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 thirdparty 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 litigationintrusive 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 votebuying 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 selfinterest 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 NonTermination 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” supportsthe 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 NonTermination 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 pronounantecedent 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).