy is coupled with an 
interest sufficient in law to support an irrevocable power and shall not be 
terminated by any act of the Stockholder (other than in connection with the 
termination provisions of Section 4 hereof), by death or disability of the 
Stockholder, by lack of appropriate power or authority or by the occurrence 
of any other event or events other than as provided in Section 4 hereof.103  
Daniel argues that the words “by any act of the Stockholder” and “or by the occurrence of 
any other event or events” include the sale of the Majority Shares by the Stockholder.  
Therefore, a sale of the Majority Shares by the Stockholder would not terminate the 
Irrevocable Proxy.   Under Daniel’s reading, the provision “communicates that only the 
circumstances of Section 4 may result in termination of the Irrevocable Proxy.”104    
 
102 Opening Br. at 21.  
103 App. to Opening Br. at A035 (Irrevocable Proxy at 2, ¶ 5) (emphasis added).  
104 Opening Br. at 21.  The Court of Chancery referred to Section 4 as the “Termination Provision.”  
The Termination Provision provides that: 
This Irrevocable Proxy shall terminate immediately upon the occurrence of any of 
the following: (i) the merger or other reorganization of [Danco GP] in connection 
 
40 
 
The Court of Chancery rejected Daniel’s reading of the Non-Termination Provision.  
It found that “the more natural reading is that the Non-Termination Provision confirms that 
the Stockholder cannot terminate the Irrevocable Proxy while owning the Majority Shares” 
but “does not say anything about whether the Irrevocable Proxy binds a subsequent 
owner.”105 
On appeal, Daniel argues that the Court of Chancery erred with respect to the Non-
Termination Provision in two ways: (1) first, it erroneously read the provision, primarily 
the language “by any act of the Stockholder,”  against default principles in the Restatement 
(Third) of Agency, which themselves are contrary to Delaware law,106 and (2) second, it 
effectively read additional language into the provision to conclude that the broad catch-all 
language “any other event or events” did not include a sale of the Majority Shares.107  We 
address each argument in turn.  
a. The Court of Chancery’s Reference to Default Principles of Common Law Was 
Not Essential to its Holding  
 
Daniel argues that the phrase “any act of the Stockholder” in the Non-Termination 
Provision includes the sale of the Majority Shares by the Stockholder.  The Court of 
 
with the formation of “Newco” as contemplated in the [Settlement Agreement], but 
only if and to the extent the terms and conditions of the documentation pursuant to 
which such merger or other reorganization is effected expressly refer to this 
Irrevocable Proxy and expressly provide that this Irrevocable Proxy shall terminate 
pursuant to such documents; or (ii) upon notice of termination given by the Holders 
to the Stockholder.  App. to Opening Br. at A035 (Irrevocable Proxy at 2, ¶ 4).  
105 Chancery Opinion, 273 A.3d at 819.   
106 Opening Br. at 22–23. 
107 Id. at 28. 
 
41 
 
Chancery concluded that Daniel’s reading was “one possible reading” but “[t]he better 
reading is that the concept of an ‘act of the Stockholder’ encompasses acts that the principal 
might take to terminate the agency relationship while remaining the owner of the Majority 
Shares.”108 
Explaining why its reading was the better one, the Court of Chancery determined 
that the Non-Termination Provision tracks the following categories in Section 3.13 of the 
Restatement (Third) of Agency wherein, “[u]nless otherwise agreed, neither a power given 
as security nor a proxy made irrevocable” will be terminated by:  
(a) a manifestation revoking the power or proxy made by the person who 
created it; or 
. . .  
(c) loss of capacity by the creator or the holder of the power or proxy; or 
. . .  
(e) death of the creator of the power or proxy, if the power or proxy is given 
as security for the performance of a duty that does not terminate with the 
death of its creator.109 
According to the Court of Chancery, the language “by any act of the Stockholder” reflects 
the common law principle stated in clause (a) of the Restatement that “a manifestation 
revoking the power or proxy made by the person who created it” will not terminate an 
irrevocable proxy “[u]nless otherwise agreed.”110  Thus, it found that the Non-Termination 
 
108 Chancery Opinion, 273 A.3d at 820.  
109 RESTATEMENT (THIRD) OF AGENCY § 3.13(2) (Am. Law. Inst. 2006), available at Westlaw 
(database updated Oct. 2022).   
110 Chancery Opinion, 273 A.3d at 819, 820.  Daniel similarly argued that the phrase “death or 
disability of the Stockholder” in the Irrevocable Proxy should be read to include the dissolution 
and winding up of the Partnership.   The Court of Chancery rejected Daniel’s “death or disability” 
argument, concluding that “death or disability” is materially different than dissolution and that the 
phrase, instead, mirrored the common law principles stated in clause (c) and (e) of the Restatement.  
 
42 
 
Provision, “is not a bespoke provision designed to make the Irrevocable Proxy run with the 
Majority Shares.”111 
Moreover, it determined that Daniel’s reading of the phrase “any act of the 
Stockholder” conflicts with the common law principles in the Restatement.112 In Section 
3.13(1), the Restatement (Third) provides: 
A power given as security or an irrevocable proxy is terminated by an event 
that 
 
(a) discharges the obligation secured by the power or terminates the 
interest secured or supported by the proxy, or 
(b) makes its execution illegal or impossible, or 
(c) constitutes an effective surrender of the power or proxy by the 
person for whose benefit it was created or conferred.113  
Comment b to Section 3.13 explains that, under the above circumstances “irrevocable 
proxies will always terminate.”114 
Accordingly, the Court of Chancery concluded that, absent express language to the 
contrary, a sale of shares that is the subject of an irrevocable proxy terminates the 
irrevocable proxy under the principle stated in clause (b).  This is because: 
 
Id. at 821–22 (“There are multiple difficulties with Daniel’s reading.  First, death is not the same 
as dissolution . . . Second, the reference to ‘death or disability’ tracks the common law concepts 
framed in Sections 3.13(2)(c) and (e) of the Restatement . . . The clear distinction between the 
consequences of death or disability and the consequences of a sale mean that the reference to ‘death 
or disability’ in the Irrevocable Proxy does not cause the Irrevocable Proxy to run with the Majority 
Shares.”).  Daniel does not challenge this finding on appeal.  
111 Id. at 819–20. 
112 Id. at 820.  
113 RESTATEMENT (THIRD) OF AGENCY § 3.13(1).  
114 Id. at § 3.13 cmt. b. 
 
43 
 
After a sale, the grantor no longer has the right to vote the shares that are the 
subject of the proxy.  Instead, the right belongs to the subsequent owner.  The 
proxyholder cannot exercise the grantor’s right to vote because the grantor 
no longer possesses that right.  Consequently, absent specific and express 
language to the contrary, an irrevocable proxy terminates “when it is no 
longer possible for the proxyholder to vote because the grantor of the proxy 
no longer owns the securities or membership interest.”115  
The Court of Chancery added that “[o]nly if the purchaser both knows about an irrevocable 
proxy and the irrevocable proxy contains plain and unambiguous language binding a 
subsequent owner will the purchaser acquire the shares subject to the irrevocable proxy.”116   
Daniel articulates three reasons why the Court of Chancery’s reliance on the 
Restatement (Third) of Agency constitutes legal error.  Although we address Daniel’s 
arguments for completeness, we conclude that the Court of Chancery’s discussion of the 
Restatement was not essential to its ultimate holding, and regardless of the merits (or lack 
thereof) of his contentions about the Restatement, Daniel still fails to show that the 
Irrevocable Proxy clearly and unambiguously provides that it runs with the Majority 
Shares.  
i. 
Daniel’s Reliance on Stream TV is Misplaced  
First, Daniel argues that the trial court’s finding that the Irrevocable Proxy “tracked” 
three of the five termination events listed in the Restatement was erroneous, and therefore, 
 
115 Chancery Opinion, 273 A.3d at 820 (quoting RESTATEMENT (THIRD) OF AGENCY § 3.13 cmt. 
b).  
116 Id. (emphasis in original).  
 
44 
 
under this Court’s decision in Stream TV,117 it was improper for the trial court to rely on 
the Restatement (Third) to interpret the contractual language.118    
Daniel’s’ reliance on Stream TV is misplaced.  The question before this Court in 
Stream TV was whether the approval of the Class B stockholders of Stream TV Networks, 
Inc. (“Stream Inc.”), was required before Stream Inc. could enter into an agreement to 
transfer and assign all rights, title and interest in all of the company’s assets for the benefit 
of certain of its creditors (the “Stream Omnibus Agreement”).119   Stream Inc.’s charter 
provided that a majority vote of the Class B stockholders was required for the company to 
undertake certain corporate actions, including an “Asset Transfer.”  The charter defined 
“Asset Transfer” as a “sale, lease or other disposition of all or substantially all of the assets 
or intellectual property” of Stream Inc., and the granting of certain intellectual property 
licenses of Stream Inc.120  This Court found that the plain meaning of “other disposition” 
included the transfer and assignment of all rights, title and interest in all of the company’s 
assets for the benefit of its creditors.121  Therefore, the Stream Omnibus Agreement needed 
to be approved by the majority of Stream Inc.’s Class B stockholders.   
In so holding, this Court reversed the Court of Chancery’s determination that Stream 
Inc.’s board of directors unilaterally could cause Stream Inc. to enter into the Stream 
 
117 279 A.3d 323.   
118 Opening Br. at 23–24.  
119 Stream TV, 279 A.3d at 340. 
120 Id. at 338 (emphasis added). 
121 Id. at 340.  
 
45 
 
Omnibus Agreement.  The Court of Chancery had found that although the Stream Omnibus 
Agreement contemplated an “Asset Transfer,” the charter provision “tracked” Section 271 
of the Delaware General Corporation Law and thus “warrant[ed] the same 
interpretation.”122  Rather than looking to the plain language of Stream Inc.’s charter, the 
Court of Chancery looked to Section 271 as an interpretive guide.  It found that at the time 
of the enactment of Section 271’s predecessor statute, there was a common law insolvency 
exception in Delaware which allowed an insolvent company’s board of directors to 
unilaterally sell the assets of the company for the benefit of its creditors.  In effect, the 
Court of Chancery overrode the plain language of Stream Inc.’s charter in favor of a 
common law exception it concluded existed in Delaware and was not superseded by 
Section 271.  We also clarified in our Stream TV opinion that the insolvency exception 
identified by the Court of Chancery was superseded by the predecessor statute to Section 
271, if it ever existed in Delaware at all.123    
Daniel’s reliance on Stream TV fails because the Irrevocable Proxy is not plain and 
unambiguous that it runs with the Majority Shares.  The Court of Chancery did not ignore 
the plain language of the Irrevocable Proxy in favor of the common law rules in the 
Restatement (Third).  Rather, it found that “[i]n the abstract and read in isolation, the phrase 
‘any act of the Stockholder’ is susceptible to two meanings” and it looked to the 
 
122 Id. at 334 (quoting Stream TV Networks, Inc. v. SeeCubic, Inc., 250 A.3d 1016, 1045 (Del. Ch. 
2020)).   
123 Id. at 343.  
 
46 
 
Restatement (Third) to determine the more “persuasive” reading.124  This is evident by the 
court’s stating that Daniel’s reading of that provision was only “one possible reading,” as 
well as by the various other provisions, including the Addendum, which it found created 
ambiguity.  The Court of Chancery’s analysis could have stopped there because under 
Delaware law, ambiguity in an irrevocable proxy is construed against the rights of the 
proxy holder.125  If an irrevocable proxy does not unambiguously provide that it will run 
with the shares in a sale to a subsequent owner, then it does not do so.  As the Court of 
Chancery concluded, “the presence of ambiguity alone is sufficient to defeat Daniel’s 
argument.”126 
ii. 
The Date of Publication of the Restatement (Third) is Not Dispositive  
Second, Daniel places much weight on the fact that the Restatement (Third) was not 
published until 2006, nine years after the parties drafted and executed the Irrevocable 
Proxy.  He argues that as a result, the parties could not possibly have drafted the Irrevocable 
 
124 Chancery Opinion, 273 A.3d at 821 (“Read against the backdrop of the default common law 
rules concerning scenarios when irrevocable proxies terminate, given the presence of the 
Addendum, and without any explicit reference in the Non-Termination Provision to a sale of the 
Majority Shares, only Mrs. Hawkins’ reading is persuasive.”); see also Concord Real Estate CDO 
2006-1, Ltd. v. Bank of America N.A., 996 A.2d 324, 332 (Del. Ch. 2010) (“I look to the common 
law because this body of jurisprudence provides a backdrop of standard default rules that 
supplement negotiated agreements and fill gaps when a contract is incomplete, whether by 
inadvertence or design.”), aff’d, WL 743405 (Del. 2011) (TABLE). 
125 In other words, it did not need to “confirm” what the “more natural reading” was.  See Chancery 
Opinion, 273 A.3d at 819 (“Read in context and against the backdrop of the common law, the more 
natural reading is that the Non-Termination Provision confirms that the Stockholder cannot 
terminate the Irrevocable Proxy while owning the Majority Shares.”).   
126 Id. at 821. 
 
47 
 
Proxy with the default principles articulated in the Restatement (Third).127  This argument 
is unpersuasive for the same reason stated above.   
Because the Restatement (Third) is an articulation of existing common law,128 the 
relevant question is whether at the time the Irrevocable Proxy was executed, Delaware 
common law supported the principle cited in the Restatement (Third).  Daniel did not cite 
Delaware case law that establishes his view of the common law in Delaware in 1997 when 
the Irrevocable Proxy was executed.  However, we observe that the Court of Chancery 
recognized a principle similar to that stated in comment b several times prior to 1997.  In 
1941, the court recognized that “[t]he right to vote shares of corporate stock, having voting 
powers, has always been incident to its legal ownership.129 And in 1993, it stated that 
Delaware law presumes that “in the sale of the underlying stock . . . the seller is contracting 
to sell and assigns all of its rights, title and interest in the stock.”130  Similarly, in 1875, the 
 
127 Opening Br. at 24.  
128 See, e.g., Samson v. Smith, 560 A.2d 1024, 1027–28 (Del. 1989) (observing that the Restatement 
(Second) of Torts is “merely a formulation of well established common law principles”).   
129 In re Giant Portland Cement Co., 21 A.2d 697, 701 (Del. Ch. 1941); see also Giuricich v. 
Emtrol Corp., 449 A.2d 232, 239 (Del. 1982) (“As a general rule the right to vote shares of 
corporate stock having voting powers at stockholders’ meetings is an incident of their legal and 
record ownership.”) (citing Tracy v. Brentwood Village Corp., 59 A.2d 708, 709 (Del. Ch. 1948))); 
Norton v. Digital Applications, Inc., 305 A.2d 656, 659 (Del. Ch. 1973) (“The right to vote shares 
of stock issued by a Delaware corporation is an incident of legal ownership.”).   
130 Commonwealth Assocs., 641 A.2d at 158.  In considering the validity and enforceability of a 
negotiated provision providing for the retention of a “dangling” right to vote as of the record date 
in a post-record date sale of corporate stock, Chancellor Allen stated that “the legally presumed 
implication, in a sale of the underlying stock, would be that the seller is contracting to sell and 
assign all of its rights, title and interest in the stock, including its right to grant a consent or a 
revocation with respect to a past record date, and that upon request the seller will, in good faith, 
take such ministerial steps as are necessary (e.g., granting proxies) to effectuate that transfer.”  Id.  
 
48 
 
United States Supreme Court recognized the principle that all rights and obligations follow 
shares in a transfer of stock.131  These cases stand for the general proposition that, when 
legal ownership of stock is transferred, the right to vote such stock is transferred too.  
Although Genger Trial came later, we note that the principle of law articulated in Genger 
Trial requiring an irrevocable proxy to clearly and unambiguously state that it runs with 
shares in a transfer to a third party,132 suggests that the default common law rule is that 
voting rights follow the shares in a stock transfer.   
In any event, we need not resolve the debate about whether the rule provided in 
comment b of the Restatement (Third) — or some other rule as Daniel contends — was 
firmly established common law in Delaware at the time the Irrevocable Proxy was executed 
because the Court of Chancery’s discussion of the Restatement (Third) was not essential 
to its finding that the Irrevocable Proxy does not clearly and unambiguously state that it 
shall run with the Majority Shares. 133  Daniel’s arguments fail because at the most, his 
arguments show only that there are two reasonable ways to read the Non-Termination 
 
131 Webster v. Upton, 91 U.S. 65, 70 (1875) (“When an original subscriber to the stock of an 
incorporated company, who is so bound to pay the instalments on his subscription from time to 
time as they are called in by the company, transfers his stock to another person, such other person 
is substituted not only to the rights, but to the obligations, of the original subscriber, and he is 
bound to pay up the instalments called for after the transfer to him.”) (citing JOSEPH K. ANGELL & 
SAMUEL AMES, Treatise on the Law of Private Corporations § 534 (4th ed. 1852))).  
132 Genger Trial, 2010 WL 2901704, at *20 (“Even if the language of the Proxy was ambiguous–
which it is not–public policy concerns require that the Proxy be strictly construed.”). 
133 For the same reasons, we need not address Daniel’s third and final argument that the 
Restatement (Second) of Agency § 139 cmt. a (Am. Law Inst. 1958), which was the provision in 
effect when the Irrevocable Proxy was executed, conflicts with comment b, which he contends 
“represented a material change in the default principles.”  Opening Br. at 24–25; Reply Br. at 4.   
 
49 
 
Provision and, thus, the Irrevocable Proxy is ambiguous.134  For the public policy reasons 
discussed above, a showing of ambiguity requires us to construe the Non-Termination 
Provision narrowly, as the Court of Chancery did below, against the rights of the proxy 
holder.  
b. The Court of Chancery Did Not Err in Concluding that the Language “Any Other 
Event or Events” Does Not Include a Sale of the Majority Shares 
The Non-Termination Provision states that the Stockholder agrees that the proxy 
will not terminate in the specific situations discussed above, “or by the occurrence of any 
other event or events other than as provided in Section 4 hereof.”135  Daniel argues that this 
language serves as a catch-all for acts of the Stockholder and encompasses a sale of the 
Majority Shares.136  The Court of Chancery acknowledged the catch-all nature of this 
language but concluded that it was subject to “at least two interpretations.”137  Moreover, 
it concluded that “against the backdrop of the common law rules, in the presence of the 
Addendum, and in the absence of any reference to a transfer of the Majority Shares,” only 
one reading was reasonable, namely, that the catch-all encompassed only those actions 
taken by the Stockholder while the Stockholder owns the Majority Shares.138  On appeal, 
Daniel argues that the Court of Chancery improperly read the language “while the 
 
134 See Cox Commc’ns, Inc. v. T-Mobile US, Inc., 273 A.3d 752, 760 (Del. 2022) (“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.’”) (quoting Rhone-Poulenc Basic 
Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192, 1196 (Del. 1992))).    
135 App. to Opening Br. at A035 (Irrevocable Proxy at 2, ¶ 5). 
136 Opening Br. at 28.  
137 Chancery Opinion, 273 A.3d at 822. 
138 Id. 
 
50 
 
Stockholder owns the shares” into the Non-Termination Provision and did not give effect 
to the plain meaning of the catch-all language, which would include a sale of the Majority 
Shares as “any other event or events.”139 
First, Daniel’s contends that no Delaware authority requires the use of the word 
“transfer” or “sale” to manifest the parties’ intent for a proxy to run with the shares.140  
However, the Court of Chancery did not hold that, for an irrevocable proxy to run with 
shares, the proxy instrument must use the magic words “transfer” or “sale.”  Rather, the 
Court of Chancery held that for an irrevocable proxy to run with shares, the proxy 
instrument must evince the parties’ clear and unambiguous intent for it to do so.  In this 
case, the absence of the words “transfer” or “sale” supports the Court of Chancery’s finding 
that the Irrevocable Proxy did not evince such an intent, particularly in the face of how the 
word “transfer” is used elsewhere in the Irrevocable Proxy, the presence of the Addendum, 
and its unchallenged findings as to the Appointment Provision and the definitions of 
“Stockholder” and “Shares.”   
The Court of Chancery also relied on its opinion in Genger Trial,141 which we 
affirmed in relevant part.142  There, the Court of Chancery found that the absence of 
language regarding transferees in the assignment provision indicated the parties did not 
intend for the proxy to follow the shares.  The Court of Chancery stated: 
 
139 Opening Br. at 28.  
140 Id. at 29; Reply Br. at 9.  
141 2010 WL 2901704.  
142 Genger, 26 A.3d at 198 (“The Proxy contains no provision that would bind any subsequent 
owner of those shares.”) (emphasis in original). 
 
51 
 
If [the proxyholder] wanted to keep the Proxy after a transfer, he could have 
easily inserted clear language–such as “this Proxy shall bind any subsequent 
transferees”–into the Proxy to that effect. He did not, and thus there is no 
reason found in the text of the Proxy to indicate that it is binding upon the 
[subsequent transferee].143 
 
Daniel does not attempt to distinguish Genger Trial in his briefing on appeal, and the same 
reasoning applies here.   
Further, Daniel reads the Non-Termination Provision in a vacuum, apart from its 
context.  Mrs. Hawkins more persuasively considers the Non-Termination Provision in the 
context of the structure of the entire Irrevocable Proxy.  The Non-Termination Provision 
begins by saying that “[t]he Stockholder agrees,” meaning Pike.  The recitals and 
Appointment Provision indicate that the Irrevocable Proxy applies only to shares held by 
the Stockholder.  Absent the explicit language of a “transfer” or “sale,” a reasonable 
reading of the language “any other event” is that, consistent with the rest of the Non-
Termination Provision and the Irrevocable Proxy, it only applies to events occurring when 
the Stockholder (Pike and now the Partnership) owns the shares.  Daniel’s response that 
“an Irrevocable Proxy always represents a commitment of the stockholder at the time of 
execution since such person is the only one that has the power to grant the authority to the 
proxy holders to vote the shares”144 is unavailing because the definition of “Stockholder” 
only references Pike, and as explained by the Addendum, Old MedApproach or any other 
MedApproach Person who holds any of the Shares or any of the Proxy Shares and agrees 
 
143 Genger Trial, 2010 WL 2901704, at *20.  
144 Reply Br. at 6.  
 
52 
 
to be bound by the Irrevocable Proxy.  Again, the Court of Chancery’s unchallenged 
findings as to the significance of the definitions of “Shares” and “Stockholder,” or the 
Appointment Provision, support an alternative reasonable reading of the Irrevocable Proxy, 
and at the very least, render the contract ambiguous.  
We find Daniel’s counterargument that the “provision elsewhere makes clear that 
circumstances in which the Stockholder no longer owns the shares (e.g., the death of the 
Stockholder) will not affect a termination” more persuasive.145  Still, it only rises to the 
level of one possible interpretation of the Non-Termination Provision.  It does not 
overcome the Court of Chancery’s unchallenged findings and unambiguously provide that 
the Irrevocable Proxy shall run with the Majority Shares.  
Finally, Daniel claims that the Court of Chancery erred as a matter of law by relying 
on the existence of the Addendum because the Addendum was a separate agreement apart 
from the Irrevocable Proxy and it “was drafted by Popco and its counsel, not the giver of 
the Irrevocable Proxy.”146  He further argues that even if we were to consider the existence 
of the Addendum, the Addendum was only “belt and suspenders” and did not reflect an 
intent for the Irrevocable Proxy to run with the shares. 
To begin with, the Addendum is best viewed as part of the Irrevocable Proxy and 
not as extrinsic evidence, as Daniel claims.147  The Addendum is on “the face of the 
 
145 Opening Br. at 29; Reply Br. at 8–9.  
146 Opening Br. at 30.  
147 See Chancery Opinion, 273 A.3d at 811 (“In broad strokes, the Irrevocable Proxy consists of a 
preamble with recitals, fifteen operative provisions, and the Addendum.”).   
 
53 
 
contract”148 and is within “its four corners.”149  It is found in a single paragraph on the 
signature page to the Irrevocable Proxy — the same signature page that Pike signed as the 
Stockholder.150  It was also executed on the same day as the Irrevocable Proxy.  
Moreover, other facts undercut Daniel’s argument, including the Court of 
Chancery’s factual finding that Popco saw a need for the Addendum because it did not 
believe the Irrevocable Proxy would otherwise run with the Majority Shares.151  Based on 
the record, the trial court’s findings are not clearly erroneous.   
Finally, we find Daniel’s “belt-and-suspenders” argument unpersuasive because of 
the lack of clear language in the proxy instrument that the Irrevocable Proxy will run with 
the shares and the presence of the Transfer Restriction.  A “belt-and-suspenders” reading 
cuts against our preference to avoid redundancy in interpreting contracts.152  The 
 
148 See Evidence, BLACK’S LAW DICTIONARY (11th ed. 2019) (defining “extrinsic evidence” as 
“[e]vidence relating to a contract but not appearing on the face of the contract because it comes 
from other sources, such as statements between the parties or the circumstances surrounding the 
agreement”). 
149 See GMG Cap. Invs., LLC v. Athenian Venture P’rs. I, L.P., 36 A.3d 776, 783 (Del. 2012) 
(observing that, when applied, “the parol evidence rule bars the admission of evidence from 
outside the contract’s four corners to vary or contradict [ ] unambiguous language”).  
150 App. to Opening Br. at A039–40 (Irrevocable Proxy at 5–6). 
151 Chancery Opinion, 273 A.3d at 829 (citing W. B. Daniel Trial Testimony at 146–47).   
152 Compare Osborn, 991 A.2d at 1159 (“‘We will read a contract as a whole and we will give 
each provision and term effect, so as not to render any part of the contract mere surplusage.’  We 
will not read a contract to render a provision or term ‘meaningless or illusory.’”) (first citing Kuhn 
Construction, Inc. v. Diamond State Port Corp., 2010 WL 779992, at *2 (Del. Mar. 8, 2010); then 
citing Sonitrol Holding Co. v. Marceau Investissements, 607 A.2d 1177, 1183 (Del. 1992))), with 
Julius v. Accurus Aerospace Corp., 2019 WL 5681610, at *11 (Del. Ch. Oct. 31, 2019) (“While 
redundancy is sought to be avoided in interpreting contracts, this principle of construction does 
not go so far as to counsel the creation of contract meaning for which there is little or no support 
in order to avoid redundancy.”) (citing U.S. W., Inc. v. Time Warner Inc., 1996 WL 307445, at *15 
(Del. Ch. June 6, 1996))), aff’d, 241 A.3d 220 (Del. 2020).  See also ANTONIN SCALIA & BRYAN 
A. GARNER, Reading Law:  The Interpretation of Legal Texts 176 (2012) (“If a provision is 
 
54 
 
Addendum does not solely serve to clarify that the Irrevocable Proxy is binding on Old 
MedApproach; it also contains the Transfer Restriction.  The Court of Chancery found that 
the Transfer Restriction applies only to MedApproach Persons, as defined in the 
Addendum, but not to unaffiliated third parties.  Daniel does not challenge this 
interpretation on appeal.  Thus, the Addendum serves a further purpose, which itself 
demonstrates that the Irrevocable Proxy does not otherwise bind unaffiliated third parties.  
3. The Assignment Provision 
Daniel’s third and final argument on appeal is that the Court of Chancery erred by 
not giving “effect to all of the terms of the Irrevocable Proxy and improperly limiting the 
assignment clause of the Irrevocable Proxy so as not to bind assigns of the Stockholder.”153  
The Assignment Provision, found in paragraph 15 of the Irrevocable Proxy, states in its 
entirety:  
This Irrevocable Proxy and the rights of the Holders under this Irrevocable 
Proxy may not be assigned except that (a) any Holder may, with the consent 
of the remaining Holders, transfer such Holder’s rights to any person who is, 
or is affiliated with, a limited partner of the Partnership, and (b) the Holders 
may act pursuant to this Irrevocable Proxy, in voting the Proxy Shares or 
otherwise, through any duly authorized officer or employee of [Danco GP].  
This Irrevocable Proxy shall be binding upon and inure to the benefit of 
Stockholder and the Holders and their respective heirs, devises, legatees, 
personal representatives, agents and permitted assigns.154  
 
 
susceptible of (1) a meaning that gives it an effect already achieved by another provision, or that 
deprives another provision of all independent effect, and (2) another meaning that leaves both 
provisions with some independent operation, the latter should be preferred.”).  
153 Opening Br. at 3; Reply Br. at 14.  
154 App. to Opening Br. at A037 (Irrevocable Proxy at 4, ¶ 5).  
 
55 
 
The Assignment Provision begins with a blanket prohibition on assignment by the 
Holders in the first sentence (the “No-Assignment Clause”), followed by two exceptions 
to the blanket prohibition in clauses (a) and (b) (the “Holder Exceptions”).  The final 
sentence identifies the beneficiaries of the Irrevocable Proxy and those who will be bound 
by the Irrevocable Proxy (the “Bound Parties Clause”).   
Daniel argues that the Bound Parties Clause causes the Irrevocable Proxy to bind 
the Stockholder and his permitted assigns, which includes purchasers of the Majority 
Shares.  Rejecting this argument, the Court of Chancery first held that the phrase “permitted 
assigns” does not include purchasers of the Majority Shares.  It then held that, even if 
Daniel is correct that the phrase “permitted assigns” included subsequent purchasers, the 
“only reasonable” reading of the Bound Parties Clause is that it binds only the “permitted 
assigns” of the Holders, not those of the Stockholder.155  The Court of Chancery explained 
that this reading was the “only reasonable” one because it applies the rule of the last 
antecedent,156 accords with the “more natural reading” of the sentence, and “better fits the 
 
155 Chancery Opinion, 273 A.3d at 825–26. 
156 The rule of the last antecedent is a canon of construction which provides that: 
Referential and qualifying words and phrases, where no contrary intention appears, 
refer solely to the last antecedent. The last antecedent is the last word, phrase, or 
clause that can be made an antecedent without impairing the meaning of the 
sentence. Thus a proviso usually applies to the provision or clause immediately 
preceding it. A qualifying phrase separated from antecedents by a comma is 
evidence that the qualifier is supposed to apply to all the antecedents instead of only 
to the immediately preceding one. 
2A NORMAN J. SINGER & SHAMBIE SINGER, Sutherland Statutes and Statutory Construction § 
47:33 (7th ed. 2010), available at Westlaw (database updated Nov. 2022)  (internal quotation 
marks and footnotes omitted); see also Rubick v. Sec. Instrument Corp., 766 A.2d 15, 18 (Del. 
2000) (applying the rule that “[r]eferential and qualifying words and phrases, where no contrary 
 
56 
 
structure of the Assignment Provision, which starts with the No-Assignment Clause, 
continues with the Holder Exceptions, and finishes with the Bound Parties Clause and its 
specific reference to ‘permitted assigns.’”157  
a. The Court of Chancery Did Not Err in Finding That “Permitted Assigns” Does 
Not Include Transferees  
As a Delaware court, we interpret “contract terms according to their plain, ordinary 
meaning.”158  Daniel argues that the Court of Chancery committed legal error in finding 
that the terms “assigns” and “transferees” “are not equivalent and the Irrevocable Proxy 
needed to use the specific word ‘transferee,’ not ‘assign,’ to bind subsequent owners.”159  
He asserts that, although the Court of Chancery properly looked to the dictionary definition 
of “assignment,” its interpretation of the Bound Parties Clause was “inconsistent with the 
plain dictionary definition of an assignment as encompassing the transfer of property from 
one person to another,” a definition we recognized in Stream TV.160   
We disagree.  Although it is true, as we discussed in Stream TV, that an assignment 
may be a “type of transfer or relinquishment of property[;]”161 context matters in 
 
intention appears, refer solely to the last antecedent”) (quoting 2A NORMAN J. SINGER, Sutherland 
Statutes and Statutory Construction, § 47.33 (6th ed. 2000))). 
157 Chancery Opinion, 273 A.3d at 825–26. 
158 Alta Berkeley VI C.V., 41 A.3d at 385.  
159 Opening Br. at 34–35.  
160 Id. at 35 (referencing Stream TV, 279 A.3d at 340–41). 
161 Stream TV, 279 A.3d at 340.  As discussed herein, the question before this Court in Stream TV 
was whether the “transfer and assignment of all rights, title and interest in all of [Stream TV Inc.’s] 
assets” for the benefit of creditors was “a sale, lease, or other disposition” such that it would require 
a majority Class B stockholder vote under Stream TV Inc.’s charter.  Id.  In interpreting the 
charter’s plain language, we looked to dictionary definitions of “disposition” and “assignment,” 
and read the charter as a whole, particularly looking to the definition of “[t]ransfer” and the usage 
 
57 
 
determining which “type” of transfer.162  “[I]t is well established that a court interpreting 
any contractual provision . . . 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.”163  
In the context of the Irrevocable Proxy, Daniel’s plain reading of the term is not nuanced 
enough, particularly given the structure of the Assignment Provision, and how the term 
“transferee” is used elsewhere in the Irrevocable Proxy.  His reading overlooks the 
fundamental nature of a proxy as an instrument that divides the economic rights and the 
voting rights that attach to share ownership.   
Comparing dictionary definitions of “transfer,”164 to definitions of “assignee,”165 the 
Court of Chancery found that an “assignee generally does not receive the full bundle of 
 
of “disposition” therein.   From this analysis, we found that “[a]n assignment of all rights, title and 
interest in the assets of the [c]ompany to [another] is a ‘disposition’ because it is a type of transfer 
or relinquishment of property.”  Id. (emphasis added).  As the Court of Chancery found here, an 
assignment is a narrower term than transfer; it is a type of transfer.  Chancery Opinion, 273 A.3d 
at 826 (explaining “[a] transfer is the broader term, and it generally refers to a change involving 
all aspects of ownership” whereas “[a]n assignment is the narrower term, and it generally refers to 
a change involving specific rights”).  The Stream Omnibus Agreement provided for a broad type 
of transfer and assignment.  By its language it “transferr[ed] and assign[ed] all rights, title and 
interest.”  Stream TV, 279 A.3d at 340 (emphasis added).  Here, “assigns” is used in a narrower 
sense. 
162 See Chicago Bridge & Iron Co. N.V. v. Westinghouse Electric Co. LLC, 166 A.3d 912, 913–14 
(Del. 2017) (“In giving sensible life to a real-world contract, courts must read the specific 
provisions of the contract in light of the entire contract.”);  see also SCALIA & GARNER, supra note 
152, at 69 (observing that the ordinary-meaning canon, that “[w]ords are to be understood in their 
ordinary, everyday meanings—unless the context indicates that they bear a technical sense,” 
“governs constitutions, statutes, rules, and private instruments”).  
163 See Alta Berkeley VI C.V., 41 A.3d at 385–86 (quoting Elliot Assoc., L.P. v. Avatex Corp., 715 
A.2d 843, 854 (Del. 1998)).  
164 Chancery Opinion, 273 A.3d at 826 (citing Transfer, BLACK’S LAW DICTIONARY (11th ed. 2019) 
(“A conveyance of title or property from one person to another.”).  
165 Id. (citing Assignee, BLACK’S LAW DICTIONARY (11th ed. 2019) (“Someone to whom property 
rights or powers are transferred by another.”) and RESTATEMENT (SECOND) OF CONTRACTS § 316 
 
58 
 
rights associated with the underlying property interest, but rather only a subset of those 
rights.”166  Additional dictionary definitions suggest that an “assignee” is the word 
commonly used for someone who receives a “right” underlying the property interest.167 
Accordingly, the Court of Chancery found that the terms are used differently in 
different contexts.168  The court observed that this difference “is perhaps best reflected in 
our alternative entity statutes, where an effort to transfer an interest in a limited partnership 
or limited liability company results in the recipient becoming an assignee who possesses 
economic rights, but not governance rights.”169  The same is true in contract law, where, as 
the court observed, “the original counterparty remains bound under the contract 
notwithstanding the assignment, unless the new party is substituted through a novation.”170 
Although we agree with the Court of Chancery that “transferee” and “assigns” are 
used differently in different contents, we recognize that the terms can have overlapping 
meanings.171  Resolution here hinges on whether the terms were used differently in this 
 
(Am. Law. Inst. 1981), available at Westlaw (database updated Oct. 2022) (defining 
“[a]ssignment” as “the transfer of a right by the owner (the oblige or assignor) to another person 
(the assignee)”)). 
166 Id. 
167 Assignee, MERRIAM-WEBSTER, https://www.merriam-webster.com/dictionary/assignee (last 
visited Dec. 21, 2022) (“[A] person to whom a right or property is transferred.”). 
168 See SCALIA & GARNER, supra note 152, at 70 (observing that most common English words 
have more than one ordinary meaning and stating that “[o]ne should assume the contextually 
appropriate ordinary meaning unless there is reason to think otherwise”). 
169 Chancery Opinion, 273 A.3d at 826–27 (citing 6 Del. C. § 17-702(a)).   
170 Id. at 827 (citing Schwartz v. Centennial Ins. Co., 1980 WL 77940, at *2 (Del. Ch. Jan. 16, 
1980) and P.C. Connection, Inc. v. Synygy Ltd., 2021 WL 57016, at *14 (Del. Ch. Jan. 7, 2021)).   
171 See Transferee, MERRIAM-WEBSTER, https://www.merriam-webster.com/dictionary/transferee 
(last visited Dec. 21, 2022) (“[A] person to whom something is transferred or conveyed.”). 
 
59 
 
context.172  The structure of the Assignment Provision along with the divergent uses of the 
terms elsewhere in the Irrevocable Proxy support the Court of Chancery’s conclusion that 
they were used differently here, and that the term “permitted assigns” does not include 
transferees.   
The word “assigns” in the Assignment Provision takes on a different meaning than 
the word “transferee” does in the Addendum.  Their respective uses are consistent with the 
Court of Chancery’s determination that, in the Irrevocable Proxy, an assignee is one who 
receives only a subset of property rights, whereas a transferee is one who receives all 
property rights associated with the underlying property interest.  In the Assignment 
Provision, “permitted assigns” are those who have been assigned the “Irrevocable Proxy” 
or the “rights of the Holders.”  The Assignment Provision is structured as a prohibition on 
the assignment of “the rights of the Holders,” followed by two exceptions.  The first 
exception allows a Holder who has the consent of the other Holders to “transfer such 
Holder’s rights” to “any person affiliated with a limited partner of the Partnership.”  The 
second exception allows a Holder “in voting the Proxy Shares or otherwise” to do so 
through a duly authorized officer or employee of Danco GP.   
On the other hand, “transferee” is used in the Addendum to refer to someone who 
has been transferred legal ownership of the shares, rather than only the underlying voting 
 
172 Lorillard Tobacco v. Am. Legacy Found., 903 A.2d 728, 740 (Del. 2006) (“There may be more 
than one dictionary definition, and parties may disagree on the meaning of the definition as applied 
to their case, but if merely applying a definition in the dictionary suffices to create ambiguity, no 
term would be unambiguous.  A court must accept and apply the plain meaning of an unambiguous 
term in the context of the contract language and circumstances, insofar as the parties themselves 
would have agreed ex ante.”) (internal quotation marks and footnotes omitted)).  
 
60 
 
rights.  The Addendum documents Old MedApproach’s agreement “not to transfer any 
such shares to any other MedApproach Person unless such transferee agrees in writing 
satisfactory to the [ ] Holders (other than W. Bradley Daniel) to be bound).” 173  The fact 
that the parties could have used “transferee” in the Assignment Provision, as they did 
elsewhere in the Irrevocable Proxy, but chose not to, supports the Court of Chancery’s 
reading as a reasonable one.  
The Court of Chancery also relied on its decision in Genger Trial with respect to 
transferee language, discussed above.  Daniel argues that no Delaware court has held that 
the drafters of an irrevocable proxy need to use the magic word “transferee” for the 
irrevocable proxy to run with the shares and be binding on a subsequent owner.174  But the 
Court of Chancery did not require the use of the word “transferee” for an irrevocable proxy 
to be binding.  Rather, it found that the absence of the words “transferee,” “transfer,” or 
“sale,” in the context of the plain language of the Irrevocable Proxy, indicated that the 
instrument was not intended to run with a transfer of the underlying shares.  Here, the 
language of the Assignment Provision does not clearly provide that the Irrevocable Proxy 
will run with the shares.  In sum, considering that the fundamental nature of an irrevocable 
proxy involves a division of property rights, the structure of the Assignment Provision, and 
the divergent uses of the terms in the Irrevocable Proxy, the Court of Chancery’s finding 
that permitted assigns does not include transferees was not legal error.  
 
173 App. to Opening Br. at A039 (Irrevocable Proxy at 5).  
174 Opening Br. at 35–36. 
 
61 
 
b. Nor does the Bound Parties Clause Provide that the Irrevocable Proxy Runs with 
the Majority Shares  
Even if Daniel is right that the term “assigns” includes “transferees” in this case, his 
reliance on the Assignment Provision fails because the term “permitted assigns” does not 
clearly apply to those of the Stockholder.  The Court of Chancery found that the plain 
language of the sentence was ambiguous as to whether it bound permitted assigns of the 
Stockholder in addition to those of the Holders.  It then looked to the structure of the 
provision and applied the rule of the last antecedent and grammatical canons to conclude 
that the Bound Parties Clause only binds permitted assigns of the Holders, not those of the 
Stockholder.  
The rule of the last antecedent is a settled principle of interpretation.175  It provides 
that “referential and qualifying words and phrases, where no contrary intention appears, 
refer solely to the last antecedent.”176  Read according to the rule, the adjective “their” in 
the Bound Parties Clause modifies the only the nearest antecedent: “the Holders.”  
Therefore, only the permitted assigns of the Holders are bound, not the permitted assigns 
of the Stockholder.  
On appeal, Daniel argues that reliance on the rule of the last antecedent was legal 
error because application of the rule here, “violate[s] [the] cardinal principle” that courts 
 
175 See, e.g., Rag Am. Coal Co. v. AEI Res., Inc., 1999 WL 1261376, at *4 (Del. Ch. Dec. 7, 1999) 
(observing that ordinarily, qualifying words or phrases, where no contrary intention appears, 
usually relate to the last antecedent) (internal quotation marks omitted). 
176 Rubick, 766 A.2d at 18 (quoting SINGER, supra note 156).   
 
62 
 
are “to give effect to all terms of the instrument.”177  According to Daniel, the Stockholder 
is already bound by the Irrevocable Proxy so if the adjective “their” does not reach back 
through “Holders” to modify “Stockholder” then the word “Stockholder” serves no purpose 
in the sentence.  It becomes surplusage.  
The Court of Chancery acknowledged that Daniel’s reading is reasonable, but it 
concluded that the Bound Parties Clause is ambiguous.  It noted that the placement of an 
adjective often creates ambiguity.178  Here, the ambiguity is compounded by the omission 
of an Oxford comma.179  The Court of Chancery reconstructed the Bound Parties Clause, 
this time eliminating an “and” and placing an Oxford comma: 
If “their” applied to both “Stockholder” and “the Holders,” then the natural 
way to write the sentence would be to say that “[t]his Irrevocable Proxy shall 
be binding upon and inure to the benefit of Stockholder, the Holders, and 
their respective heirs, devises, legatees, personal representatives, agents and 
permitted assigns.”180 
 
 
If the drafters of the Irrevocable Proxy had written the Bound Parties Clause as laid 
out above, Daniel’s reading would be the most natural one.  But they did not do so.  Daniel 
argues that “[a] court applying Delaware law will not allow the imprecise placement of 
 
177 Opening Br. at 33–34 (citing Elliot Assocs., 715 A.2d at 854).  
178 Chancery Opinion, 273 A.3d at 825.  
179 An Oxford comma (aka a serial comma or Harvard comma) is a comma that separates the last 
from the next-to-last item in a list of more than two.  It normally follows a conjunction.  See BRYAN 
A. GARNER, Garner’s Modern English Usage 897, 981 (5th ed. 2022)).  
180 Chancery Opinion, 273 A.3d at 825–26.  Accord GARNER, supra note 179, at 982, 985.  
Garner explains that proponents of the Oxford comma “point out that including it never creates 
an ambiguity, whereas omitting it fairly often does.” GARNER, supra note 179, at 982.  In line 
with the weight of authority, Garner himself favors a bright line rule of including an Oxford 
comma to ensure consistency and clarity.  GARNER, supra note 179, at 985.   
 
63 
 
adverbs and commas to alter the otherwise plain meaning of a contractual provision or to 
frustrate the overall plan or scheme memorialized in the parties’ contract.”181  But the Court 
of Chancery’s reasoning for applying the rule of the last antecedent and other grammatical 
canons was precisely because the provision was ambiguous.182   
 
Mrs. Hawkins interpretation also fits better with the grammatical rule of pronoun-
antecedent agreement.  The plural possessive “their” agrees with the plural antecedent “the 
Holders,” not the singular antecedent “Stockholder.”183  Moreover, it brings the Bound 
Parties Clause into compliance with the grammatical rules governing determiners.184  
 
181 Reply Br. at 15 (citing Symbiont.iO, Inc. v. Ipreo Hldgs., LLC, 2021 WL 3575709, at *35 (Del 
Ch. Aug. 13, 2021) (internal quotation marks omitted)).  Accord E.I. du Pont de Nemours & Co. 
v. Green, 411 A.2d 953, 956 (Del. 1980) (“[T]he [last antecedent] rule has its limitations, as stated 
in 2A Sutherland, Statutes and Statutory Constructions, § 47.33 (4th [e]d. 1973), ‘When the sense 
of the entire act requires that a qualifying word or phrase apply to several preceding or succeeding 
sections, the word or phrase will not be restricted to its immediate antecedent.’”) (emphasis 
added)); MicroStrategy Inc. v. Acacia Research Corp., 2010 WL 5550455, at *7 (Del. Ch. Dec. 
30, 2010) (“In reaching that conclusion, I am mindful that grammar and punctuation are of 
secondary importance to a court in interpreting a contract where such grammar and punctuation 
reasonably would frustrate the parties’ clear intent as evinced from the language used in the 
contract.  Indeed, a court should ‘not allow the imprecise placement of adverbs and commas to 
alter the otherwise plain meaning of a contractual provision or to frustrate the overall plan or 
scheme memorialized in the parties’ contract.’”) (citing Interim Healthcare, Inc. v. Spherion 
Corp., 884 A.2d 513, 555–56 (Del. Super. 2005), aff’d, 886 A.2d 1278 (Del. 2005))); Facebook, 
Inc. v. Duguid, 141 S. Ct. 1163, 1170 n.5 (2021) (“Linguistic canons are tools of statutory 
interpretation whose usefulness depends on the particular statutory text and context at issue.”); see 
also Barnhart v. Thomas, 540 U.S. 20, 26 (2003) (observing that the rule is “not absolute” and can 
be “overcome by other indicia of meaning”). 
182 Chancery Opinion, 273 A.3d at 825, 828; see also Stream TV, 279 A.3d at 341, 341 n.99 
(collecting cases standing for the proposition that if a contractual provision is unambiguous, the 
court need not interpret it and the language of the provision itself controls).  
183 See GARNER, supra note 179, at 239 (“[A] relative pronoun is supposed to agree with its 
antecedent in both number and person.”).  But cf. GARNER, supra note 179, at 239 (recognizing 
that the matching of “they” with a singular noun is now a common way to avoid sexist or gendered 
language).  
184 A determiner is “[a] type of adjective that limits how a noun element applies.”  GARNER, supra 
note 179, at 1204.  Examples of determiners “are articles (a, an, and the), demonstrative adjectives 
 
64 
 
Those rules state that “[w]ith postpositive modifiers, the insertion of a determiner before 
the second item tends to cut off the modifying phrase so that its backward reach is 
limited.”185  Here, the second item is “Holders” and the determiner is “the,” which cuts off 
the modifying phrase “their” from reaching back to modify “Stockholder.” 
 
Finally, Daniel’s reading is inconsistent with the structure of the Assignment 
Provision.  As discussed above, the Assignment Provision is a prohibition on the rights of 
the Holders.  It provides for two exceptions.  Both only apply to the Holders because only 
the Holders are prohibited from assigning their rights.  In a provision addressing a 
prohibition on the Holders’ ability to assign their rights, the most natural reading is that 
“permitted assigns” refers to those assigns permitted by the Holders under the exceptions 
provided for in the previous sentence.  
IV. 
CONCLUSION 
 
For the foregoing reasons, we hold that the Irrevocable Proxy does not run with the 
Majority Shares.  Delaware law requires that the irrevocable proxy instrument clearly and 
unambiguously state that such proxy will continue with the shares upon their sale or 
transfer.  The Irrevocable Proxy does not do so.  Accordingly, we AFFIRM the judgment 
of the Court of Chancery.  
 
(this, that, these, and those), and indefinite adjectives (e.g., all, any, each, every, some, few).”  
GARNER, supra note 179, at 1204. 
185 SCALIA & GARNER, supra note 152, at 149 (acknowledging that the effect of a determiner in 
these instances is “not entirely clear” and that a competent drafter will position it earlier in the 
phrase).