COURT OF CHANCERY

OF THE 

STATE OF DELAWARE

 JOHN W. NOBLE 417 SOUTH STATE STREET

VICE CHANCELLOR DOVER, DELAWARE 19901

 TELEPHONE: (302) 739-4397

 FACSIMILE: (302) 739-6179

May 29, 2015

Bruce L. Silverstein, Esquire

Young Conaway Stargatt & Taylor, LLP

1000 North King Street

Wilmington, DE 19801

Re: Shocking Technologies, Inc. v. Michael

C.A. No. 7164-VCN

Date Submitted: February 17, 2015

Dear Mr. Silverstein:

I write to address Defendant Simon J. Michael’s (“Michael”) Motion for 

Vacatur, filed under Court of Chancery Rule 60(b).

1

 Michael, in essence, seeks the 

cancellation of the Court’s Memorandum Opinion of September 28, 2012, revised 

October 1, 2012 (the “Memorandum Opinion”), which concluded that he had 

breached his fiduciary duties as a director of Plaintiff Shocking Technologies, Inc. 

 

1 Rule 60(b) provides, in pertinent part:

On motion and upon such terms as are just, the Court may relieve a 

party . . . from a final judgment, order, or proceeding for the following 

reasons: . . . (5) . . . it is no longer equitable that the judgment should 

have prospective application; or (6) any other reasons justifying relief 

from the operation of the judgment.

EFiled: May 29 2015 03:50PM EDT 

Transaction ID 57311446

Case No. 7164-VCN
Shocking Technologies, Inc. v. Michael

C.A. No. 7164-VCN

May 29, 2015

Page 2

(“Shocking”).2 Despite Michael’s conduct, no liability, other than for routine court 

costs, was assessed because Shocking did not establish that his behavior had 

materially impacted a potential investor. Shocking has since been liquidated in 

bankruptcy. That bankruptcy effectively thwarted Michael’s desire to appeal. His

application is essentially about a matter of reputation. 

In the Memorandum Opinion, the Court asked counsel to submit a form of 

implementing order. That did not occur. Thus, there was nothing for Michael to 

appeal, and Shocking’s fiscal problems would have denied him the opportunity to 

appeal any judgment, even if one had been entered.

3

 The fact that judgment was 

not entered, as it would have been in the ordinary course, cannot be blamed on 

Michael. If judgment had been entered, he would have been able to appeal the 

imposition of costs.4

 

2

Shocking Techs., Inc. v. Michael, 2012 WL 4482838 (Del. Ch. Oct. 1, 2012). 

There is no opposition to the motion. See Letter of Bruce L. Silverstein, Esq., 

Feb. 17, 2015, Ex. B. Dismissal of the remaining claims against Michael is clearly 

appropriate. He has committed to dismiss his claims against former fellow 

Shocking directors.

3 Of course, Rule 60(b) is not limited to correcting judgments; the Court is 

authorized to relieve a party from “a final judgment, order, or proceeding.”

4 Whether that would have been an economically prudent decision is not for the 

Court to resolve.
Shocking Technologies, Inc. v. Michael

C.A. No. 7164-VCN

May 29, 2015

Page 3

However, the relief that Michael seeks is troubling. The Memorandum 

Opinion demonstrated how badly behaving directors can still be sanctioned in a 

public forum, even if the removal process contemplated by 8 Del. C. § 225(c) is 

not a readily viable option. Michael’s conduct understandably motivated three 

other Shocking directors to seek to have him removed from the board. Yet a 

court’s involvement in such efforts should be rare. Not only is board membership 

generally a matter for the stockholders, but the removal process set forth 

legislatively counsels caution and close adherence to proper procedures. That is an 

important lesson from this case, and one that might be lost if vacatur is granted. 

Nonetheless, the appellate process exists for many purposes, and, one must 

assume, Michael’s reputation is one of them, especially where he would have had 

the right to appeal if judgment had been entered as one would have anticipated.5 

Thus, this is a case where a party who has lost the opportunity to appeal, 

through no fault of his own, may properly seek vacatur. Michael operates an 

investment fund. Although he does not claim to have lost clients because of what 

happened in this action, he understandably is concerned about the potential 

 

5 Although Michael’s conduct may have interfered with Shocking’s efforts to raise 

needed financing, the Court has no factual basis for concluding that Michael’s 

post-opinion conduct had any effect on Shocking’s survival.
Shocking Technologies, Inc. v. Michael

C.A. No. 7164-VCN

May 29, 2015

Page 4

business risk of lingering reputational concerns, disclosure obligations, and 

liability insurance issues. Collateral ramifications, even if the direct relief at issue 

is not material, will support a motion under Rule 60(b)(5) & (6) in order to protect 

a party whose expectation of appellate review has been frustrated because of 

events not within his control.6 

Accordingly, the Memorandum Opinion will be vacated. Michael’s 

proposed implementing order will be entered.

Very truly yours,

/s/ John W. Noble

JWN/cap

cc: Kevin G. Abrams, Esquire

Daniel A. Dreisbach, Esquire

Paul D. Brown, Esquire

Register in Chancery-K

 

6

See, e.g., Stearn v. Koch, 628 A.2d 44, 46 (Del. 1993); see also Tyson Foods Inc. 

v. Aetos Corp., 818 A.2d 145, 148 (Del. 2003) (“This so-called ‘interests of justice’ 

standard is no doubt met where the party seeking appellate review is thwarted by 

some event beyond its control.”).