IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
CELESTIALRX INVESTMENTS, LLC and KRITTIKA LIFE SCIENCES, LLC,
Plaintiffs, ) ) ) ) )

v. ) ) ) C.A. No. 11733

- VCG
JOSEPH J. KRIVULKA; THE ESTATE OF JOSEPH J. KRIVULKA; MICHAEL J. LERNER, IN HIS CAPACIT Y AS PERSONAL REPRESENTATIVE FOR THE ESTATE OF JOSEPH J. KRIVULKA; ANGELA L. KRIVULKA, IN HER CAPACITY AS PERSONAL REPRESENTATIVE FOR THE ESTATE OF JOSEPH J. KRIVULKA; LEONARD MAZUR; DONALD OLSEN; JJK PARTNERS, LLC; MIST ACQUISITION, LLC; MIST PHARMACEUTIC ALS, LLC; MIST PARTNERS, LLC; JAK INVESTMENT PARTNERS, LLC; CRANFORD PHARMACEUTICALS, LLC; CRANFORD THERAPEUTICS, LLC; HOLMDEL PHARMACEUTICALS, LP; HOLMDEL THERAPEUTICS, LLC; LMAZUR ASSOCIATES, JV; AKRIMAX PHARMACEUTICALS, LLC; JOHN DOES 1

- 10; and ABC ENTI TIES 1

- 10,

Defendants , and
AKRIMAX PHARMACEUTICALS, LLC , Nominal Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )MEMORANDUM OPINION

Date Submitted : December 5 , 2018 Date Decided : March 27, 2019

M ichael W. McDermott and David B. Anthony, of BERGER HARRIS LLP, Wilmington , Delaware ; OF COUNSEL : Benjamin C. Curcio , Paul F. Campano , Jessica A. Tracy , Michael D. Zahler , and Jason S. Haller , of CURCIO MIRZAIAN SIROT LLC , Roseland, New Jersey , Attorneys f or Plaintiffs CelestialR X Investments, LLC and Krittika Life Sciences, LLC

. Garrett B. Moritz and Benjamin Z. Grossberg , of ROSS ARONSTAM & MORITZ LLP, Wilmington, Delaware ; OF COUNSEL: Andrew E. Anselmi and Zachary D. Wellbrock, of MCCUSKER, ANSELMI, ROS EN & CARVELLI, P.C

. , Florham Park, New Jersey, Attorneys for Defendants Joseph J. Krivulka , JJK Partners, LLC, JAK Investment Partners, LLC, Mist Acquisition, LLC, Mist Pharmaceuticals, LLC, Mist Partners, LLC, Cranford Therapeutics, LLC, and Holmdel Thera peutics, LLC

. Samuel T. Hirzel, II and Aaron M. Nelson, of HEYMAN ENERIO GATTUSO & HIRZEL LLP, Wilmington, Delaware, Attorney s for Defendants Leonard Mazur and LMazur Associates, JV

. Andrew D. Cordo and F. Troupe Mickler IV, of ASHBY & GEDDES, Wilmingt on, Delaware, Attorneys for Defendant Donald Olsen

. Jody C. Barillare, of MORGAN, LEWIS & BOCKIUS LLP, Wilmington, Delaware; OF COUNSEL: Brian A. Herman, of MORGAN, LEWIS & BOCKIUS LLP, New York, New York, Attorneys for Defendant Cranford Pharmaceuticals, LLC. Ryan P. Newell and Lauren P. DeLuca, of CONNOLLY GALLAGHER LLP, Wilmington, Delaware, Attorneys for Defendant Holmdel Pharmaceuticals, LP

. Phillip A. Rovner and Jonathan A. Choa, of POTTER ANDERSON & CORROON LLP, Wilmington, Delaware, Attorneys for Defendant Akrimax Pharmaceuticals LLC

.

GLASSCOCK, Vice ChancellorThis Memorandum Opinion represents incremental progress towards resolution of a series of long

- ago

- filed, potentially case

- dispositive motions. This

action involves the manner in which the primary Defendant, Joseph Krivulka, is alleged to have used his control over nominal party Akrimax Pharmaceuticals, LLC to benefit other entities (many also parties defendant ) in which he was interested, at the expense of Akrimax and its members. In 2016, the Defendants moved to dismiss, and some moved for partial summary judgment as well. I addressed the Motions for Partial Summary Judgment first, in the hope that resolution of issues involving the scope of a release of claims, as well as Krivulka’s duties under the LLC agreement, would narrow the issues and promote settlement. That decision (“Celestial I”) was issued on January 31, 2017. Since that time, the pace of litigation has been

testudinal. The parties pursued mediation and settlement, uns uccessfully. Unfortunately, Krivulka has died, which led to motion practice regarding what entity or individuals should represent his estate going forward. Eventually, counsel resubmitted the Motions to Dismiss for consideration, bolstered by the parties ’ years

- old briefing. As the caption demonstrates, the case involves a blizzard of Defendant entities, e a c h

associated with Krivulka. 1 All have moved to dismiss for failure to state a claim,

1 For cinephiles an d those of a certain age, the description of these entities below may invoke the “Hotel Central, Milwaukee” scene from Key Largo ; nearly all are residents together at “the same address” as Akrimax, in Cranford, New Jersey.2 failure of process, failure of service of process, lack of subj ect matter jurisdiction, or lack of personal jurisdiction. This Memorandum Opinion resolves the latter
issues. However, I had asked counsel to address what claims remained in the case in light of my decision in Celestial I

. 2 That they have yet , effectiv ely, to do. Accordingly , rather than wade through the morass of 12(b)(6) motions for various entities, some of which may be moot in light of my finding as to the applicable contractual fiduciary duties explained in Celestial I, I find it appropriate to as k the parties, again, to review that decision in light of the claims and inform me which Motions to Dismiss remain. At that point, I will address the remaining Motions
under Rule 12(b)(6). 3
My rationale for those decisions I can economically make follo ws a statement of the facts, below.

I. BACKGROUND
The Defendants moved to dismiss all c laims brought against them, in part
pursuant to Court o f Chancery Rule 12(b)(6) , failure to state a claim

. In a Rule
12(b)(6) motion to dismiss, the Court does not conside r documents extrinsic to the complaint, except for documents that are integral to a plaintiff’s claim and are

2 See Jan. 31, 2018 Status Teleconference Tr. , at 18:24

– 19:22. 3 As Richard Dr eyfuss might say to Bill Murray, “ B aby steps, Bob . B aby steps

. ” S ee What About Bob? (Touchstone Pictures 1991).3 incorporated into the complaint. 4 T he Court assumes as true all well

- pleaded alleg ations of fact in the complaint, and a lso draws all reasonable inferences from

those well

- pleaded allegations in favor of the plaintiff

. 5 In this case, certain

Defendants , concurrent with their Motions to Dismiss , brought and argued Motions for Partial Summary Judgment. I have already issued a Memorandum Opinion 6 th at
addresses the Motio ns for Pa rtial Summary Judgment, and I made findings of law regarding certain contract ual language that are incorporated below.

4 Wal

- Mart Stores, Inc. v. AIG Life Ins. Co. , 860 A.2d 312, 320 (Del. 2004)

. Here, the partie s conducted preliminary discovery in preparation for a preliminary injunction hearing. The Plaintiffs amended their Complaint following that hearing, and explicitly noted that their Amended Complaint “adds facts revealed during preliminary discovery condu cted in advance of the February 8, 2016 preliminary injunction hearing .” Am

. Compl. ¶ 1 . H owever, not all the preliminary discovery conducted is considered in evaluating the Defendants’ Rule 12(b)(6) Motions to Dismiss. T here is no change to the stan dard that governs the record on which to consider those Rule 12(b)(6) motions; documents integral to a plaintiff’s claim and incorporated into the complaint can be considered, even if extrinsic to the complaint. See In re Morton’s Rest. Grp., Inc. S’holde rs Litig. , 74 A.3d 656, 658 n.3 (Del. Ch. July 23, 2013) (explaining why depositions taken as part of discovery were considered fully incorporated into the complaint). Here , that means that certain agreements, which were produced in preliminary discovery and/or submitted by affidavit accompanying the Defendants’ Motions to Dismiss and Motions for Partial Summary Judgment as well as affidavits accompanying the Plaintiffs’ responsive briefing to those Motions , have been considered. These agreements, or the relatio nships they govern, are referenced in the Amended Complaint. I nformation gleaned from these agreements has served to describe certain relationships with greater specificity, but has otherwise had a nominal bearing on the outcome. 5 Savor, Inc. v. FMR Corp

. , 812 A.2d 894, 896

– 97 (Del. 2002) (citations omitted). 6 See CelestialRX Invs., LLC v. Krivulka , 2017 WL 416990 (Del. Ch. Jan. 31, 2017).4 A. The Parties As this action involves a multitude of parties , i t is beneficial ( consistent with my practice in Celestial I ) 7 to firs t delineate the various parties, especially because many are interrelated.

1. The Plaintiffs
Plaintiff CelestialRX Investments, LLC (“CelestialRX” ) is a Delaware limited liability c ompany with a principal place of business in Old Green wich , Connecticut. 8
CelestialRX is a member of Defendant Akrimax Pharmaceuticals, LLC
(“Akrimax”). 9 CelestialRX’s sole member and manager is Sandeep “Steve” Laumas
(“ Laumas ”). 10 F rom January 11, 2008 to July 1, 2013 , Laumas served on Akrimax’s

Board of D irectors. 11
Plaintiff Krittika Life Sciences, LLC (“Krittika” ) is also a Delaware l imi ted liability c ompany and shares its principal place of business with CelestialRX in Old
Greenwich, Connecticut. 12 As with CelestialRX, Krittika’s sole member and

7 Diligent readers may notice that I, at times, borrow the phrasing from my previous Memorandum Opinion when describ ing the parties. 8 Am. Compl. ¶ 4. 9 Id

. 10 Id. 11 Id. ¶¶ 32, 33, 77. 12 Id. ¶ 5.5 manager is Laumas

. 13 Krittika entered into a consulting agreement with Defendant

Akrimax dated February 1, 2008

. 14

2. The Defendants

a. Nominal Defendant /Defendant
Defendant Akrimax is a Delaware limited liability company with a principal place of business in Cranford, New Jersey. 15 Akrimax acquires, develops, sells, and markets “pharmaceutical products in the areas of cardiovascular medicine, endocrinology[,] and pain management.” 16 Akrimax was formed on October 24,
2007, and Defendants Joseph Kri vulka and Leonard Mazur were its initial

members

. 17 Plaintiff Cele stialRX subsequently joined as the third member. 18
Akrimax is a nominal defendant for the purposes of CelestialRX’s derivative claims,

but a defendant in Krittika’s claim for breach of contract. 19

b. Individual Defenda nts Joseph J. Krivulka (“Krivulka”) was 20 a resident of New Jersey and an investor in numerous pharmaceutical businesses, which are defendants in this

13 Id. 14 Id. ¶ 45. 15 Id. ¶ 6. 16 Id. ¶ 28. 17 Id. 18 Id. 19 Id. ¶ 6. 20 Krivulka is now deceased. See Docket Item [hereinafter, “D.I.”] 278, Suggestion of Death Upon the R ecord of Joseph J. Krivulka. Krivulka has been substituted in this action by the Estate of Joseph J. Krivulka, and Michael J. Lerner and Angela L. Krivulka in their capacity as the personal6 action. 21 Krivulka wa s an original member of Defendant Akrimax. Prior to July 1,
2013, Krivulka served as one of three directors on Akrimax’s Board of Directors,

which acting collectively managed Akrimax. 22 Following a July 1, 2013 amendment to Akrimax’s operating a greement, Krivulka, individually, became the sole manager

of Akrimax. 23 Pursuant to the same am endment , Krivulka became the beneficial

owner of all of Akrimax’s Common Voting Units and fifty

- one percent of Akrimax’s

total units (or “Krivulka Units”). 24 Apart from Akrimax, Krivulka also held , directly or beneficially, majority ownership interest s in Defendants Mist Acquisition, LLC,
Mist Pharmaceuticals, LLC, Mist Partners, LLC, JJK Partners, LLC, JAK Investment Partners, LLC, Holmdel Therapeutics, LLC, and Cranford Therapeutics,

LLC

. 25 Krivulka passed away during the pendency of this litigation, and his Estate and two individuals in their capacity as personal representatives of his Estate were
named Defendants in his stead , 26 references in this Memorandum Opinion to
“Krivulka” refer to Mr. Krivulka, or to his successors, as context dictates.

representatives of the Estate of Joseph J. Krivulka. See D.I. 304 , Order Granting Plaintiffs’ Motion to Substitute Pursua nt to Court of Chancery Rule 25

. 21 Am. Compl. ¶ 7. 22 Id. ¶¶ 33, 77

. 23 Id. ¶ 77. 24 Id. 25 Id. ¶¶ 7, 11

– 18. Through his ownership interest in Cranford Therapeutics, LLC, Krivulka is a minority e quity holder in Cranford Pharmaceuticals, LLC. See Am. Compl. ¶ 96; CelestialRX Invs., LLC v. Krivulka , 2017 WL 416990, at *2 n.16 (Del. Ch. Jan. 31, 2017). Similarly, through his equity interest in Holmdel Therapeutics, LLC, Krivulka is a minority equity holder in Holmdel Pharmaceuticals, LP. See Am. Compl. ¶ 98; CelestialR X , 2017 WL 416990, at *2 n.16. 26 D.I. 304.7 Defendant Leonard Mazur (“Mazur”) is a resident of New Jersey and an initial

member of Akrimax. 27 Between January 11, 2008 and July 1, 2013, Mazur served on Akrimax’s Board of Directors, along with Krivulka and Laumas. 28 Mazur, like
Krivulka, has various investments outside his interest in Akrimax. 29 Mazur’s

inte rests , direct and beneficial, include minority ownership interests in Defendants Mist Acquisition, LLC, Mist Partners, LLC, Holmdel Therapeutics, LLC and Cranford Therapeutics, LLC; 30 all entiti es in which Kr ivulka also has a majority ownership interest. Mazur also holds ownership interests in Prenzamax, LLC, Citius
Pharmaceuticals, LLC, and Va lencia Investment Partners, LLC. 31 Finally, Mazur

manages Defendant LMazur Associates JV (“LMazur Associates”)

. 32

Defe ndant Donald Olsen (“Olsen”) is a resident of California. 33 Olsen is the

former President and CEO of Akrimax. 34 Olsen holds a minority ownership interest

in Defendants Cranford Therapeutics , LLC and Holmdel Therapeutics , LLC

. 35

27 Am. Compl. ¶¶ 8, 28. 28 Id. ¶¶ 33, 77. 29 Id. ¶ 8. 30 Id. ¶ ¶ 8, 1 4

– 18. As with Krivu lka, Mazur has an ownership interest in Cranford Pharma ceuticals and Holmdel Pharmaceuticals through his interests in Cranford Therapeutics and Holmdel Therapeutics , respectively. 31 Id. ¶ 8. These entities have contractual relationships with Akrimax but are not defendants in this action, and the Plaintiffs mak e no allegations linking these entities to the claims in the Amended Complaint. See id. ¶ 59. 32 Id. ¶ 21. 33 Id. ¶ 9. 34 Id. 35 Id. As with Krivulka and Mazur, Olsen also has an ownership interest in Cranford Pharmaceuticals and Holmdel Pharmaceuticals thro ugh his interests in Cranford Therapeutics and Holmdel Therapeutics , respectively

. Id. ¶¶ 17

– 20.8 c. The Entity Defendants
Defendant JJK Part ners, LLC (“JJK Partners”) is a Delaware limited liability company, with the same principal place of business as Akrimax in Cranford, New Jersey. 36 JJK Partners was formed on March 3, 2008, Krivulka is its sole member. 37

JJK Partners entered into a cons ult ing agreement with Akrimax dated February 1,

2008. 38 Following a July 1, 2013 amendment to Akrimax’s operating agreement,

JJK Partners holds all the voting rights in Akrimax and all the “Krivulka Units ” in
Akrimax; 39 prior to the amendment , Krivulka held hi s interests in Akrimax in his

own name. 40 Apart from Akrimax, JJK Partners holds majority ownership interest s in Defendants Cranford Therapeutics, LLC and Holmdel Therapeutics, LLC. 41
Defendant JAK Investment Partners, LLC (“JAK Investment Partners”) is a

D elaware limited liability company, with the same principal place of business as Akrimax in Cranford, New Jersey. 42 JAK Investment Partners was formed in

36 Id. ¶ 11. 37 Id. 38 Id. ¶ 45. The inconsistency between formation date, March 1, 2008, and the date of the consulting agreement, Febr uary 1, 2008, is reflective of the Amended Complaint and is not an
e rror of the Court

. 39 Id. ¶¶ 8, 77

. 40 See Transmittal Aff. of Michael D. Zahler In Support of Pls.’ Opp ’ n to the Krivulka and Mazur Defs.’ Mots. for Partial Summ. J. and to All Defs.’ Mots

. to Dismiss [hereinafter, “Zahler Aff.”] Ex. 2 ( A mended and Restated Limited Liability Company Agreement of Akrimax Pharmaceuticals, LLC ) , at Sub e x. A ; Ex. 3 ( Second Amended and Restated Limited Liability Company Agreeme n t of Akrimax Pharmaceuticals, LLC ) , at Sub e x. A

. 41 Am. Compl. ¶ 46 n.1.; Zahler Aff. Ex. 19 , at Sub e x. B; Tra nsmittal Aff. of John A. Eakins, Esq., in Support of Krivulka Defs .’ Mot s

. for Summ. J

. and to Dismiss [hereinafter, “Eakins Aff.”] Ex. 24 , at Sub e x. B. 42 Am. Compl. ¶ 12.9 September 2008, and Krivulka is its sole member. 43 JAK Investment Partners holds a majority ownership i nterest in Defendant Mist Partners, LLC. 44
Defendant Mist Partners, LLC (“Mist Partners”) is a Delaware limited liability company, with the same principal place of business as Akrimax in Cranford, New Jersey. 45 Mist Partners was formed in October 2009. 46 As previously mentioned , JAK Investment Partners holds a majority ownership interest in Mist Par t ners; prior to July 30, 2015, JJK Partners held the same majority ownership interest in Mist

Partners. 47 Defendant LMazur Associates holds a minority ownership i nterest in

Mist Partners

. 48 Mist Partners is the sole owner and membe r of Defendant Mist Acquisition , LLC. 49
Defendant Mist Acquisition, LLC (“Mist Acquisition”) is a Delaware limited liability company, with the same principal place of business as Akrimax i n Cranford,
New Jersey. 50 Mist Acquisition was formed in October 2009. 51 As stated above, Mist Acquisition is wholly owned by Mist Partners.

43 Id. 44 Id. ¶ 14. 45 Id. 46 Id. 47 Id. ¶¶ 14, 46 n.1. 48 Id. ¶ 14. 49 Id. 50 Id

. ¶ 15. 51 Id.10 Defendant Mist Pharmaceuticals, LLC (“Mist Pharmaceuticals”) is a Delaware limited liability company, with the same principal place of business as Akrimax in Cranford, New Jersey. 52 Mist Pharmaceuticals was formed in October

2009. 53 Krivulka has an over ninety percent interest in Mist Pharmaceu ticals and

was Chairman of its B oard of Directors

. 54

Defendant Cranford Thera peutics, LLC (“Cranford Therapeutics”) is a Delaware limited liability company, with the same principal place of business as Akrimax in Cranford, New Jersey. 55 Cranford Therapeutics was formed in October

2013. 56 JJK Partners holds a majority ownership inte rest in Cranford Therapeutics,

and Krivulka serves as Cranford Therapeutics’ Chairman of the Board of Directors. 57

Defendants L Mazur Associates and Olsen also hold minority ownership interests in Cranford Therapeutics. 58 Cranford Therapeutics is a member o f Defendant Cranford
Pharmaceuticals, LLC , in which it owns a minority interest of approximately twelve
percent. 59
Defendant Cranford Pharmaceuticals, LLC (“Cranford Pharmaceuticals”) is a Delaware limited liability company, with the same principal place of business as

52 Id. ¶ 16. 53 Id. 54 Id. 55 Id. ¶ 17. 56 Id. 57 Id. ¶¶ 17, 46 n.1. 58 Id. ¶¶ 17, 46 n.2. 59 Id. ¶ 17; see also Eakins Aff. Ex. 58 , at Sub e x. A.11 Akrimax in Cranford, New Jersey. 60 Cranford Pharmaceuticals was formed in
October 2013, and Krivulka wa s its CEO. 61 As stated above, Cranford Therapeutics holds a minority interest in Cranford Pharmaceuticals, majority o wnership is held by thi rd

- party investor JCP II CI AIV, L.P. (“JCP”)

. 62
Defendant Holmdel Therapeutics, LLC (“Holmdel Therapeutics”) is a Delaware limited liability company, with the same principal place of business as Akrimax in Cranford, New Jersey. 63 Holmdel Therapeutics was f ormed in
December 2012, and Krivulka is the Chairman of its Board of Directors. 64

Defendant JJK Partners holds a majority interest , approximately sixty

- two percent , in Holmdel Therapeutics ; Defendant L Mazur Associates holds a twenty

- five percent
interest, and Defendant Olsen holds a one

- half percent interest. 65 Holmdel Therapeutics is a limited partner in Defendant Holmdel Pharmaceutic al s, LP, and holds an approximately thirteen percent interest in that entity. 66
Defendant Holmdel Pharmaceuticals, LP (“Holmd el Pharmaceuticals”) is a Delaware domestic limited partnership, with the same principal place of business as

60 Id. ¶ 18. 61 Id. 62 See CelestialRX Invs., LLC v. Krivulka , 2017 WL 416990, at *4 (Del. Ch. Jan. 31, 2017); see also Eakins Aff. Ex. 58. 63 Am. Compl. ¶ 19. 64 Id. 65 Id. ¶ ¶ 19, 46 n.1, 46 n.2. 66 Id. ¶ 19.12 Akrimax in Cranford, New Jersey. 67 Holmdel Pharmaceuticals was formed in

December 2012. 68 As stated above, Holmdel Therapeutics is a limited partn er and minority owner of Holmdel Pharmaceuticals. The majority owner and holder of the remaining interest is third

- party SWK. 69

Defendant LMazur Associates JV (“ LMazur Associates ”) is an unincorporated joint venture with a principal place of business in Mo untain Lakes, New Jersey. 70 LMazur Associates is managed by Defendant Mazur. 71 LMazur

Associates entered into a consulting agreement with Akrimax on February 1, 2008. 72
As stated above, LMazur Associates holds minority ownership interests in

Defendants Mis t Partners, Cranford Therapeutics, and Holmdel Therapeutics.

d. Defendant Groups
The Defendants in this a ction have helpfully formed six groups

. The first group is the “Krivulka Defendants,” which consists of the following Defendants : Krivulka, JJK Partners, JAK Investment Partners, Mist Partners, Mist Acquisition, Mist Pharmaceuticals, Cranford Therapeutics, and Holmdel Therapeutics. 73 The

67 Id. ¶ 20. 68 See CelestialRX Invs., LLC v. Krivulka , 2017 WL 416990, at *4 (Del. Ch. Jan. 31, 2017); see also Eakins Aff. Ex. 25 at Recitals. 69 See CelestialRX , 2017 WL 416990, at *4 ; see also Eakins Aff. Ex. 25 at Partner Schedule. 70 Am. Compl. ¶ 21. 71 Id. 72 Id. ¶ 45. 73 The Krivul ka Defendants therefore consist of Krivulka (and, currently, his estate), entities tha t Krivulka wholly and directly owned, and entities in which Krivulka held beneficial majority ownership.13 second group is the “Mazur De fendants,” which consists of Mazur and LMazur

Associates. The other Defendants are grouped individually: Olsen , Cranford

Pharmaceuticals , Holmdel Pharmaceuticals , and Akrimax.

B. Akrimax from Founding to July 1, 2013
1. Akrimax is Founded

a. Akrimax’ s Ownership Structure Akrimax was formed as a Delaware limited liability company by Defendants

Krivulk a a nd Mazur on October 24, 2007. 74 N either individual made an initial capital contribution. 75 Plaintiff CelestialRX became a member of Akrimax on approximately December 1, 2007. 76 Lauma s facilitated an investment of $35 million
into Akrimax, and in return Cel estialRX (which Laumas controlled) was made a

member of Akrimax and given voting units. 77 On January 11, 2008, Akrimax amended its governing documents (the “Second Amended LLC Agreement”). 78
According to the Second Amended LLC Agreement, CelestialRX owned 49.9% of Common Voting U nits; and Krivulka and Mazur each owned 25.5% of Common Voting U nits. 79

74 Am. Compl. ¶ 28. 75 Id. ¶¶ 28, 32. 76 Id. ¶ 31. 77 Id. ¶¶ 31, 32; s ee also CelestialRX Invs., LLC v. Krivulka , 2017 WL 416990, at *5 (Del. Ch. Jan. 31, 2017) (describing in more detail that Laumas facilitated an investment from a previous employer, an investment fund , which received non

- voting preferred units ). 78 Am. Compl. ¶ 32; id. Ex. A. 79 Id. ¶ 32; id. Ex. A , at Sub e x. A.14 b. Akrimax’s Initial Board of Directors According to the Second Amended LLC Agreement , “the business affairs of [Akrimax] shall be manage d by or under the direction of the Manager.” 80 T he “Manager” of Akrimax was further defined as the “Board of Directors acting collectively.” 81 The Agreement specifically named Krivulka, Mazur , and Laumas

as the initial directors of Akrimax. 82 According to the Agreement, e ach director had

one vote, 83 and a ll actions taken by the Board of Directors required a pproval of a majority of directors. 84 Furthermore, a director acting individually did not have the authority to act for Akrimax. 85
In terms of fiduciary duties , t he Second Amended L LC Agreement provided
in Section 4.01(h) that: The members of the Board of Directors shall have no fiduciary duties to the Company or the Members and shall not be personally liable to the Company or to its Members for breach of any duty that does not invol ve (i) an act or omission not in good faith or which involves intentional misconduct or a knowing violation of law; or (ii) a transaction from which such member of the Board of Directors derived an improper personal benefit. 86

80 Id. Ex. A § 4.01(a). 81 Id. ¶ 33; id. Ex. A § 4.01(b). 82 Id. ¶ 33; id. E x. A § 4.01(b). 83 Id. ¶ 33; id. Ex. A § 4.01(c). 84 Id. ¶ 42; id. Ex. A § 4.01(c). 85 Id. ¶ 42; id. Ex. A § 4.01(c). 86 Id. ¶ 43; id. Ex. A § 4.01(h).15 Sections 8.01 and 8.02 of the Second Amended LLC Agreement further provided provisions which governed tra nsactions with interested partie s, conflicts of interest, and the ability of members and directors of Akrimax to engage in bu siness opportunities in competition with Akrimax. 87

The S econd Amended LLC Agreement al so named Krivulka and Mazur as

o fficers of Akrimax. 88 Specifically, Krivulka was Chairman and Mazur was Vice

Chairman. 89 According to the Agreement, officers “are not ‘managers’ (within the meaning of the Act) of [Akrimax], bu t the Manager may delegate to such Officers such power and authority as the Manager deems advisable.” 90

c. Akrimax Enters into Consulting Agreements with Krittika, LMazur Associates , and JJK Partners In the spring of 2008, Akrimax entered into consulting agree ments with JJK
Partners, LMazur Associates and Krittika. 91 These agreements were dated February
1, 2008. 92 The agreements provided that Akrimax would pay each entity two percent

of Akrimax’s gross revenues. 93 The agreements also included covenants not to

87 Id. Ex. A §§ 8.01, 8.02. 88 Id. ¶ 44. 89 Id. Ex. A § 4.03(a). 90 Id. The “Act” is defined as the Delaware Li mited Liability Company Act. See i d. Ex. A , at Recitals. 91 Id. ¶ 45. 92 Id. The inconsistency between the time of contracting and the dates of the consulting agreements is not an error of the Court. 93 See Eakins Aff. Ex. 6 (Consulting agreement with JJK Par tners ); Zahler Aff. Exs. 23 (Consulting Agreement with Krittika), 24 (Consulting Agreement with LMazur Associates).16 c ompete. As a result, JJK Partners and LMazur Associates were prohibited from competing with Akrimax and from directly or indirectly owning an interest in any entity that competes with Akrimax. 94

2. Rouses Point Manufacturing Facility and the Inderal License 95 On January 11, 2008, Akrimax purchased a manufacturing facility in Rouses Point, New York from Wyeth Pharmaceuticals ( “ Wyeth ” ) for $20 million. 96 In another agreement executed on the same day, Akrimax purchased the rights to the pharmaceutical Inderal, and certain o ther drugs, from Wyeth for $12 million. 97

3. The Tirosint Sublicense
On January 27, 2010 , Akrimax and Alpharma Pharmaceutica l s , LLC (“Alpharma”) entered into an exclusive sublicense agreement (the “Alpharma Agreement”) for Akrimax to acquire th e sublicense to the pharmaceutical Tirosint

. 98
Alpharma had previously acquired the exclusive license to distribute and sell Tirosint from Institut Biochimique SA (“IBSA”), the Swiss patent holder of

Tirosint

. 99 Under the Alpharma Agreement, Alpharma assig ned all of its rights

94 Am. Compl. ¶ 47; see also Zahler Aff. Exs. 23, 24. 95 This subsection does not appear in the Amended Complaint but provides helpful backgro und for the reader and was included in my Memorandum Opinion of January 31, 2017 [hereinafter, “Celestial I”]. 96 CelestialRX Inv s
. , LLC v. Krivulka , 2017 WL 416990, at *5 (Del. Ch. Jan. 31, 2017). 97 Id. 98 Am. Compl. ¶ 35. 99 Id.17 under its exclusive license from IBSA to Akrimax. 100 In return, Akrimax agreed to expend certain efforts to distrib ute Tirosint in the United States; including a minimum amount of expenditures, the purchase of a minimum quantity of Tir osi nt
from IBSA, and the maintenance of a certain level of sales force. 101
On the same day the Alpharma Agreement was executed , Krivulka , individually and without board approval , caused Akrimax to enter into the

“ Assignment and Assumption Agreement ” with M ist Acquisition. 102 Under the Assignment and Assumption Agreement, Akrimax assigned its Tirosint sublicense to Mist Acquisition. 103
Almost two years later , on December 1, 2011, Krivulka , individually and again without board approval , caused Akrimax to ente r into the “ Promotion, Distribution and Support Services Agreement ” with Mist Acquisition. 104 Th e
A greement was purported to be retroactive to January 27, 2010, the original date of

the Alpharma Agreement a nd the subsequent assignment of the Tirosint subl icense

from Akrimax to Mist Acquisition

. 105 Under the Promotion, Distribution and Support Services Agreement, Mist Acquisition transferred the Tirosint sublicense

back to Akrimax ; in return , Akrimax assumed all th e obligations of the sublicense

100 Id. 101 Id. 102 Id. ¶ 54. 103 Id. 104 Id. ¶ 55. 105 Id.18 and agreed t o pay a “distribution fee” of ten percent of gross sales of Tiro sint to Mist Acquisition and Mazur. 106 Furthermore, under the Promotion, Distribution and Support Services Agreement , Mist Acquisition could take back the sublicense to

Tirosint “for convenien ce” after thirty days’ notice. 107
Mist Acquisition and Mazur (but not Laumas or CelestialRX ) separately

entered into a side agreement to split the proceeds of any sale by Mist Acquisition

of the Tirosint sublicense. 108

4. The Rights to NitroMist, Suprenza, and Pr imlev
Prior to 2 013, Krivulka also caused Akrimax to enter into contractual relationship s with Mist Acquisition and Mist Pharmaceuticals after those two entities

obtain ed the distribution rights to the pharmaceuticals NitroMist, Suprenza, 109 and

Primlev. 110 A s with Tirosint, Krivulka purported to enter Akrimax into distribution
agreements with Mist Acquisition or Mist Pharmaceuticals for NitroMist and Primlev without the knowledge or approval of the Akrimax Board of Directors. 111
Under the distribution agreemen ts for NitroMist and Primlev, Akrimax agreed to make royalty payments to Mist Acquisition and Mist Pharmaceuticals, in addition to

106 Id. 107 Id. 108 Id. ¶ 57. 109 Suprenza is briefly mentioned in the Amended Complaint, but no actions or agreements related to Suprenza appear to be at issue in this litigation. 110 Id. ¶ 59. 111 Id.19 taking on the obligations that Mist Acquisition and Mist Pharmaceuticals had agreed to when they first obtained the distribut ion rights from third parties

. 112 Furthermore, Akrimax’s agreements for the distribution rights to NitroMist and Primlev included provisions for termination at will by Mist Acquisitions and Mist Pharmaceuticals. 113

5. The P fizer Settlement 114 After Akrimax purch ased the Rouses Point manufacturing facility and distribution rights to Inderal from Wyeth , Pfizer acquired Wyeth

. 115 Pfizer alleged that Akrimax had failed to comply with its obligations under the original agreements with Wyeth. 116 Ak rimax entered into a settlement with Pfizer to resolve this dispute

in 2011. 117 Under the settlement , Akrimax returned the manufacturing facility, a nd also the rights to Inderal and certain other drugs. 118 However, on the same day , Pfizer and Akrimax entered into a “ License and Option Agreement, ” under which Akrimax could continue selling Inderal into 2013 , and would thereafter have the option to extend t he licen se in exchange for a lump sum payment

. 119

112 Id. ; s ee also CelestialRX Inv s
. , LLC v . Krivulka , 2017 WL 416990, at *6

– 7 (Del. Ch. Jan. 31, 2017). 113 Am. Compl. ¶ 59, 60; see also CelestialRX , 2017 WL 416990, at *7

– 8. 114 This subsection also does not appear in the Amended Complaint but provides helpful background for the reader and was inclu ded in Celestial I. 115 CelestialRX , 2017 WL 416990, at *7. 116 Id. 117 Id. 118 Id. In return, Akrimax was released from certain obligations to Pfizer. Id. 119 Id.20 6. Termination of the Distribution Rights to Tirosint, NitroM ist and Primlev On April 12, 2013, Mist Acquisition sent a letter to Akrimax purporting to terminate the sublicense agreement for Tirosint; this letter was signed by

Krivulka. 120 Mist Acquisition and Mist Pharmaceuticals also purported to terminate

the ir ag reements with Akrimax for the distribution rights to NitroMist and Primlev on the same day. 121

Laumas received a copy of the Mist Acquisition letter regarding Tirosint , and learned for the first time of the assignment of the Tirosint sublicense from Akrima x to Mist Acquisition, and the subsequent re

- assignment of the same sublicense back

to Akrimax. 122 Krivulka represented to Laumas that Akr imax’s financial condition

was tenuous , 123 the implication being that Akrimax could not have first acquired the

distribu tion rights to Tirosint and the other drugs on its own, thereby justifying the inclusion of the intermediary entities

. As a result, Laumas was shown financial and

other information from Akrimax. 124 The financial information provided to Laumas
(and Celestia lRX) was false and incomplete. 125 Olsen , who was Akrimax’s CEO at
the time, participated in withholding and concealing correct financial information. 126

120 Am. Compl. ¶ 60. 121 Id. 122 Id. ¶ 61. 123 Id. ¶ 65. 124 Id. 125 Id. ¶¶ 65, 66. 126 Id. ¶ 65.21 Akrimax threatened suit against Mist Pharmaceuticals and Mist Acquisitions. 127 Krivulk a requested a stand still, and the parties negotiated a settlement for the return of the rights to Tirosint, NitroMist, and Primlev to

Akrimax. 128

C. T he 2013 “Settlement” and Related Agreements In broad strokes, under the settlement between the parties, Krivulka agreed to

retu rn

— or rather have Mist Acquisition a nd Mist Pharmaceuticals return

— the licensing rights to Tirosint and the other drugs to Akrimax. 129 Krivulka further gave assurances that he would make “good faith efforts for Akrimax to sell Tirosint and other product rig hts at the best possible price,” 130 and that in the meantime , he would maximize the drug assets and avoid default on Akrimax’s licensing agreements. 131

In return , Krivulka asked that the royalty rate paid by Akrimax to Mist Acquisition

and Mist Pharmaceutical s for Tirosint and the other pharmaceuticals be increased , and that , in the event of a default on the royalty payments , the rights to those pharmaceuticals be returned to Mist Acquisition and Mist Pharmaceuticals

. 132

127 Id. ¶ 62. 128 Id. ¶ 63. 129 Id. ¶ 67. 130 Id. ¶ 68. 131 Id. 132 Id. ¶ 67.22 Krivulka also wanted Laumas , Mazur , and himself to execute a release of

claims

. 133 Furthermore, Krivulka wanted changes to Akrimax’s ownership and
management structure. 134 Laumas assented to these terms , and o n July 1, 2013 , the

settlement was finalized through at least f ourteen different agreeme nts. 135

1. The Return of the Rights to Tirosint and the Other Drugs One of the agreements executed on July 1, 2013 was the Tirosint Termination and Royalty Agreement. 136 Under this Agreement, Akrimax regained the distribution rights to Tirosint and, i n return, A krimax agreed to pay to Mist Acquisition a royalty of thirty

- five percent of gross sales of Tirosint ; 137 this was an increase from their previous agreement. Additionally, according to the Tirosint Termination and Royalty Agreement, if Akrimax defaulted on t he royalty payments and failed to cure the default within forty

- five days of notice of default , Mist Acquisition could retake the Tirosint sublicense. 138 Akrimax entered into similar agreements for the return of the rights to NitroMist and Primlev; that is , Akrimax’s

133 Id. 134 Id. ¶ 72. 135 Id. ¶ 73. 136 Id. ¶ 75. 137 Id. The return of the Tirosint rights was accomplished by the termination of the initial January 27, 2010 assignment of the rights to Tirosint from Akrimax to Mis t Acquisition. See CelestialRX Inv s
. , LLC v. Krivulka , 2017 WL 416990, at *10 (Del. Ch. Jan. 31, 2017). 138 Am. Compl. ¶ 75.23 rights to both drugs were re stored , but at increased royalty rates and with royalty default and right reversion provisions

. 139

2. The Release Agreement 140

On July 1, 2013, Krivulka, Mazur , and Laumas also ent ered into a release
agreement ( the “ Release Agreement ”) , 141 under which the “ Releasing Parties ” agreed to release the “ Released Parties ” from “any and all claims relating to, arising from, or in any way connected to any actions taken by the parties in connection with the company.” 142 The Release Agree ment is governed by New York law. 143

CelestialRX was not included as a “ Party” to the Release Agreement; 144 instead , “Parties” is a def ined contractual term that encompasses only Mazur, Laumas , and

Krivulka. 145 The Release Agreement defined “Releasing Parties” and “Released Parties” differently; in particular, affiliates of Mazur, Laumas , and Krivulka were

defined to be Released Parties but were not Releasing Parties. 146 As a result,

CelestialRX , an affiliate of Laumas, is a Released Party but not a Relea sing Pa rty,

139 Id. ¶ 76. 140 Th is was a subject of Celestial I; accordingly , I cite to that Opinion below. 141 CelestialRX , 2017 WL 416990, at *14

. 142 I d. (internal quotations omitted). 143 Id. at *13. 144 Id. at *14. 145 Id. at *15. 146 Id.24 and therefore , under the Release Agreement as written , CelestialRX did not release

its claims existing as of July 1, 2013. 147

3. Amendment No. 7 to the Second Amended LLC Agreement

a. Ownership and Control On July 1, 2013, Akrimax amended its operating agreem ent through Amendment No. 7 to the Second Amended LLC Agreement (“Amendment No. 7”),

under this Amendment JJK Partners was given one hundred percent of the voting rights in Akrimax, and Krivulka, indirectly, became the owner of f ifty

- one percent
of total u nits, 148 also know n as “Krivulka Units.” Amendment No. 7 stated that the se “Krivulka Units” would never decrease below fifty

- one percent of total units. 149

Under Amendment No. 7, Mazur lost his voting units; however , his ownership

interest increased f rom 25. 5% of common voting unit s to approximately thirty percent of common non

- voting units. 150 On the other hand, according to

Amendment No. 7 , CelestialRX’s ownership interest decreased from forty

- nine percent of common voting units to nineteen percent of common non

- voting units. 151

147 Id. To be precise , I denied the Defendants’ Motion s for Partial Summary Judgment that CelestialRX had released claims existing as of July 1, 2013. Id. I note that the Defendan ts argued mutual mistake, an element of an ( unpled ) reformation claim. 148 Am. Compl. ¶¶ 73, 77. 149 Id. ¶ 77. 150 Id. ¶ 78. 151 Id. ¶ 79.25 Amendment No. 7 also changed the management structure of Akrimax. The Amendment now defined “Manager” as Krivulka alone; 152 previously , “ Manager ”

had been defined as the Board , acting collectively. Furthermore, Krivulka was

named in Ame ndment No. 7 as the sole director of Akrimax. 153 The Amendment did require Krivulka to submit Akrimax’s budget to Mazur and Laumas for approval. 154

b. Fiduciary Duties 155

A s described above , Amendment No. 7 changed the ownership and management structure in the Sec ond Amended LLC Agreement. Amendment No. 7 also amended Section 4.01(h) of the Second Amended LLC Agreement. That provision now provides that:

N otwithstanding anything to the contrary in this Agreement, neither the Manager nor any of the members of the B oard of Directors nor any Member shall have any fiduciary duties to the Company or the Members or shall be personally liable to the Company or its Members for a breach of any duty that does not involve (i) an act or omission not in good faith or which invo lves intentional misconduct or a knowing violation of law; or (ii) a transaction from which such Manager, a member of the Board of Directors, or Member derived an improper personal benefit. 156

152 Id. ¶ 77. 153 Id. 154 Id. ¶ 80; id. Ex. B § 7. 155 This was also the subject of Celestial I; accordingly, I cite to that Opinion below. 156 Id. Ex. B § 6.26 This language in Amendment No. 7 “generally eliminates common

- law fiduciary duties except that it retains liability for intentional or illegal misconduct and other bad faith actions, as well as for improper self

- dealing.” 157 “[T] hose duties are contractual in nature,” although “common law fiduciary duties are instructive in supplying the definition” to undefined terms such as “bad faith.” 158

In turn , Sections 8.01 and 8.02 of the Second Amended LLC Agreement, which were unchanged by Amendment No. 7, 159 “ provide specific contractual

standards whic h govern conflict transaction s and corporate opportunities.” 160
Section 8.02 “eschews the corporate opportunity doctrine, and permits conflicted interests to be held by Directors and Members.” 161 Section 8.01 contains two provisions, which provide alternative safe harbors for conflicted transactions. 162
Under Section 8.01(a) a conflicted party bears no liability where a conflicted transaction was entered in the absence of bad faith and the “Manager” determines in good faith that the transaction is fair and reasonable to the Company. 163

Alt ernatively, under Section 8.01(b), the conflict ed party can avoid liability by acting in good faith and resolving its conflict by a good

- faith balancing of the relative

157 CelestialRX Inv s
. , LLC v. Krivulka , 2017 WL 416990, at * 16 (Del. Ch. Jan. 31, 2017). 158 Id. at * 16

. 159 See Am. Compl. Ex. B. 160 CelestialRX , 2017 WL 416990, at * 17. 161 Id. at *18. 162 Id. 163 Id. (internal quotations omi tted).27 interests of each party (including its own interest) and the benefits and burdens

relat ing to such interests. 164 Conflicted transactions that do not achieve eithe r safe

harbor are therefore transactions from which the conflicted “party may be shown to have derived an improper personal benefit under Section 4.01(h)(ii), in breach of his
[contr actual] duty under that section.” 165

4. Other Relevant Agreements on July 1, 2013 The consulting agreement between Akrimax and Krittika was also amended on July 1, 2013. 166 According to the amendment, Krittika would still be paid a consulting fee equal to two pe rcent of Akrimax’s gross sales, but thi s fee would now

be payable quarterly instead of monthly. 167 Relatedly, Amendment No. 7 provided that Krittika’s fees would be the first paid from Akrimax’s funds available for

distribution

. 168 Furthermore, Akrimax agree d to pay Krittika arrears on consulting

fee s that had accrued to approximately $4.7 million. 169 Krittika and Mazur also

entered into a related agreement, pursuant to which Mazur agreed to pay Krittika the difference between the actual amount Akrimax paid to Krittika on a quar terly basis and the amount payable to Krittika by Akrimax

. 170 Akrimax’s consulting

164 Id. (internal quotations omitted). 165 Id. 166 Am. Compl. ¶ 144. 167 Id. ¶¶ 143, 144. 168 Id. Ex. B § 10(i). 169 Id. ¶ 144. 170 Id. ¶ 145.28 agreements with JJK Partners and LMazur Associates were also amended on July 1,
2013, 171 but these amendments did not chan ge the prohibition on competing wit h Akrimax and diverting opportunities from Akrimax. 172
On July 1, 2013, Krivulka and Mazur also entered into a new side letter
agreement. 173 Pursuant to the side letter, Mist Acquisition agreed to pay Mazur
twenty

- five percent of the Tirosint royalties it rec eived from Akrimax. 174
Additionally, u nder the side letter, if Mist Acquisition reacquired the Tirosint asset from Akrimax and then sold it, Krivulka and Mazur agreed to split Krivulka’s share of the proceeds. 175 On June 28, 2013, prior to the side letter ag reement between
Krivulka and Mazur, Mazur had agreed to pay Krittika 14.3% of the Tirosint royalties that Mazur received from Mist Acquisition. 176

D. Akrimax After the 2013 “ Settlement ”
1. Cranford Pharmaceuticals Acquires the Rights to Inderal In late 2013, Akri max’s license with Pfizer to sell Inderal expired, and Akrimax chose not to exercise its option to repurchase the licensing rights. 177

171 The amendments to the consulting agreements with JJK Partners and LMazur Associates, similar to the changes to the Kri ttika consulting agreement, changed the consulting fee payment period from monthly to quarterly and set an amount for arrears on consulting fees owed by Akrimax to JJK Partners and LMazur. See Zahler Aff. Exs. 25, 26. 172 Am. Compl. ¶ 85 ; s ee also Zahler Aff . Exs. 25, 26. 173 Am. Compl. ¶ 74. 174 Id. ¶¶ 74 n.3, 150. 175 Id. ¶ 74. 176 Id. ¶ 151. 177 Id. ¶ 95.29 Cranford Pharmaceuticals, which was formed in October 2013, then acquired the rights to Inderal from Pfizer. 178 Cranford Ph armaceuticals planned to derive a royalty stream from owning the licensing rights to Inderal and to leverage th e extended release technology used by Holmdel Pharmaceuticals to create a new Inderal product. 179
On February 4, 201 4 , Akrimax entered into agreeme nts with Cranford Pharmaceuticals and Holmdel Pharmaceuticals in furtherance of the plan to create an extended release product based on Inderal. 180 Cranford Therapeutics and JCP had together contributed $25 million in capital to Cranford Pharmaceuticals to fund the purchase of the Inderal rights from Pfizer

. 181 Akrimax guaranteed Cranford Therapeutics and JCP’s capital contributions to Cranford Pharmaceuticals

. 182 Akrimax also assigned to Cranford Pharmaceuticals more than $5.5 million in c ash

and other assets and agreed to assume Cranford Pharmaceuticals’ royalty payments

to non

- party AstraZeneca. 183 Furthermore, Akrimax agreed to distribute Inderal for

Cranford Pharmaceuticals. 184 In return, Cranford Pharmaceuticals agreed to pay

Akrimax an “administrative fee” of ten percent of the net sales of Inderal. 185 Under

178 Id. 179 Id. ¶¶ 97, 99. 180 Id. ¶ ¶ 100

– 105. 181 Id. ¶ 100. 182 Id. 183 Id. 184 Id. 185 Id. ¶ 102.30 the agreement between Cranford Pharmaceuticals and Akrimax, Cranford Pharmaceuticals can terminate the agreement for any reason after the first year and

after 1 80 d ays’ notice

. 186

Holmdel Pharmaceuticals l icensed its extended release technology to

Cranford Pharmaceuticals. 187 As part of the license agreement, Akrimax guaranteed $28.2 million in royalty payments from Cranford Pharmaceuticals to Holmdel

Pharmaceuticals. 188
To date, the “administrative fee” pai d to Akrimax based on net sales of Inderal has not exceeded the $5.5 million of assignments to Cranford Pharmaceuticals. 189 Furthermore, since February 4, 2014, Akrimax has paid over $14 million to Holmdel

Pharmaceuticals to fulfill its obligation to guaran tee royalties owed by Cranford

Pharmaceuticals

. 190

2. Akrimax Defaults on the Tirosint Royalties to Mist Acquisition As previously mentioned, under one of the July 1, 2013 agreements , Akrimax regained the sublicense to Tirosint . Akrimax had agreed to pay a hig her royalty rate to Mist Acquisition and to return the Tirosint sublicense to Mist Acquisition if it

defaulted on those royalty payments

. Notwithstanding its contractual obligation to

186 Id. ¶ 104. 187 Id. ¶ 100. 188 Id. 189 Id. ¶ 103. 190 Id.31 do so, Akrimax did not make a royalty payment for Tirosint to Mist Acqu isition after
October 1, 2013. 191 However, around the same time, Akrimax did decide to assign

millions of dollars in assets to Cranford Pharmaceuticals and to guarantee tens of

millions of dollars in capital contributions and royalty payments to Cranford

Ph armaceuticals and Holmdel Pharmaceuticals. On February 21, 2014, Mist Acquisition notified Akrimax by letter that

A k rimax had breached the July 1, 2013 agreement by defaulting on royalty payments

that were due on February 15, 2014. 192 According to the lette r, Akrimax ha d until April 7, 2014 to cure the default or the agreement would be terminated and the rights

to Tirosint transferred to Mist Acquisition. 193 Laumas was not aware of this letter at the time it was received by Akrimax

. 194 Additionally, despite th e requirement in

Amendment No. 7 that Laumas receive and approve Akrimax’s budget, Laumas was not provided with a copy of Akrimax’s 2014 budget. 195
On November 1, 2014, Akrimax and Mist Acquisition entered into a Termination and Assignment Agreement, under which, based on Akrimax’s default,

the sublicense to Tirosint and the license to NitroMist reverted back to Mist

191 Id. ¶ 87. 192 Id. ¶ 90. 193 Id. 194 Id. ¶ 91. 195 Id. ¶ 89.32 Acquisition. 196 Despite the termination of t he agreement and loss of distribution rights , Akrimax continued to market and distribute Tirosint a nd NitroMist. 197
As previously mentioned, the sublicense for Tirosint came from Alpharma, which in turn held an exclusive license from IBSA. On January 14, 2015, Alpharma’s exclusive license from IBSA was terminated. 198 On the same day, Mist Acquisition and Akrimax entered into an Exclusive License, Supply and Distribution Agreement with IBSA. 199 Under the Agreement, Mist Acquisition was granted the

exclusive license to distribute Tirosint in the United States. 200 Akrimax guaranteed Mist Acquisition’s financial and performance obligations to IBSA under this Agreement. 201 Akrimax continued to market and distribute Tirosint without an agreement with Mist Acquis i tion. 202
On July 31, 2015, Akrimax entered into the Promotion, Distribution and Support Agreement with Mist Acquisition , under which Mist Acquisition granted

Akrimax a sublicense to Tirosint. 203 According to this a greement, Akrimax agreed to make all royalty and other payments that Mist Acquisition was obligated to make

196 Id. ¶ 93. 197 Id. ¶ 94. 198 Id. ¶ 111. 199 Id. ¶ 114. 200 Id. 201 Id. ¶ 115. 202 Id. ¶ 117. 203 Id. ¶ 118.33 to IBSA. 204 Additionally, Akrimax agreed to pay Mist Acquisition a “distribution

fee” equal to ten percent of the gross sales of Tirosint. 205 Mist Acquisition can

terminate the A greement “for convenience” after thirty days’ notice. 206 T he Agreement was purported to be retroactive to November 1, 2014, the date that Akrimax’s previous sublicense for Tirosint was terminated. 207

Additional ly, u nder the July 31, 2015 agreement for the Tirosint sublicense , Akrimax was obligated to issue over $11 million in promissory notes, the majority of which were payable to JAK Investments and LMazur Associates

. 208 These notes supposedly represented the unpai d “distribution fees” from the a greement with Mist Acquisition that Akrimax had defaulted on , and which had thereby been terminated

i n November 2014. 209 The Agreement al so imposed on Akrimax the obligation to pay for and provide operating services for Mist Acquisition. 210
On September 2, 2015, Laumas met with Krivulka and several Akrimax

officers to discuss the status of eff orts to sell Akrimax’s rights to Tirosint. 211 Whi le

Krivulka and Akrimax officers told Laumas that Akrimax would be accepting bids from prospective purchase r s, they did not tell Laumas that Mist Acquisition had

204 Id. ¶ 119. 205 Id. 206 Id. 207 Id. ¶ 118. 208 Id. ¶ 120. 209 Id. 210 Id. ¶ 121. 211 Id. ¶ 124.34 obtained the exclusive license to Tirosint. 212 Krivulka did, however, reveal to

Laumas that Akr imax had defaulted on its royalty obligation to Mist Acquisition and

that the Tirosint sublicense had reverted to Mist Acquisition. 213 As a result, per Krivulka, Mist Acquisition (and not Akrimax) would therefore be selling the rights

to Tirosint. 214 Laumas asked why Akrimax had defaulted on royalty payments to Mist Acquisition and lost the sublicense

. 215 In response Krivulka cited excess
overhead; in particular , Krivulka cited a Tirosint price increase by IBSA and

Akrimax’s debt. 216 H owever, in truth both the price increase and the majority of

Akrimax’s debt

— that is , the promissory notes

— occurre d after Akrimax defaulted on the Tirosint royalty payments

. 217
During this meeting, Laumas also asked why he had not been provided with Akrimax’s budget for 2014 , and wh y Akrimax’s default and loss of the Tirosint

sublicense were not reflected in the financials that were provided to him. 218 Laumas

was not given a response to the former; and regarding the latter , he was told that the

sublicense was not considered an asset. 219 Plaintiff CelestialRX fil ed a Complaint shortly thereafter on November 20, 2015, and also filed a Motion for a Temporary

212 Id. 213 Id. ¶ 125. 214 Id. 215 Id. ¶ 126. 216 Id. ¶¶ 126, 127. 217 Id. ¶¶ 126, 127. 218 Id. ¶¶ 129, 130. 219 Id. ¶¶ 129, 130.35 Restraining Order (“TRO”) in an attempt to prevent the sale of assets, including

Tirosint. 220

3. Krittika Is Not Paid Its Consulting F ees Despite the July 1, 2013 amendment to the consulting agreement between Akrimax and Krittika, Akrimax has withheld over $6 million due to Krittika. 221
During the time Akrimax has withheld payment to Krittika , Akrimax has continued to make payments to JJK Par tners and LMazur Associates , pursuant to Akrimax’s consulting agreements with those entities. 222 Additionally, despite the side letter agreement between Krittika and Mazur, Mazur has not paid to Krittika the difference between the quarterly amounts actually paid to Krittika by Akrimax, and the

amount s payable. 223 Furthermore, despite the June 28, 2013 agreement between Mazur and Krittika, Mazur has never paid Krittika any portion of the Tirosint royalties that Mazur has received from Mist Acquisition. 224

E. Proce dural History
Plaintiff Celest ialRX filed its verified C ompla int on November 20, 2015. I

held a hearing on Celestial RX ’s petition for a Temporary Restraining Order
(“TRO”) on November 24, 2015, and I s ubsequently granted the TRO request on

220 See D.I. 1. 221 Am. Compl. ¶ 146. 222 Id. ¶ 148. 223 Id. ¶ 147. 224 Id. ¶ 151.36 December 3, 20 15. The parties then engaged in expedited discovery, followed by

O ral A rgument on CelestialRX’s request for a preliminary injunction on February 8,

2016

. I denied CelestialRX’s request for a preliminary injunction from the B ench,

and CelestialRX filed an Amended Complaint on March 8, 2016. The Amended Complaint added Krittika as a plaintiff , additional Defendants, and additional

counts. At the February 8, 2016 argument for a preliminary injunction, I indicated

that , moving forward , two legal issues neede d to be decided: first, the effect, if any of the July 1, 2013 Release Agreement, and se cond, the nature of the duties ow ed

under Akrimax’s LLC Agreement. Pursuant to an April 14, 2016 Scheduling Order, the parties were permitted discovery on these two pr eliminary issues. The Mazur

Defendants filed a Motion to Dismiss the Amended Complaint on March 22 , 2016

. 225 On July 19, 2016, the Krivulka Defendants and Mazur Defendants separately filed Motions for Partial Summary Judgment, and the Krivulka

Defendants filed a Motion to Dismiss the Amended Complaint. 226 The Motions for Partial Summary Judgment were based on the two preliminary issues I had

identified . On July 5, 2016, Defendant Cranford Pharmaceuticals and Defendant Holmdel Pharmaceuticals also separatel y filed Motions to Dismiss the Amended

225 Mazur had also filed a Motion to Dismiss the original Complaint on Nov ember 24, 2015. 226 The Krivulka Defendants had also filed a Motion to Dismiss the original Complaint on January 6, 2016.37 Comp laint. Finally, on July 7, 2016 , Defendant Olsen file d a Motion to Dismiss the Amended Complaint

. I heard Oral Argument on all the Defendants’ Motions for Partial S ummary Judgment and Motions to Dismiss on Octob er 17, 2016, which focused on the two preliminary issues identified . On January 31, 2017, I issued a Memorandum Opinion that addressed only the Defendants’ Motions for Partial Summary Judgement, which I granted in part and denied in part. I directed the parties to “confer regarding the most efficient way to move forward in light of [the] Memorandum Opinion.” 227 The parties then indicated that they would pursue
mediation; however, toward the end of 2017 , they reported that the mediation had

failed. A sched uling confere nce was held on January 3 1, 2018, following which the parties submitted letters on February 7, February 14, and February 22, 2018, indicating that they considered the previously filed Motions to Dismiss to remain pending

. 228

Defendant Krivulka died on February 17, 2018

. On April 4, 2018, i n light of his passing and given indication from the parties that they were engaging in

settlement discussion s , I suspended consideration of the then

- pending Motions to

Dismiss. I later learned that th e settl ement discussions were not successful

. Given

227 CelestialRX Investments, LLC v. Krivulka , 2017 WL 416990, at *19 (Del. Ch. Jan. 31, 2017). 228 The Parties also submitted suppleme ntal letter briefs on the Motions to Dismiss on October 20, 2016.38 the death of Krivulka, On May 29, 2018, the Plaintiffs filed a Motion to Substitute, which was promptly opposed. On October 23 , 2018, the Plaintiffs represented that

the Motions to Dismiss and the Motion to Su bstitute were once again ripe for adjudication. O n November 5, 2018, the parties indicated via letter that no party to the action, despite the more than two years since Oral Argument, sought to file further supplemental briefing on the Motions to Dismiss

. I heard Oral Argument on

the Motion to Substitute on De cember 5, 2018, and granted the Motion to Substitute on the same day

. 229 Having resolv ed the Motion to Substitute, I considered the

Motions to Dismiss again sub mitted for decision on December 5, 2018

. II. A NALYSIS
The Plaintiffs bring sixteen counts against fifteen Defendants (not including
ten John Does and ten ABC entities) in their Amended Complaint

. In the Amended Complaint , CelestialRX brings against all the Defendants : a direct and derivative

claim for Accounting; 230 a direct and derivative claim for Bad Faith Breach of Fiduciary Duty; 231 a derivative claim for Waste; 232 a derivative claim for
Conversion; 233 a direct claim for Civil Conspiracy; 234 and a direct and derivative

229 The Motion to Substitute is reflected in the caption of this Opinion and was granted following a short telephonic Oral A rgument on the same date, December 5, 2018. 230 Count I of the Amended Complaint

. See Am. Compl. ¶ ¶ 155

– 160. 231 Count II of the Amended Complaint. See id. ¶ ¶ 161

– 171. 232 Count V of the Amended Complaint. See id. ¶ ¶ 188

– 192. 233 Count VII of the Amended Complaint. See id. ¶ ¶ 198

– 201. 234 Count IX of the Amended Complaint. See id. ¶ ¶ 214

– 218.39 claim for Unjust Enrichment. 235 Cele stialRX also brings counts against only certain

of the Defendants: a direct and derivative claim for Akrimax Officers Breach of Fiduciary Duties against Krivulka, Mazur, and Olsen; 236 a derivative claim for Breach of Restrictive Covenants against Krivulka, J JK Partners , and LMazur
Associates; 237 a direct and derivative claim for Aiding and Abetting Breach of Fiduciary Duty against all Defendants, except Kriv u lka; 238 a direct claim for Fraud/Fraudulent Inducement against Krivulka; 239 a direct claim for Breach of Ope rating Agreement against Krivulka and Mazur; 240 a direct claim for Breach of Implied Covenant of Good Faith and Fair Dealing against Krivulka and Mazur; 241
seeking Declaratory Judgment against Krivulka, Mazur , and JJK Partners; 242 and a

direct claim for “Majority Oppression” against Krivulka, Mazur , and JJK

Partners. 243 Krittika brings a direct claim for Breach of Con tract against Akrimax

and Mazur 244 and a direct claim for Tortious Interference with Contract against

Krivulka. 245

235 C ount XIII of the Amended Complaint. See id. ¶ ¶ 234

– 237. 236 Count III of the Amended Complaint. See id. ¶ ¶ 172

– 176. 237 Count IV of the Amended Complaint. See id. ¶ ¶ 177

– 187. 238 Count VI of the Amended Complaint. See id. ¶ ¶ 193

– 197. 239 Count VII of the Amended Compl aint. See id. ¶ ¶ 202

– 213. 240 Count X of the Amended Complaint. See id. ¶ ¶ 219

– 222. 241 Count XI of the Amended Complaint. See id. ¶ ¶ 223

– 228. 242 Count XII of the Amended Complaint. See id. ¶ ¶ 229

– 233. 243 Count XIV of the Amended Complaint. See id. ¶ ¶ 238

– 242. 244 Coun t XV of the Amended Complaint. See id. ¶ ¶ 243

– 246. 245 Count XVI of the Amended Complaint. See id. ¶ ¶ 247

– 253.40 The Krivulka Defendants moved to dismis s all counts brought against them
under Rule 12(b)(6), failure to s tate a claim, except for the breach of restrictive

covenant claim , which they moved to dismiss under Rule 12(b)(1), lack of jurisdiction over subject matter. 246 The Mazur Defendants moved to dismiss all counts brought against them under Rule 12(b)(2), lack of jurisdiction over the person, Rule 12(b)(4), insufficiency of process, Rule 12(b)(5), insufficiency of service of process, and Rule 12(b)(6), failure to state a claim. 247 Cranford

Pharmac euticals moved to dismiss all claims brought against it under Rule 12(b)(6),

failure to state a claim. 248 Holmdel Pharmaceuticals also moved to dismiss all claims brought against it under Rule 12(b)(6), failure to state a claim. 249 Finally, Olsen

moved to di smiss all claims brought against him under Rule 12(b)(2), lack of jurisdiction over the person, Rule 12(b)(5), insufficiency of service of process, and
Rule 12(b)(6), failure to state a claim. 250

I will first address the subject matter jurisdiction defense to the claim for

breach of restrictive covenants. I then turn to the Mazur Defendants ’ and Defendant

Olsen’s M otion s to D ismiss on personal jurisdiction, process, and service of process grounds

. In light of my decision here and my previous Memorandum Opi nion of

246 D.I. 135, 208. 247 D.I. 137. 248 D.I. 192. 249 D.I. 193. 250 D.I. 195.41 January 31, 2017 , t he remaining parties shall confer on which Motions to Dismiss

still need to be addressed

. A. Subject Matter Jurisdiction O ver the Consulting Agreements
Defendants JJK Partners and LMazur Associates 251 argue that Count IV of the

Amende d Complaint , breach of restrictive covenants, brought derivatively by CelestialRX against them, should be dismissed under Rule 12(b)(1) for lack of subject matter jurisdiction because the claim is subject to arbitration

. On a motion

to dismiss under Rule 12(b)(1), the plaintiff “bear[s] the burden of establishing subject matter jurisdiction,” and “a court may consider documents outside the complaint.” 252 Furthermore, “Delaware courts lack subject matter jurisdiction to resolve disputes that litigants have c ontractually agreed to arbitrate.” 253 This Court respects, and will enforce, parties’ contractual arbitration commitments.

The restrictive covenants

— non

- co mpete clauses

— at issue here are contained in consulting agreements that JJK Partners and LMazur Asso ciates entered into separately with Akrimax on February 1, 2008 ; each consulting agreement was subsequently amended on July 1, 2013. JJK Partners and LMazur Associates argue that the February 1, 2008 consulting agreements contain governing arbitration

251 LMazur Associates joined JJK Partners’ argument. See Opening Br. in Support of th e Mazur Defs.’ Mot. to Dismiss P ls.’ First Am. Verified Compl. a nd Mot. for Partial Summ. J. , at 14. 252 HBMA Hldgs., LLC v. LSF9 Stardust Hldgs. LLC , 2017 WL 6209594, at *3 (Del. Ch. Dec. 8, 2017). 253 NAMA Hldgs., LLC v. Related World Mkt. Ctr., LLC , 922 A.2 d 417, 429 (Del. Ch. 2007).42 cla use s . CelestialRX , in turn , contends that the arbitration clauses are superseded by the July 1, 2013 amendments to the consulting agreement s

. 254 That is to say,

C elestialRX does not contest that the parties agreed to binding arbitration clause s in

the February 1, 2008 agreements

. The Plaintiff ’ s only contention is that the arbitration obligatio ns were terminated via the July 1 , 2013 amendments. In the alternative, CelestialRX proposes that the Court decline to enforce the

arbitration clauses here as a ma tter of judicial policy against dividing disputes

. 255 To

the extent that CelestialRX argues that judicial efficiency would be better served by declining to honor the arb itration clauses, such an argument is misplaced ; again, this Court will respect the se pa rties’ contractual obligations

. 256 I turn to the language of the consulting agreements and the July 1, 2013 amendments.

JJK Partners ’ and LMazur Associates’ consulting agreement s with Akrimax

contain identical provisions on governing law and arbitration. A ccording to the initial February 1, 2008 consulting agreements, each agreement “shall be governed by and construed in accordance with the laws of the State of New Jer sey . . . except

254 Pls.’ Br. in Opp ’ n to the Krivulka Defs.’ Mot. for Partial Summ. J. and Mot. to Dismiss , at 12

– 13. 255 Id. at 142. While the Plaintiffs address arbitration as it pertains to Plaintiff Krittika’s direct claim against Akrimax for breach of the Krittika consulting agreement (Count XV), the Defendants have not moved to d ismiss tha t count on the basis of subject matter jurisdiction, and the Plaintiffs’ argument is therefore misplaced. 256 See, e.g. , Parfi H ld

gs
. AB v. Mirror Im age Internet, Inc. , 817 A.2d 149, 156 (Del. 2002) (“ When parties to an agreement decide that they will submit their claims to arbitration, Delaware courts strive to honor the reasonable expectations of the parties . . . .”).43 with respect to matters of law concerning the internal corporate affairs

. . . .” 257
Additionally: Notwithstanding anything herein to the contrary, in the event that there shall be a dispute among the parties arising out of or relating to this Agreement, or the breach thereof, the parties agree that such dispute shall be resol ved by final and binding arbitration in the State of New York, Borough of Manhattan administered by the American Arbitration Association (the “AAA”), in accordance with AAA’s Commercial Arbitration Rules

. . . . 258 The consulting agreements were amended on July 1 , 2013; t he amendments provided that: The Agreement, amended hereby, shall be construed, governed, interpreted and applied in accordance with the laws in effect in the State of Delaware exclusive of its conflict of laws provisions. Any claim or
con troversy arising out of or related to this Amendment shall be submitted to a court of applicable jurisdiction in the State of Delaware, and each Party hereby consents to the jurisdiction and venues of such court. 259 The July 1, 2013 amendments did not alter or amend the non

- compete provisions found in the initial February 1, 2008 consulting agreements. Thu s, facially at least, it preserved the provision that “[n]otwithstanding anything herein to the contrary,” disputes are subject to arbitration. 260 Nonethele ss, the Plaintiffs argue that the amendments abrogated the arbitration obligations.

257 Zahler Aff. Ex. 24 ¶ 10(c); E akins Aff. Ex. 6 ¶ 10(c). 258 Zahler Aff. Ex. 24 ¶ 10(j); Eakins Aff. Ex. 6 ¶ 10(j). 259 Zahler Aff. Exs. 25, 26. 260 Zahler Aff. Ex. 24 ¶ 10(j); Eakins Aff. Ex. 6 ¶ 10(j).44 JJK Partners and LMazur Associates argue that the parties consented to the jurisdiction of Delaware only for claims and controversies “arising out of or related

to” the Ju ly 1, 2013 amendments . Per the Defendants, CelestialRX’s derivative

claim is for breach of restrictive covenants that were not c hanged by the
amendments, and are therefore subject to arbitration and not to the jurisdiction of

Delaware. In the Defendant s’ view, c laims arising from “[t]he Agreement, amended hereby ”

— that is, claims arising from the amendments

— are subject to the jurisdiction of Delaware. 261 The restrictive covenants at issue were unchanged by

—
and in fact, are not referred to in

— the amendments, and therefore a claim based on those restrictive covenants arises from the original consulting agreements and not
the amendments. As a result, per the Defendants, a claim for breach of those

restrictive covenants is subject to the arbitration clause in t he original consulting
agreements

. I find the Defendants’ argume nt colorable in this regard.

As the Plaintiff s point out , judges normally decide questions of arbitrability

. 262 Indeed, Delaware law “follows the general rule that ‘ courts should decide questi on s of substantive arbitrability.’” 263 An exception exists , however,

261 Zahler Aff. Exs. 25, 26. 262 Pls.’ Br. in Opp ’ n to the Krivulka Defs.’ Mot. for Part ial Summ. J. and Mot. to Dismiss , at 142 (“ The question of arbitrability is one for a Judge to decide. ”). 263 UPM

- Kymmene Corp. v. Renmatix, Inc. , 2017 WL 4461130, at *4 (Del. Ch. Oct. 6, 2017) (quoting James & Jackson, LLC v. Willie Gary, LLC , 906 A.2d 76, 7 8 (Del. 2006)).45 where “the parties clearly and unmistakably provide otherwise.” 264 As here, clear

and unmistakable evidence is present when an arbitration clause “generally provides

for arbitration of all disputes and also incorporates a set of arbitration rules that empower arbitrators to decide arbitrability.” 265 The arbitration clauses in the original consulting agreements, quoted above, generally provide for arbitration of all disputes and incorporate AA A rules. 266 As a result, questions of substantive arbitrability here should be decided by the arbitrator. Count IV, the claim for breach of restrictive
covenants, is therefore stayed pending the decision of the arbitrator as to arbitrability

.
B. Personal Juri sdiction O ver Mazur and LMazur Associates
Defendants Mazur and LMazur Associates moved to dismiss the claims brought against them under Rule 12(b)(2), lack of persona l jurisdiction. In a Rule 12(b)(2) motion to dismiss, “the plaintiff bears the burden of showing a basis for the court’s exercise of jurisdiction over the defendant.” 267 This Court uses a two

- step analysis when considering the exercise of personal jurisdiction over a nonresident defendant: first, the Court must determine if a statutory basis fo r personal

264 Willie Gary , 906 A.2d at 79 (quoting Howsam v. Dean Witter Reynolds, Inc. , 537 U.S. 79 , 83 (2002)). 265 Id. at 80 (internal citations omitted). 266 I need not consider the “additional step” in the Willie Gary analysis , as the arbitration clause in question contains no carve

- outs or ambiguity as to the disputes covered. See UPM

- Kymmene Corp. , 2017 WL 4461130, at *4 (discussing McLaughlin v. McCann , 942 A.2d 616 (Del. Ch. 2008)). 267 Ryan v. Gifford , 935 A.2d 258, 265 (Del. Ch. 2007 ).46 jurisdiction exists, and second, it must determine whether application of jurisdiction over the nonresident would violate “traditional due process notions of fair play and substantial justice.” 268 Where, as here, there has been no evidentiary hea ring, the plaintiff need only make a prima facie showing. 269 The Court “can consider affidavits, briefs of the parties, and the available results of discover y . Still, allegations regarding personal jurisdiction in a complaint are presumed true, unless

cont radicted by affidavit, and, as with a motion to dismiss under Rule 12(b)(6), the court must construe the record in the light most favorable to the plaintiff.” 270
The Plaintiffs argue that Mazur was a “ manager” of A krimax from January
11, 2008 to July 1, 2013 , such that he is subject to the personal jurisdiction of this
Court under 6 Del. C. § 18

- 109(a)(i). 271 The Plaintiffs further argue that after July 1, 2013, he participated materially in the management of Akrimax, such that he is subject to the personal ju risdiction of this Court under 6 Del. C. § 18

- 109(a)(ii). 272
The Plaintiffs argue that Mazur does business as LMazur Associates , and that jurisdiction over Mazur should extend to LMazur Associates , an un incorporated joint venture

. 273 Additionally, the Plaint iffs contend that LMazur Associates

268 Id. ; s ee also Hartsel v. Vanguard Gr p
. , Inc. , 2011 WL 2421003, at *6 (Del. Ch. June 15, 2011). 269 Hartsel , 2011 WL 2421003, at *7. 270 Id. 271 Pls.’ Br. in Opp ’ n to Defs. Olsen’s, Mazur’s, and LMazur’s Mots. to Dismiss and in Opp ’ n to the Mazur Defs.’ Mot. for Partial Summ. J., at 25. 272 Id. at 26. 273 Id. at 27.47 consented to the jurisdiction of Delaware Courts in the July 1, 2013 amendment to its consulting agreement with Akrimax. 274 Finally, the Plaintiffs propose that both

Mazur and LMazur Associates have waived the defense of lack of personal jurisdiction because they have not shown continuous intent to object to such jurisdiction. 275 I turn first to the issue of waiver, before addressing the personal jurisdiction defenses of Mazur and LMazur Associates

. 1. Waiver
The Plaintiffs ar gue that Defendants Mazur and LMazur Associates have

waived their right to raise a personal jurisdiction defense. According to Court of Chancery Rule 12(h), a defense of lack of personal jurisdiction is waived if not made in a timely Rule 12 motion or in the first responsive pleading. 276 “The purpose for this rule is to expedite litigation and encourage disputes to be resolved on their

merits.” 277 A ccordingly, a defendant’s challenge to personal jurisdiction should be brought at the time he makes his first d efensive move. 278 A defendant may waive or
abandon its defense of personal jurisdiction when the defendant becomes an “active

274 Id. 275 Id. at 28. 276 See Ct. of Ch. R

. § 12(h). 277 Tuckman v. Aerosonic Corp. , 394 A.2d 226, 232 (Del. Ch. Sept. 11, 1978) (citations omitted). 278 Ross Hldg. & Mgmt. Co. v. Advance Realty Grp. , LLC , 2010 WL 1838608, at *11 (Del. Ch. Apr. 28, 2010) (citing Hornberger Mgmt. Co. v. Haws & Tingle Gen. Contractors, Inc. , 768 A.2d 983, 987

– 88 (Del. Super. 2000) )

.48 actor” in the case. 279 In other words, the inquiry of waiver is “whether the defendant has abandoned a solely defensive posture and become an actor in th e ca u s e.” 280
However, “[t] he entry of a limited appearance by a defendant does not constitute a

waiver

. . . . ” 281 For example, seeking advancement before raising a defense of personal jurisdiction in a timely motion to dismiss is not a waiver of the defense. 282

The o riginal Complaint named Mazur as a defendant

— b ut not LMazur

Associates

— and was filed on November 20, 2015. Mazur first filed a Motion to

D ismiss, in part und er Rule 12(b)(2), four days later, on November 24 , 2015. 283

Mazur subs equently participated in the proceedings on the Plaintiffs’ Motion for a Temporary Restraining Order and the Plaintiff’s Application for Prelim inary Injunctive Relief. Mazur submitted himself to a deposition and responded to preliminary discovery. The Pl aintiffs contend that Mazur’s deposition and participation in discovery constitute a waiver of his personal jurisdiction defense.

LMazur Associates was not added as a party until the Plaintiffs filed their Amended Complaint on March 8, 2016. While the Pl aintiff s do not directly assert as much , they appear to suggest that LMazur Associates is effectively the same as Mazur a nd

279 Id. ; see also Conn. Gen. Life Ins. Co. v. Pinkas , 2011 WL 5222796, at *3 (Del. Ch. Oc t. 28, 2011). 280 Bigelow/Diversified Secondary P'ship Fund 1990 v. Damson/Birtcher Partners , 2001 WL 1641239, at *6 (Del. Ch. Dec. 4, 2001) (internal citations omitted). 281 Gans v. MDR Liquidating Corp. , 1990 WL 2851, at *4 (Del. Ch. Jan. 10, 1990). 282 See Co nn. Gen. Life Ins. Co. , 2011 WL 5222796, at *3. 283 D.I. 18.49 has therefore also waived its personal jurisdiction defense prior to being added as a
party

. 284

Mazur and LMazur Associates have not waived their right to raise a personal jurisdiction defense. Mazur asserted such a defense in his first M otion t o D ismiss the original complaint, only days after the C omplaint was filed. This Court has found that participation in preliminary discovery d oes not by itself constitute

waiver

— or, here, abandonment

— of a defense of personal jurisdiction. 285 To find otherwise in this case would controvert the purpose of the doctrine recognizing

waiver by active participants, and in fact would serve to slow litiga tion. LMazur

Associates was not added as party until the Amended Comp l aint was filed on March
8, 2016. The Plaintiffs do not argue that LMazur was involved in this litigation previously

. Mazur and LMazur Associates promptly asserted a personal jurisdic tion

defense in their Motion to Dismiss the Amended Complaint on March 22, 2016. 286
Nothing in the behavior of either Defendant comes close, in my mind, to a waiver of

the defense of lack of personal jurisdiction.

284 In its waiver section, t he Plaintiffs ’ Opposition Brief only mentions Mazur and does not mention LMazur , although the title to the section refers to “Mazur/LMazur.” See Pls.’ Br. in Opp ’ n to Defs. Olsen’s, Mazur’s, and LMazur’s Mots. to Dismiss and in Opp ’ n to the Mazur Defs.’ Mot. for Partial Summ. J., at 28. 285 See Ross Hldg. & Mgmt. Co. v. Advance Realty Grp. , LLC, 2010 WL 1838608, at *11 (Del. Ch. Apr. 28, 2010) 286 D.I. 137.50 2. Personal Jurisdiction over Defendant Mazur Under 6 Del. C. § 18

- 109 Under 6 Del. C. § 18

- 109, Delaware Limited Liability Company Act’ s implied

consent statute:

A manager . . . of a limited liability company may be served with process . . . in all civil actions or proceedings brought in the State o f Delaware involving or relating to the business of the limited liability company . . . , whether or not a manager . . . is a manager . . . at the time suit is commenced. A manager’s . . . serving as such constitutes such person’s consent to the appointme nt of the registered agent of the limited liability company . . . as such person’s agent upon whom service of process may be made . . . . Such service as a manager . . . shall signify the consent of such manager . . . that any process when so served shall be of the same legal force and validity as if served upon such manager . . . within the State of Delaware and such appointment of the registered agent . . . shall be irrevocable. 287 A “manager” refers “(i) to a person who is a manager as defined in § 18

- 101( 10) of this title and (ii) to a person, whether or not a member of a limited lia bility company, who, although not a manager as defined in § 18

- 101(10) of this title, participates materially in the management of the limited liability company .

. . .” 288

A “m anager , ” as defined by § 18

- 101(10) , is “a person who is named as a manager of a limited liability company in . . . a limited liability company agreement

. . . . ” 289
Therefore, if Mazur was included in the definition of “ma nager” in Akrimax’s

o perating agre ement or if he participated materially in the management of Akrimax,

287 6 De l. C. § 18

- 109(a). 288 Id. § 18

- 109(a)(i), (ii). 289 Id. § 18

- 101(10).51 then a statutory basis for jurisdiction over Mazur would exist, satisfying the first prong of the two

- step analysis. In terms of the second prong of the analysis, this Court has previousl y dealt with personal jurisdiction under 6 Del. C. § 18

- 109, and found that: Due process would not be offended if Plaintiffs can show that (1) the allegations against the defendant

- manager focus centrally on his rights, duties and obligations as a manager of a Delaware LLC; (2) the resolution of the matter is inextricably bound up in Delaware law; and (3) Delaware has a strong interest in providing a forum for the resolution of the dispute relating to the manager's ability to discharge his managerial functi ons. 290 I now apply this two

- prong test to Mazur.

a. Mazur Was A “Manager” of Akrimax B efore July 1, 2013 , But N ot A fter According to Akrimax’s Second Amended Operating Agreement, Akrimax’s “manager” was the “board of directors acting collectively. ” Mazur was specifically

nam ed as an initial member of the B oard in the Second Operating Agreement and served as a director until July 1, 2013. As a result, from January 11, 2008 to July 1,
2013, Mazur was a “manager , ” as defined by 6 Del. C. § 18

- 101(10) , and there b y impliedly consented to Delaware jurisdiction under § 18

- 109(a)(i) for actions “involving or relating to the business” of Akrimax. 291

290 Hartsel v. Vanguard Grp., Inc. , 2011 WL 2421003, at *9 (Del. Ch. June 15, 2011). 291 Cf. Fl a
. R & D Fund Inv’rs, LLC v. Fla. BOCA/Deerfield R & D Inv’rs, LLC , 2013 WL 4734834, at *7 ( Del. Ch. Aug. 30, 2013) (“ Therefore, under Section 18

– 109(a)(i), the [LLC] ’ s manager is the Board of Directors. Because [the defendant] is not listed in the LLC Agreement as52 Following Amendment No. 7 to the Second Amended Operating Agreement on July 1, 2013, Mazur was removed from Akrimax’s Board of Directors. The Plaintiffs allege that M azur retained the title of Vice Chairman, spoke often with

Krivulka abou t Akrimax, and engaged Jeffries to advise regarding sale of Akrimax’s

assets in 2015. 292 Mazur challenge s that this level of involvement rise s to the material participation in manag ement required to exert jurisdiction in § 18

- 109(a)(ii)

. Mazu r’s communication with Krivulka does not by itself rise to material participation. F or example, “ [t] here is a difference between material participation in managing a company and off ering comments via email to one’ s appointed Board representatives. ” 293 However, perform ing actions within the exclusive purview of a manager, such as making an application for dissolution, which by statute “must be

mad e by or fo r a member or manager, ” can qualify as material participation. 294 I n Phillips v. Hove , the defendant, by his own admission, took over day

- to

- day operations of the LLC, “effectively ran the business [,] . . . [and] later filed a

a member of the [LLC] ’ s Board of Directors, [the defendant] may not be considered a manager of the [LLC] for the purposes of either Section 18

– 109(a)(i) or Section 18

– 101(10). ”)

. 292 Pls.’ Br. in Opp ’ n to Defs. Olsen’s, Mazur’s, and LMazur’s Mots. to Dismiss and in Opp ’ n to the Mazur Defs.’ Mot. for Partial Summ. J., at 26. 293 Fi sk Ventures, LLC v. Segal , 2008 WL 1961156, at *7 (Del. Ch. May 7, 2008). 294 In re Mobilactive Media, LLC , 2013 WL 297950, at *30 (Del. Ch. Jan. 25, 2013).53 bankruptcy petition on [the L LC’s] behalf.” 295 The Court found that “through these acts, [the defendant] participated materially in the management of [the LLC].” 296
Performing the tasks of a manager, however, does not equate with “material participation” if that work is done “simply at t he direction of and as a representative”

of another. 297 Material participation in the management of an LLC requires “control
or [a] decision

- making role.” 298 For example , the f act that a defendant negotiates agreements on behalf of an LLC and arranges financ ing for t he LLC i s not sufficient to show material participation, when the defendant’s power is subject to the control

of another. 299 Here, Amendment No. 7 , in explicit terms , put Krivulka solely a t the helm of Akrimax on July 1 , 2013 . As Mazur points out, the Plaintiffs themselves

make the same argument in briefing , where they wri te that Amendment No. 7
“install[ed] Kri v u lka as emperor, supreme leader, and dictator for life” and that Krivulka “has absolute control and discretion without expressed limits.” 300 The

295 2011 WL 4404034, at *22 (Del. Ch. Sept. 22, 2011). 296 Id. 297 Vichi v. Koninklijke Philips Elecs. N.V. , 2009 WL 4345724, at *7 (Del. Ch. Dec. 1, 2009) (finding assertions that an individual defendant helped form the LLC and issue notes on its behalf did not qualify as material participation because those actions were taken as an employee of a d efendant entity, which was the sole member and manager of the LLC). 298 In Matter of Dissolution of Arctic Ease, LLC , 2016 WL 7174668, at *4 (Del. Ch. Dec. 9, 2016) (quoting Wakely Ltd. v. Ensotran, LLC , 2014 WL 1116968, at *5 (D. Del. Mar. 18, 2014)); see a lso Fl a
. R & D Fund Inv’rs, LLC v. Fl a
. BOCA/Deerfield R & D Inv’rs, LLC , 2013 WL 4734834, at *8 (Del. Ch. Aug. 30, 2013). 299 In Matter of Dissolution of Arctic Ease , L L C , 2016 WL 7174668, at *5. 300 Reply Br. in Support of the Mazur Defs.’ Mot. to Dis miss Pls.’ First Am. Verified Compl. and Mot. for Partial Summ. J., at 6 (quoting Pls.’ Br. in Opp ’ n to the Krivulka Defs.’ Mot. for Partial Summ. J. and Mot. to Dismiss, at 27, 123).54 Plaintiffs’ allegations that M azur retained his title as vice chairman and engaged a banker on behalf of Akrimax are not sufficient to suggest that Mazur materially participated in the management of Akrimax , when Krivulka alone had the authority

to m anage Akrimax and the Plaintiffs allege that Krivulka asserted this authority

. 301

N othing in those allegations suggests that Mazur acted outside of or usurped

Krivulka’s control

. As a result, Mazur was not a “manager , ” as defined by 6 Del. C.
§ 18

- 109(a)( ii) , after July 1, 2013, and statutory implied consent is absent following

that date

. b. Due Process Mazur agreed to act as a manager of Akrimax from January 11, 2008 to July
1, 2013 , with at least constructive notice of Section 18

- 109(a). The Plaintiffs’ cl aims against Mazur during that time period deal with his duties and obligations as a director and manager of Akrimax. Accordingly, Mazur’s due process rights are not offended by this Court’s assertion of jurisdiction over him ; 302 Mazur does not argue

otherw ise.

301 Here, I paraphrase Vice Chancellor Montgomer y
- Reeves in In Matter of Dissolution of Arctic Ease, LLC . 2016 WL 7174668, at *5 (“ Even taking all reasonable inferences in the Heck Parties ’ favor, these allegations are not sufficient to suggest that Cohen materially participated in management when Forden alone had the autho rity to manage Summetria. ”)

. 302 The Plaintiffs ’ claims against Mazur, at least in part, relate to the internal business of Akrimax, such as whether Mazur violated his fiduciary or contractual duties as a manager or otherwise breached the operating agreement.55 3. Personal Jurisdiction over LMazur Associates
Defendant LMazur Associates also moved to dismiss all claims against it for lack of personal jurisdiction under Rule 12(b)(2). The Plaintiffs , in response , argue that personal jurisdiction exists over LMaz ur Associates as an extension of Mazur, and through LMazur Associates’ cons ulting agreement with Akrimax. I have discussed the applicable legal standard for Rule 12(b)(2) above, and I therefore proceed directly to its application.

The Plaintiffs contend that personal jurisdiction exists over LMazur Associates as a result of its consulting agreement with Akrimax. I have discussed that agreement above and determined t hat the parties consented to jurisdiction in Delaware for claims arising from the amendme nt. However, other claims, such as

breach of the non

- compete covenants, are potentially subject to arbitration in New

York . The Plaintiffs ’ claims against LMazur Associates, as they relate to the consulting agreement, arise from breach es of the restricti ve covenants; these claims have been stayed pending a determination of arbitrability (and, indirectly, my jurisdiction) by the arbitrator. Therefore, the question of whether LMazur

Associates consent ed to personal jurisdiction in Delaware through the cons ulting agreement with Akrimax must likewise be stayed

. The Plaintiffs, however, seek to impose jurisdiction on an alternative ground.

Defendant LMazur Associates is an u nincorporated joint venture, managed by56 Mazur, who is a resident of New Jersey. 303 T he Plaintiffs (citing, I note, no authority) contend that if the Court has jurisdiction over Mazur, it has jurisdiction

over LMazur Associates

. The Plaintiffs have not plead sufficient facts to demonstrate that LMazur Associates is the alter ego of Mazur. S imply p leading that an entity has an association with an individual (Mazur) who is subject to jurisdiction

is insufficient to show that the entity is also subject to jurisdiction. Therefore, I find that this Court lacks personal jurisdiction over LMazur A ssociates on the grounds of

association with Mazur

. As such, I need not reach LMazur Associate’s arguments on service of process.

4. Process and Service of Process

Mazur also moved to dismiss the claims brought against him under Rule 12(b)(4), insufficiency of process, and Rule 12(b)(5), insufficiency of service of

process. These motions rest on the premise that Maz ur was not a manager of
Akrimax; as I have found that the Plaintiffs adequately pled that he was a manager
until July 1, 2013 , these motions are denied.

C. Personal Jurisdiction over Olsen and Related Service of Process
Defendant Olsen moved to dismiss the claims brought against him under Rule
12(b)(2) , lack of personal jurisdiction , and Rule 12(b)(5), insufficiency of service of

303 I note that it is not clear who owns LMazur Asso ciates, or where it is resident. A t Oral Argument, LMazur’s own counsel could only say “I don't believ e it was formed under any state ’ s law officially. ” Tr. of Oral Argument at 62:1

– 2.57 process. As with Def e ndant Mazur, the Plaintiffs allege that Olsen meets the definition of “manager” in 6 Del. C. § 18

- 109, the implied consent statute of the Delaware Limited Liability Company Act, and is therefore subject to this Court’s personal jurisdiction. As with the Mazur Defendants, the Plaintiffs argue that , in

any case , a personal jurisdiction defense has been waived. I turn first to the issue of

waiver.

1. Waiver
Olsen was added as a defendant in this action when the Plaintiffs filed their Amended Complain t on March 8, 2016 . Olsen filed a M otion to D ismiss on July 7,
2016, where he asserted a perso nal jurisdiction defense . Prior to being added as a party on March 8, 2016 , Olsen was deposed by the Plaintiffs in this action

. The

Plaintiffs contend that Olsen has the refore “been an interested party for quite some
time,” and that by not opposing his deposition , Olsen has waived his right to assert a personal jurisdiction defense. 304 This contention is contrary to our case law, 305 and

inimical to its rationale ; accordingly , I reject the Plaintiffs’ argument that Olsen has

waived his personal jurisdiction defense

.

304 Pls.’ Br. in Opp ’ n to Defs. Olsen’s, Mazur’s, and LMazur’s Mots. to Dismiss and in Opp ’ n to the Mazur Defs.’ Mot. for Partial Summ. J., at 23

– 24. 305 See, e.g. , Ross Hldg. & Mgmt. Co. v. Advance Realty Grp., LLC , 2010 WL 1838608, at *11 (Del. Ch. Apr. 28, 2010) (fin ding that participating in motion practice to disqualify plaintiff’s counsel and engaging in discovery are not enough to constitute active involvement such that a personal jurisdiction defense is waived ).58 2. Personal Jurisdiction Over Olsen U nder 6 Del. C. §18

- 109 Having found that Olsen did not waive his personal jurisdiction defense, I turn

to his Motion to Dismiss p ursuant to Rule 12(b)(2). As I have covered the legal
standard for Rule 12(b)(2) and its interaction with 6 Del. C. § 18

- 109 above, I will not repeat it and will instead proceed to apply the legal analysis to Olsen.

Olsen served as President and CEO of Ak rimax from July 2011 until October

2015. 306 According to the Plaint iffs, Olsen was hired to manage Akrimax’s sales and marketing, and as President and CEO of Akrimax, Olsen was further involved in product acquisition and the development of an annual busines s plan, and he “had the authority to write checks, approve wire transfers, execute promissory notes, and

bind Akrimax to contracts.” 307 The Plaintiffs also claim that Olsen was responsible

for “ repairing ” Akrimax’s relationship with Pfizer. 308 As such, per t he Plaintiffs, Olsen had a role in day

- to

- day operations. 309 Olsen contends that, even if true, all the cited activity does not support “material participation in the management” of Akrimax, such that Olsen would be a “manager” under 6 Del. C. § 18

- 109. In

addition , the Plaintiffs allege that in 2013 Olsen was involved first in denying

306 Am. Compl. ¶ 9; Opening Br. in Support of Def. Olsen’s Mot. to Dismiss the First Am. Verified Compl., at 2. 307 Pls.’ Br. in Opp ’ n to Defs. Olsen’s, Mazur’s, and LMazur’s Mots. to Dismiss and in Opp ’ n to the Mazur Defs.’ Mot. for Partial Summ. J., at 19. 308 Id. As previously de scribed, Akrimax’s Second Amended LLC Agreement specifically stated that officers of Akrimax are not managers. 309 Id. at 21.59 Laumas any financial information and then providing Laumas with misleading

information , 310 and that Olsen later executed the agreements between Cranford
Pharmaceutical, Holmdel Pharmaceuticals, and Akrimax. 311 Nonetheless (setting aside the waiver theory) the Plaintiffs assert no grounds for this Court’s jurisdiction over Olsen, except for Section 18

- 109, accordingly, I limit my analysis to that

statute. The Plaintiffs’ argument that Olsen materially participated in managing

Akrimax suffers f rom the same fatal flaw as the Plaintiffs’ argument that Mazur materially participated in managing Akrimax after July 1 , 2013. In short, the Plaintiffs fail to allege that Olsen had control o f , or had a decision making role , in

Akrimax . Viewing the record in the light most favorable to the Plaintiff, as I must,

I assume Olsen helped to run d ay

- to

- day operations, including managing the sales force, responding to information requests from direc tors , and executing agreements

that Akrimax had entered into with other entities. Olsen was an employee.
However, the Plaintiffs do not allege that Olsen performed his duties as President and CEO independ ently of the manager of Akrimax; 312 instead, the fac ts pled

310 Id. at 6. 311 Id. at 7

– 8. The Amended Complaint barely mentions Olsen’s role at Akrimax, aside from providing misl eading financial information to Laumas. However, the Plaintiffs have supplemented this account with information from preliminary discovery and affidavits. 312 Akrimax’s manager was the entire board before July 1, 2013, and solely Krivulka after that date.60 indicate that Olsen performed his duties subject to the control of the “emperor,”

Akrimax’s manager , Krivulka

. As previously mentioned in relation to Mazur’s Motion to Dismiss under Rule 12(b)(2), the Plaintiffs have repeatedly emphasized the com plete control of Krivulka

over Akrimax. The Plaintiffs allege that Olsen implemented the terms of agreements

that Krivulka caused Akrimax to enter into , such as Akrimax’s agreements with

Cranford Pharmaceuticals and Holmdel Pharmaceuticals

. T he fact that Olsen, the president and CEO of Akrimax, implement ed agreements that Akrimax had entered
into is not remarkable, n or is it a sign of control over those agreements. The

Plaintiffs also allege that Olsen at first refused to provide any financial informatio n
to Laumas and th en gave him information that the Plaintiffs contend was misleading.

H owever, the Plaintiffs themselves acknowledge that Olsen asked Krivulka how

Krivulka wanted Olsen to respond to Laumas’s requests , 313 and then acted accordingly.

Olsen was certainly an officer of Akrimax, and as an officer his

re sponsibilities were broad and included day

- to

- day operation s. Such participation
can be material; for example, in Phillips v. Hove , this Court found that a defendant who took over all day

- to

- da y operations and effectively ran the LLC at issue ,

313 Pls.’ Br. in Opp ’ n to Defs. Olsen’s, Mazur’s, and LMazur’s Mots. to Dismiss and in Opp ’ n to the Mazur Defs.’ Mot. for Partial Summ. J., at 5

- 6.61 including filing legal petitions on its behalf, had materially participated in the LLC’s
management. 314 Contra ry to Phillips , however, here the Plaintiffs have spec ifically pled the complete control of Akrimax by Kriv ulk a. I n Phillips , by contrast, there

was no manager in place when the defendant took and exercised control , and effectively became the manager. 315 T he Plaintiffs have failed to plead facts that, if

true, show that Olsen had the requisite control or a deci sion making role required to show material participation , or that Olsen ever attempted to t ake any action outside of the control of the manager. As a result, Olsen is not a manager as defined in 6
Del. C. § 18

- 109

. T he Plaintiffs have cited no other basi s for exercising personal jurisdiction over Olsen. Olsen’s Motion to Dismiss pursuant to Rule 12(b)(2) is granted. 316

D. The Remaining Rule 12(b)(6) Motions As described above, LMazur Associates and Olsen are dismissed from this

action for lack of personal ju risdiction . I have also stayed the claim for breach of restrictive covenants pending the decision of the arbitrator

. The remaining parties

also seek dismissal of all claims brought against them under Rule 12(b)(6). I issued

Celestial I on January 31, 20 17 , in whi ch I interpreted Akrimax’s LLC operating

a greement as of July 1, 2013 ; I note that the language eliminating fiduciary duties as

314 2011 WL 4404034 (Del. Ch. Sept. 22, 2011). 315 Id. at *22. 316 Accordingly, I need not reach Olsen’s ar gument on insufficiency of service of process.62 of July 1, 2013 appears materially unchanged from the Second Amended LLC Agreeme nt the parties entered into on January 11, 2008 . The pa rties subsequently

entered into mediation ; a fter mediation failed, in a January 3 1, 2018 scheduling

conference I asked the parties to submit letters detailing what M otions to D ismiss

remain ed pending and how Celestial I bears on the M otio ns to D ismiss. The responses I received lacked the specificity to be useful to me. Following these
efforts, Krivulka passed away, and the parties tried , but again failed , to resolve this action outside of litigation. The remaining parties shall, again i n lig ht of Celestial I and in light of this Memorandum Opinion, inform me w hat remains of the Motions

to D ismiss , specifically as to counts and parties

. 317

317 For instance, and as just noted, I found in Celestial I that , at least as of July 1, 2013, Akrimax’s LLC operating agreement “generally eliminates common

- law fiduciary duties except that it retains liability for intentional or illegal misconduct and other bad faith actions, as well as for improper self

- dealing. Those duties are contractual in nature . . . .” CelestialRX Inv s
. , LLC v. Krivulka , 2017 WL 416990, at * 16 (Del. Ch. Jan. 31, 2017). The Plaintiffs allege in the Amended Complaint that Cranford Pharmaceuticals and Holmdel Pharmaceuticals aided and abetted a breach of fiduciary duty . Am. Compl. ¶ 193. The Amended Complaint also contained a claim for bad faith breach of fiduciary duty brought “against Krivul ka and All Defendants ; ” however , the Plaintiffs now contend that they “do not assert a direct breach of fiduciary claim against Cranford Pharmaceuticals, LLC and Holmdel Pharmaceuticals, LP . . . .” See Am. Compl., at 54 (emphasis added); Pls.’ Br. in Opp ’ n to Cranford and Holmdel’s Mots. to Dismiss , at 11. Akrimax’s operating agreement, at least as of July 1, 2013, eliminated common law fiduciary duties and left only contractual fiduciary duties. And “Delaware law . . . ‘does not recognize a claim f or aiding and abetting a breach of contract.’” Wenske v. Blue Bell Creameries, Inc. , 2018 WL 3337531, at *17 (Del. Ch. July 6, 2018) (quoting Gerber v. EPE Holdings, LLC , 2013 WL 209658, at *11 (Del. Ch. Jan. 18, 2013)). In Wenske , for example, this Court, in the LPA context, found that the plaintiff failed to state a claim for aiding and abetting a breach of “contractual fiduciary duties” because the claim advanced “is, in substance, a claim for aiding and abetting a breach o f contract,” which is not recognized by Delawa re l aw. 2013 WL 209658, at *2, 17. It would be helpful to know if, and on what grounds, the Plaintiffs maintain that the aiding and abetting claims survive. Ditto , with respect to the other equitable claims asserted against entities other than Krivulka or his estate.63 III. C ONCLUSION

T he Plaintiffs’ claim s for breach of restrictive covenants are stayed pending

the arbitrato r’s decision on arbitrability. Furthermore, this Court lacks personal jurisdiction over LMazur Associates (pending the arbitrator’s decision) and Olsen. I reserve judgment on the balance of the Motions to Dismiss, as explained above.