IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

HAROLD KRAFT as Trustee of the 

KRAFT FAMILY TRUST,

Plaintiff,

v.

WISDOMTREE INVESTMENTS, 

INC., a Delaware corporation,

Defendant,

and

TRADEWORX, INC., a Delaware 

corporation,

Nominal Defendant.

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C.A. No. 10816-CB

OPINION

Date Submitted: May 5, 2016

Date Decided: August 3, 2016

Stephen B. Brauerman, Vanessa R. Tiradentes and Sara E. Bussiere, BAYARD, 

P.A., Wilmington, Delaware; Attorneys for Plaintiff.

Martin S. Lessner and Lakshmi A. Muthu, YOUNG CONAWAY STARGATT & 

TAYLOR, LLP, Wilmington, Delaware; Jordan D. Hershman and Michael D. 

Blanchard, MORGAN, LEWIS & BOCKIUS LLP, Boston, Massachusetts; 

Christopher M. Wasil, MORGAN, LEWIS & BOCKIUS LLP, Hartford, 

Connecticut; Attorneys for Defendant.

Kurt M. Heyman, PROCTOR HEYMAN ENERIO LLP, Wilmington, Delaware; 

Michael F. Cockson, Adam M. Nodler and Brad W. Engelsma, FAEGRE BAKER 

DANIELS LLP, Minneapolis, Minnesota; Attorneys for Nominal Defendant.

BOUCHARD, C.
1

In this case, a stockholder of Tradeworx, Inc. seeks a declaration that shares 

issued to WisdomTree Investments, Inc. in 2000 are invalid because they were 

issued in exchange for services to be provided in the future, which was disallowed 

at the time under certain provisions of the Delaware General Corporation Law and 

the Delaware Constitution. Those provisions have since been amended to permit 

shares to be issued for that form of consideration.

WisdomTree has moved to dismiss the complaint. Its primary argument is 

that plaintiff’s claim, which was filed almost fifteen years after the challenged 

share issuance, is time-barred. More specifically, WisdomTree argues that 

plaintiff’s claim for declaratory relief should be dismissed based on a strict 

application of the three-year statute of limitations governing actions “based on a 

statute” (10 Del. C. § 8106) or, in the alternative, based on the doctrine of laches 

by applying this limitations period by analogy.

These seemingly routine questions are not so easily answered. As discussed 

below, the mixture of equitable and legal matters falling within the subject matter 

jurisdiction of the Court of Chancery complicates its application of time-bar 

principles that originated in equity (laches) and at law (statutes of limitations). In 

this opinion, after reviewing the case law in this area to provide a framework for 

analysis, I conclude that plaintiff’s claim is barred under the doctrine of laches by 

applying the statute of limitations by analogy.
2

I. BACKGROUND

Unless noted otherwise, the facts recited in this opinion are based on the 

allegations of the Verified Complaint for Declaratory Judgment filed on March 20, 

2015. 

A. The Parties

Plaintiff Harold Kraft serves as trustee of the Kraft Family Trust dated 

March 30, 2000, and brings this action in that capacity. The Kraft Family Trust 

owns approximately 59,055 shares of Series D Convertible Preferred Stock and 

1,180,000 shares of Series X Convertible Preferred Stock of Tradeworx, Inc. 

(“Tradeworx”). For simplicity, this opinion refers to Mr. Kraft, as trustee, and the 

Kraft Family Trust together as “Kraft.” Tradeworx, which is named as a nominal 

defendant, is a Delaware corporation headquartered in New Jersey.

Defendant WisdomTree Investments, Inc. (“WisdomTree”), formerly known 

as Individual Investor Group, Inc., is a Delaware corporation headquartered in 

New York. For simplicity, this opinion refers to defendant at all times as 

“WisdomTree” despite its previous name. 

B. WisdomTree’s and Kraft’s Investments in Tradeworx

On May 4, 2000, WisdomTree and Tradeworx entered into a Stock Purchase 

Agreement under which WisdomTree received 1,045,000 shares of Tradeworx 

common stock in exchange for WisdomTree’s agreement to provide certain print 
3

and online advertising services to Tradeworx over the following eight quarters, 

valued at $1.8 million. These shares are evidenced by a stock certificate dated 

May 4, 2000. Shortly after entering into the Stock Purchase Agreement, 

WisdomTree publicly disclosed that it was suffering financial problems and sold or 

discontinued certain print magazines in which it had agreed to provide advertising 

for Tradeworx. 

In 2013, WisdomTree made a demand to inspect the books and records of 

Tradeworx and asserted that it had been conferred additional Tradeworx shares 

through an anti-dilution provision in the Stock Purchase Agreement. The parties 

were unable to agree on WisdomTree’s ownership interest in Tradeworx. The antidilution provision and any shares that may have been issued under it are not at 

issue in this case.

Kraft was not a stockholder in Tradeworx when WisdomTree and 

Tradeworx entered the Stock Purchase Agreement in May 2000. Kraft acquired its

Tradeworx stock in November 2000 and January 2003.1 The complaint alleges 

that “until recently” Kraft “was not aware that Tradeworx and WisdomTree 

executed the Stock Purchase Agreement, and was not aware that WisdomTree 

claimed to own a substantial majority of Tradeworx stock.”2 The complaint does 

 

1 Compl. ¶ 19.

2 Compl. ¶ 20. 
4

not specifically allege, however, that Kraft was unaware of WisdomTree’s original 

share ownership when Kraft made its initial investments in Tradeworx, and the 

record otherwise provides no indication one way or the other. 

C. Procedural Posture

On March 20, 2015, Kraft filed this action against WisdomTree. The sole 

relief sought is a request for a declaratory judgment that the Tradeworx shares 

WisdomTree acquired through the Stock Purchase Agreement are void because 

they were issued in exchange for future services, a practice that was prohibited at 

the time under Article 9, Section 3 of the Delaware Constitution and Section 152 of 

the Delaware General Corporation Law (the “DGCL”).

3

 Although Kraft names 

Tradeworx as a nominal defendant, it brings its claim directly rather than 

derivatively.

On April 14, 2015, WisdomTree filed a motion to dismiss the complaint 

under Court of Chancery Rule 12(b)(6) for failure to state a claim for relief. On 

 

3 Compl. ¶ 26. In 2000, Article 9, Section 3 of the Delaware Constitution stated: “No 

corporation shall issue stock, except for money paid, labor done or personal property, or 

real estate or leases thereof actually acquired by such corporation.” Del. Const. art. 9, § 3

(repealed 2004). Similarly, in 2000, Section 152 of the DGCL provided that 

consideration for the issuance of stock must be “in the form of cash, services rendered, 

personal property, real property, leases of real property or a combination thereof.” 8 Del. 

C. § 152 (amended 2004). Today, Section 152 provides, in relevant part, as follows: 

“The consideration . . . for subscriptions to, or the purchase of, the capital stock to be 

issued by a corporation shall be paid in such form and in such manner as the board of 

directors shall determine. The board of directors may authorize capital stock to be issued 

for consideration consisting of cash, any tangible or intangible property or any benefit to 

the corporation, or any combination thereof.” 
5

April 15, 2015, nominal defendant Tradeworx filed an answer submitting itself to 

the jurisdiction of the Court of Chancery but providing no other response to the 

complaint. After the completion of briefing, oral argument on WisdomTree’s 

motion to dismiss was heard on December 15, 2015.

On February 11, 2016, Tradeworx filed a motion for leave to amend its 

answer by adding a cross-claim against WisdomTree. The proposed cross-claim 

seeks a declaratory judgment that the shares Tradeworx purported to issue to 

WisdomTree are either void or voidable. Argument on Tradeworx’s motion for 

leave to amend was heard on May 5, 2016.

II. LEGAL ANALYSIS

A. Legal Standard

When considering a motion to dismiss under Court of Chancery Rule 

12(b)(6), the Court will “accept all well-pleaded factual allegations in the 

Complaint as true” and “deny the motion unless the plaintiff could not recover 

under any reasonably conceivable set of circumstances susceptible of proof.”4 

Under Court of Chancery Rule 15(a), leave to amend a complaint “shall be 

freely given when justice so requires.”5 “A court will not grant a motion to amend, 

 

4 Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Hldgs. LLC, 27 A.3d 531, 536 (Del. 

2011).

5 Ct. Ch. R. 15(a).
6

however, if the amendment would be futile. An amendment is futile if it would not 

survive a motion to dismiss under Court of Chancery Rule 12(b)(6).”6 

B. The Parties’ Contentions

WisdomTree advances two primary lines of argument in support of its 

motion to dismiss: (1) that the complaint is time-barred because it was filed almost 

fifteen years after WisdomTree acquired its shares of Tradeworx, and (2) that 

WisdomTree’s provision of advertising space to Tradeworx was a valid form of 

consideration for the issuance of stock under Article 9, Section 3 of the Delaware 

Constitution and Section 152 of the DGCL as those provisions existed in 2000

because the advertising space constituted “property” and was not a promise to 

perform “future services.” Because the first issue is dispositive, I do not reach the 

second issue.7

With respect to the first issue, WisdomTree argues that the complaint is 

time-barred based on a strict application of a statute of limitations on the theory 

that Kraft’s claim for declaratory relief based upon the interpretation of a statute 

(DGCL § 152) and an analogous constitutional provision is a purely legal claim. 

Alternatively, Wisdom Tree argues that even if Kraft sought an equitable remedy, 

 

6 Cartanza v. LeBeau, 2006 WL 903541, at *2 (Del. Ch. Mar. 28, 2006, as revised, Apr. 

3, 2006).

7

I also do not reach the question whether Kraft’s claim is derivative, which was first 

raised in WisdomTree’s reply brief.
7

the statute of limitations would apply by analogy and bar the claim; and even if the 

statute of limitations did not apply at all, the complaint would be barred by laches. 

The application of statutes of limitations in the Court of Chancery to address 

time-bar defenses has been the source of some confusion. Before analyzing

WisdomTree’s time-bar arguments and how they implicate the relevant statute of 

limitations (10 Del. C. § 8601), I review the case law in this area to clarify the 

framework for my analysis.

C. The Framework for Analyzing Whether a Claim Is Time-Barred

The Court of Chancery is a court of limited subject matter jurisdiction. It 

can acquire subject matter jurisdiction in the first instance by three different 

means: “(1) the invocation of an equitable right; (2) a request for an equitable 

remedy when there is no adequate remedy at law; or (3) a statutory delegation of 

subject matter jurisdiction.”8 A prime example of the third source of jurisdictional 

authority is 8 Del. C. § 111, which provides the Court of Chancery with 

nonexclusive jurisdiction to interpret, apply, enforce or determine the validity of 

certificates of incorporation, bylaws, stock instruments, and other corporate 

instruments.9 This provision gives the Court of Chancery jurisdiction over some 

 

8 Duff v. Innovative Discovery LLC, 2012 WL 6096586, at *4 (Del. Ch. Dec. 7, 2012).

9

8 Del. C. § 111(b) (“Any civil action to interpret, apply or enforce any provision of this 

title may be brought in the Court of Chancery.”).
8

subject matter that is not inherently equitable to take advantage of the Court’s 

special corporate expertise.10 Another example is 8 Del. C. § 145(k), which vests 

the Court of Chancery with exclusive jurisdiction to hear and determine 

advancement and indemnification claims that previously were brought in the 

Superior Court.11

The Court of Chancery also can obtain subject matter jurisdiction over 

purely legal claims through its clean-up doctrine. That doctrine, also known as 

ancillary jurisdiction, provides the Court of Chancery with jurisdiction to resolve 

purely legal causes of action that are before it as part of the same controversy over 

 

10 Donald J. Wolfe, Jr. & Michael A. Pittenger, Corporate and Commercial Practice in 

the Delaware Court of Chancery § 2.02[d], at 2-18 (2014) (hereinafter Corporate and 

Commercial Practice) (“The premise for the sweeping provision is plainly related more 

to Chancery’s special corporate expertise than to traditional notions as to the appropriate 

scope of equitable subject matter jurisdiction.”); see also Pot-Nets Coveside Homeowners 

Ass’n v. Tunnell Cos., L.P., 2015 WL 3430089, at *3 (Del. Super. May 26, 2015) 

(“Possibly the most prominent example [of legislative alterations to jurisdiction] lies in 

the Court of Chancery’s jurisdiction over the Delaware General Corporation Law, which, 

though encountering several potential equity-based issues, is statutory in nature, and 

therefore would ordinarily fall within the court of law’s jurisdiction.”).

11 69 Del. Laws, c. 261 § 2 (June 27, 1994) (adding Section 145(k) to DGCL); see also 

Perconti v. Thornton Oil Corp., 2002 WL 982419, at *4 n.24 (Del. Ch. May 3, 2002) 

(“Until enactment of Section 145(k) in 1994, the Superior Court was frequently the 

appropriate forum for an officer seeking reimbursement by virtue of his right to 

indemnification because, by that point, his claim was for a liquidated sum and, thus, 

remediable at law.”). 
9

which the Court originally had subject matter jurisdiction in order to avoid 

piecemeal litigation.

12

 

Laches is an equitable doctrine “rooted in the maxim that equity aids the 

vigilant, not those who slumber on their rights.”13 A finding of laches generally 

requires the presence of three factors: the claimant’s knowledge of the claim, 

unreasonable delay in bringing the claim, and resulting prejudice to the 

defendant.14 A party guilty of laches will be prevented from enforcing a claim in 

equity.15 As discussed below, a presumption of laches arises in certain contexts 

when a plaintiff brings a claim outside of a relevant statute of limitations period. 

Statutes of limitations exist at law and serve to bar claims brought after the 

limitations period set forth in the statute has expired. Statutes of limitations 

traditionally do not apply directly to actions in equity, although courts of equity 

 

12 See Corporate and Commercial Practice § 2.04 at 2-78 to 2-80 (“[T]he Court of 

Chancery’s authority to decide the entire controversy before it, including matters that 

otherwise would not be part of the Court’s jurisdiction if standing alone, generally serves 

to avoid piecemeal litigation . . . .”).

13 Whittington v. Dragon Gp., L.L.C., 991 A.2d 1, 8 (Del. 2009); see also Lehman Bros. 

Hldgs. Inc. v. Spanish Broad. Sys., Inc., 2014 WL 718430, at *7 & n.43 (Del. Ch. Feb. 

25, 2014) (noting that the maxim is a special form of the general principle that “he who 

seeks equity must do equity”), aff’d, 105 A.3d 989 (Del. 2014) (TABLE).

14 Whittington, 991 A.2d at 8.

15 Gen. Video Corp. v. Kertesz, 2008 WL 5247120, at *30 (Del. Ch. Dec. 17, 2008).
10

may apply them by analogy in determining whether a plaintiff should be timebarred under the equitable doctrine of laches. 

The mixture of equitable and legal matters falling within the jurisdiction of 

the Court of Chancery complicates its application of time-bar principles that 

originated in equity and at law. The role of statutes of limitations in suits brought 

in the Court of Chancery historically depended on the type of claim and type of 

relief a plaintiff seeks. In an effort to provide clarity on this topic, I discuss below 

three different contexts implicating statutory limitations periods. I consider first 

the Court’s approach to purely legal matters brought in Chancery, then the 

treatment of purely equitable matters, followed by cases in which the claim and the 

requested relief constitute some combination of legal and equitable subject matter.

1. Legal Claims Seeking Legal Relief

Legal claims seeking legal relief—for instance, a breach of contract claim 

requesting money damages—ordinarily would fall outside the jurisdiction of this 

Court. But other sources, such as the equitable cleanup doctrine or DGCL § 111, 

sometimes provide this Court with jurisdiction over such claims. In such a case,

would the statute of limitations apply strictly because the suit is purely legal in 

nature, or would it only apply by analogy to the equitable doctrine of laches

because the claim is brought in the Court of Chancery? 
11

Our case law does not offer a clear answer. Some cases suggest that a legal 

claim seeking only legal relief is subject to the statute of limitations, even if it is 

brought in the Court of Chancery.

16

 Indemnification and advancement cases that 

are contractual in nature but statutorily subject to this Court’s jurisdiction17are 

notable examples. In Cochran v. Stifel Financial Corporation, then-Vice 

Chancellor Strine considered which statute of limitations to apply to an 

indemnification claim, but appeared to apply the statute of limitations analysis 

strictly rather than by analogy, and made no mention of laches.18 The Supreme 

 

16 See, e.g., Stifel Fin. Corp. v. Cochran, 809 A.2d 555, 559 (Del. 2002) (holding that 

indemnification claims brought in Court of Chancery are contractual rights subject to the 

statute of limitations defined in 10 Del. C. § 8106); Scharf v. Edgcomb Corp., 2004 WL 

718923, at *6 n.18 (Del. Ch. Mar. 24, 2004) (noting that Stifel foreclosed the argument 

that delay in filing indemnification claim should be judged under laches instead of statute 

of limitations), rev’d on other grounds, 864 A.2d 909 (Del. 2004); Stevanov v. O’Connor, 

2009 WL 1059640, at *7 (Del. Ch. Apr. 21, 2009) (comparing laches for equitable 

claims, statutes of limitations for ancillary legal claims, and analogous statutes of 

limitations for concurrent jurisdiction equitable claims) (“When exercising ancillary 

jurisdiction over legal claims, however, this Court will apply the applicable statute of 

limitations found at law.”); Corporate and Commercial Practice § 11.06[c] at 11-73 

(2014) (“Moreover, the Court of Chancery may apply a statute of limitations in 

connection with purely legal claims that are before the Court under its ancillary 

jurisdiction.”). 

17 8 Del. C. § 145(k) (“The Court of Chancery is hereby vested with exclusive 

jurisdiction to hear and determine all actions for advancement of expenses or 

indemnification brought under this section . . . .”).

18 Cochran v. Stifel Fin. Corp., 2000 WL 286722, at *5, *9 (Del. Ch. Mar. 8, 2000), aff’d 

in part, rev’d in part on other grounds, 809 A.2d 555 (Del. 2002).
12

Court agreed, noting that “because indemnification is essentially a contractual 

right, the three year statute of limitations is applicable to indemnification claims.”19 

This Court’s decision in Lehman Brothers supports this proposition from a 

different angle.20 In that case, which fell within the Court’s subject matter 

jurisdiction under DGCL § 111,21 the Court distinguished between legal and 

equitable relief, noting that “a limitations period analogous to the statute of 

limitations will presumptively bar equitable relief, and conclusively bar legal 

relief.”22 The Court refused to apply the doctrine of laches to bar the claim of a 

plaintiff who had filed a breach of contract claim for damages within the statutory 

limitations period, but arguably had delayed unreasonably nonetheless. The Court 

noted that the equitable maxim “he who seeks equity must do equity” does not 

apply to plaintiffs seeking purely legal relief and thus that “a plaintiff who 

unreasonably delays will not be barred from seeking legal relief if the action is 

brought within the analogous limitations period.”23 

 

19 Stifel, 809 A.2d at 559 (citing Scharf v. Edgcomb Corp., 1997 WL 762656, *5 (Del. 

Ch. 1997)).

20 Lehman Bros., 2014 WL 718430 (Del. Ch. Feb. 25, 2014), aff’d, 105 A.3d 989 (Del. 

2014) (TABLE).

21 Id. at *7 n.46.

22 Id. at *7.

23 Id. at *7-8.
13

The Court in Lehman Brothers found this result was intuitive because “it 

would make little sense for a plaintiff in the Court of Chancery, under the clean-up 

doctrine, or, as here, by statute, to be placed in a worse position than if she had 

filed in a Delaware court of law where laches would not bar suit.”24 This concept 

is equally sensible in the reverse: a plaintiff vindicating a purely legal action in the 

Court of Chancery as a result of ancillary jurisdiction or some other jurisdictional 

source should not be placed in a potentially better position to seek to avoid a 

statute of limitations than if she had filed in a Delaware court of law by invoking 

the more flexible doctrine of laches.

This view has not been universally held. For instance, in O’Brien v. 

IAC/Interactive Corporation, this Court declined to apply the statute of limitations 

inflexibly to an indemnification claim despite its contractual nature.25 In doing so, 

 

24 Id. at *7. In its order affirming Lehman Brothers, the Supreme Court expressly 

declined to take a view on the question whether the doctrine of laches should have 

applied. Lehman Bros. Hldgs. Inc. v. Spanish Broad. Sys., Inc., 2014 WL 7010807, at *1 

(Del. Dec. 11, 2014) (ORDER) (“In so affirming, however, we do not imply any 

agreement or disagreement with the Court of Chancery’s determination that the doctrine 

of laches itself did not bar Lehman from proceeding.”).

25 O’Brien v. IAC/Interactive Corp., 2009 WL 2490845, at *7-9 (Del. Ch. Aug. 14, 

2009), aff’d, 26 A.3d 174 (Del. 2011); see also Acierno v. Goldstein, 2005 WL 3111993, 

at *5 (Del. Ch. Nov. 16, 2005) (noting that for a “purely legal claim” brought under the 

Court’s ancillary jurisdiction that fell outside of the statutory limitation period, the 

claimants should not benefit from a full-fledged laches inquiry, but nonetheless opining 

that they may still attempt to “bear the burden of proving that imposition of the legal 

limitations period would be unjust in the circumstances of this case” rather than be 

conclusively barred).
14

the Court noted defendant’s argument that the indemnification action was a legal 

right seeking a legal remedy but declined to classify the claim either way, instead 

concluding that the Court’s exclusive jurisdiction to hear indemnification actions 

demonstrated a legislative intent to have them decided by a court of equity, and 

that the claims were therefore “more appropriately examined under the doctrine of 

laches, which guides this Court’s determinations of timeliness and serves the 

independent purposes of equity.”26 The Court did not invoke tolling, instead using 

a laches analysis.

27

 

In affirming the decision, the Supreme Court in IAC did not address whether 

the action was inherently legal, due to its contractual nature, or equitable, due to 

the legislature’s decision to give the Court of Chancery exclusive jurisdiction over 

such claims. Instead, the Supreme Court found that “the trial court’s deviation 

 

26 O’Brien, 2009 WL 2490845, at *7 n.39. If the Court of Chancery’s postulation is 

correct that indemnification claims should be treated as claims in equity because the 

Court of Chancery has exclusive jurisdiction to hear them, then its holding arguably 

would not contradict the theory that purely legal claims should be strictly subject to 

statutes of limitations. Rather, the rationale for not applying the statute of limitations 

strictly in that circumstance would be that the legislature determined, in essence, to 

convert indemnification claims into equitable actions by placing “exclusive jurisdiction” 

for such claims in the Court of Chancery when it enacted 8 Del. C. 145(k). This theory, 

however, has not been universally embraced. See Yuen v. Gemstar-TV Guide Int’l, Inc., 

2004 WL 1517133, at *3 (Del. Ch. June 30, 2004) (“This court’s statutory authority 

under 8 Del. C. § 145(k) to make determinations regarding advancement does not turn an 

advancement claim into a claim for equitable relief.”).

27 See O’Brien, 2009 WL 2490845, at *8 (“Although statutes of limitations that are 

exceeded always operate to bar actions at law absent applicability of a tolling doctrine, 

they are not controlling in equity.”).
15

from the applicable statute of limitations in applying the doctrine of laches” was 

warranted by the “unusual circumstances presented.”28 The Supreme Court noted 

that “[t]here is no precise definition of what constitutes unusual conditions or 

extraordinary circumstances” but identified several factors “that could bear on the 

analysis” including: 

1) whether the plaintiff had been pursuing his claim, through litigation 

or otherwise, before the statute of limitations expired; 2) whether the 

delay in filing suit was attributable to a material and unforeseeable 

change in the parties’ personal or financial circumstances; 3) whether 

the delay in filing suit was attributable to a legal determination in 

another jurisdiction; 4) the extent to which the defendant was aware 

of, or participated in, any prior proceedings; and 5) whether, at the 

time this litigation was filed, there was a bona fide dispute as to the 

validity of the claim.29

In Levey v. Brownstone Asset Management, the Supreme Court applied its 

decision in IAC outside the context of an indemnification claim to hold that the 

statute of limitations did not bar a plaintiff’s claim for entitlement to cash 

distributions based on his alleged ownership interest in two entities.30 The 

Supreme Court did not analyze whether the statute of limitations should be applied 

strictly, but instead assessed whether to apply the statute by analogy and declined 

to do so. Citing IAC as “controlling authority,” the Supreme Court noted the 

 

28 IAC/Interactive Corp. v. O’Brien, 26 A.3d 174, 175-76 (Del. 2011).

29 See id. at 178.

30 See Levey v. Brownstone Asset Mgmt., LP, 76 A.3d 764, 767-68, 770-72 (Del. 2013).
16

presence of four of the five “unusual conditions and extraordinary circumstances” 

it had identified in IAC that justified deviating from the limitations period and 

avoiding a finding of laches.31 

In sum, tension seems to exist between Stifel and certain Court of Chancery 

cases on the one hand, and IAC and Levey on the other, as to whether statutes of 

limitations are to be applied strictly to purely legal claims. There is, in my view, 

logical force for strictly applying statutes of limitations in this situation because a 

plaintiff pressing a purely legal claim in the Court of Chancery should not be able 

to avoid the statute of limitations by invoking the doctrine of laches when the 

limitations period would have conclusively barred the same claim had it been 

brought in a court of law. Nonetheless, as the Supreme Court’s precedents in 

Stifel, IAC, and Levey reflect, there is not currently a clear answer on this issue and, 

in certain circumstances yet to be fully defined, the Supreme Court has left open 

the possibility of avoiding a strict application of a statute of limitations to a purely 

legal claim where “unusual conditions and extraordinary circumstances” exist,

such as those identified in IAC.

 

31 Id. at 770-72. The Supreme Court also held in the alternative that the statute of 

limitations was tolled in any case. Id. at 772-73.
17

2. Equitable Claims Seeking Equitable Relief

The next context to consider concerns equitable claims seeking equitable 

remedies—for instance, a request for an injunction based on a breach of fiduciary 

duty. Statutes of limitations do not strictly bind the Court of Chancery when it 

addresses such purely equitable matters, because “actions in equity are time-barred 

only by the equitable doctrine of laches.”32 In such cases, however, this Court will 

still look to comparable statutes of limitations at law, and give the analogous 

limitations period “great weight in deciding whether the claims are barred by 

laches.”33 Sometimes, the application of a limitations period to an equitable claim 

 

32 Whittington, 991 A.2d at 9 (internal quotation marks omitted). 

33 Id. How much weight should be afforded the statute of limitations has varied, but 

changes in the Court’s language suggest that it has increased over time. At this point, 

some view it as a presumption rebuttable only by tolling exceptions that also would apply 

at law. This was not always the case. Consider the following sequence of cases, listed in 

reverse chronological order: In re Sirius XM S’holder Litig., 2013 WL 5411268, at *4 

(Del. Ch. Sept. 27, 2013) (addressing primarily equitable remedies for an equitable 

fiduciary duty claim) (“[A] plaintiff in equity cannot file beyond the statute of limitations 

unless a tolling doctrine exists that would justify an equally late filing in a court of law.);

Vredenburgh v. Jones, 349 A.2d 22, 36 (Del. Ch. 1975) (giving “considerable weight” to 

the limitations period in the absence of special mitigating circumstances); Bay 

Newfoundland Co. v. Wilson & Co., 4 A.2d 668, 671 (Del. Ch. 1939) (“In the absence of 

some special circumstances, in determining whether the complainant’s rights have been 

lost by laches, a Court of Equity will, perhaps, usually follow the analogy of the Statute 

of Limitations governing somewhat similar rights in a Court of Law; but whether that 

rule will be applied necessarily depends on the facts of the particular case.”) (citations 

omitted); Wright v. Scotton, 121 A. 69, 73 (Del. 1923) (“Under ordinary circumstances, a 

suit in equity . . . will be stayed after[] the time fixed by the analogous statute of 

limitations at law; but, if unusual conditions or extraordinary circumstances make it 

inequitable to . . . forbid its maintenance after a longer period than that fixed by the 

statute, the Chancellor will not be bound by the statute, but will determine the 

extraordinary case in accordance with the equities which condition it.”) (quoting 4 
18

is explicitly attributed to the “unreasonable delay” element of laches.34 The Court 

also may presume prejudice if the claim is brought after the analogous limitations 

period has expired.35 Where no analogous limitations period exists, “the legal 

statute of limitations cannot apply by analogy,” and instead the Court relies 

entirely on the traditional principles of laches.36 In short, in purely equitable 

actions, the Court will afford significant weight to an analogous statute of 

limitations when one exists and will presumptively bar an action filed after the 

 

Pomeroy on Equity Jurisprudence 1441); Perkins v. Cartmell, 4 Del. 270, 270 (Del. 

1845) (“[Statutes of limitations] do not in terms extend to courts of equity, but these 

courts approve of the principle, and apply it to analogous cases.”).

Other jurisdictions also have grappled with the question of how much force an analogous 

statute of limitations should have. See Dan B. Dobbs, Law of Remedies § 2.4(4), at 78 

(2d ed. 1993) (“When courts look to an analogous statute of limitations for guidance, and 

that statute has run, they may (1) presume unreasonable delay and prejudice, but permit 

the plaintiff to rebut the presumption; (2) treat the statute as one element ‘in the congeries 

of factors to be considered.’ Some authority has gone beyond either of these rules by 

holding that equity will follow the law and (3) give the statute conclusive effect.”).

34 See, e.g., Osborn v. Kemp, 991 A.2d 1153, 1162 (Del. 2010) (“While the doctrine of 

laches does not prescribe a specific time bar to determine reasonableness, we traditionally 

have taken into account the legal statute of limitations when assessing whether the party 

unreasonably delayed bringing suit.”); Whittington v. Dragon Gp. L.L.C., 2010 WL 

692584, at *6 (Del. Ch. Feb. 15, 2010), aff’d and remanded on other grounds, 998 A.2d 

852 (Del. 2010) (TABLE).

35 See In re Sirius, 2013 WL 5411268, at *4 (“After the statute of limitations has run, 

defendants are entitled to repose and are exposed to prejudice as a matter of law by a suit 

by a late-filing plaintiff who had a fair opportunity to file within the limitations period.”).

36 See Kirby v. Kirby, 1989 WL 111213, at *5 (Del. Ch. Sept. 26, 1989).
19

limitations period, absent tolling or unusual circumstances that would make it 

inequitable to do so.

3. Matters Involving Legal and Equitable Elements

The final context to consider involves some combination of legal and 

equitable elements. A suit may consist of a legal claim seeking equitable relief—

for instance, a breach of contract claim demanding specific performance. Or a 

claim may sound in equity but request legal relief—a breach of fiduciary duty 

action seeking monetary damages. Although it was not always the case, both of 

these categories now generally require application of the statute of limitations by 

analogy. This change appears to be the result of a weakening definition of the 

Court’s concurrent jurisdiction over time.

Kahn v. Seaboard explains the Court of Chancery’s shifting definition of 

concurrent jurisdiction and its approach to applying the statute of limitations to 

such cases. In Kahn, Chancellor Allen noted that in the Court’s early 

jurisprudence, it would determine whether to apply an analogous statute of 

limitations by looking to the plaintiff’s claim, as opposed to the requested 

remedy.37 When a plaintiff requested an equitable remedy for a claim that was 

legal in nature, the action would fall within the Court’s concurrent jurisdiction, and 

 

37 Kahn v. Seaboard Corp., 625 A.2d 269, 272-73 (Del. Ch. 1993) (Allen, C.).
20

the Court would apply the statute of limitations by analogy.38 This rule prevented 

plaintiffs from circumventing a statute of limitations that would bar their legal 

claim by requesting equitable relief instead.39 

 

38 See id. Adding further complexity, the meaning of “concurrent jurisdiction” has been 

the subject of some debate. Compare Corporate and Commercial Practice § 2.03[b], at 

2-23 to -24 (lamenting the confusing nomenclature of “concurrent jurisdiction” and 

giving example of an injunction for a breach of contract), and Kahn, 625 A.2d at 272 

(listing specific performance of a contract as example of concurrent jurisdiction), with 1 

John Norton Pomeroy, A Treatise on Equity Jurisprudence §§ 138-39 (5th ed. 1941) 

(noting that a suit to compel specific performance of a contract is under exclusive equity 

jurisdiction, but that concurrent jurisdiction involves legal claims seeking relief that is 

technically equitable but closely resembles legal relief), § 170 (describing wholly 

equitable remedies that can be used to enforce legal rights but nonetheless constitute part 

of equity’s exclusive jurisdiction), and § 175 (detailing the required similarity to legal 

relief in order for concurrent jurisdiction to attach). See also id. § 180 n.7 (noting that 

some cases erroneously referring to concurrent jurisdiction in fact belong to exclusive 

jurisdiction due to the purely equitable remedy sought); Artesian Water Co. v. Lynch, 283 

A.2d 690, 692 (Del. Ch. 1971) (seeming to agree with Pomeroy’s definition of concurrent 

jurisdiction by noting that it exists “where the relief sought in equity in a so-called 

complaint for an accounting is actually the mere recovery of money, as is the case here, 

an action for such type of relief is analogous to an action at law for the same or 

equivalent relief.”); Harman v. Masoneilan Int’l, Inc., 442 A.2d 487, 497-98 (Del. 1982) 

(describing scholarly disagreement about definition of concurrent jurisdiction); Int’l Bus. 

Machs. Corp. v. Comdisco, Inc., 602 A.2d 74, 78 n.6 (Del. Ch. 1991) (noting that 

exclusive and concurrent jurisdiction are used different ways by different commentators).

39 This rationale was particularly apt when the Court’s concurrent jurisdiction was limited 

to legal claims seeking equitable remedies that were the functional equivalent of legal 

ones. See supra note 38. In such cases, a plaintiff could have brought the same claim 

and sought a nearly identical remedy in a court of law, increasing the risk that a plaintiff 

would bring a claim in Chancery solely for the purpose of avoiding a limitations defense. 

See Kirby, 1989 WL 111213, at *5 (“. . . in cases of concurrent jurisdiction, it would 

thwart the legislative purpose to allow plaintiffs to circumvent the statutory bar simply by 

filing in Chancery . . . .”); Bovay v. H.M. Byllesby & Co., 29 A.2d 801, 803 (Del. Ch. 

1943) (“[Courts of equity], apparently, take the view that it would be unjust to permit a 

litigant, having a legal right, to evade the statute, barring its enforcement, by seeking the 

aid of another court, having concurrent jurisdiction, merely because it could give more 

adequate and complete relief.”); Bush v. Hillman Land Co., 2 A.2d 133, 134 (Del. Ch. 
21

Over time, the Court expanded its application of statutes of limitations to 

include the opposite circumstance—an equitable claim requesting a legal remedy, 

such as damages for a breach of fiduciary duty. As Chancellor Allen noted in 

Kahn, as the Court’s understanding of concurrent jurisdiction weakened, its use of 

limitations periods widened: 

The workability of this doctrinal structure is dependent upon an 

understanding of the “nature” of various sorts of jurisdiction that the 

English Court of Chancery and, by adoption, our own court, 

possesses. As decades passed, however, this knowledge evolved from 

every day practical knowledge of lawyers to professional exotica. By 

the mid-twentieth century, judges were beginning to grow less 

comfortable with those old concepts of concurrent and exclusive 

chancery jurisdiction. In 1934 Chancellor Wolcott applied the old 

learning in an easy case, Cochran v. F.H. Smith & Co., 20 Del. Ch. 

159, 174 A. 119 (1934). The case was easy because the right asserted 

was not of equitable origin (the claim was common law fraud). It 

could have been brought in the Superior Court. Thus, it plainly was a 

concurrent jurisdiction case to which the statute should apply by 

analogy and it was so applied. But in reaching its decision to apply the

statute of limitations by analogy to bar the action, the court noticed 

that “the bill does not seek any remedy peculiar to equity.” Id. 174 A. 

at 121. The comment reflects, I think, a weakening of the old system 

because the request for an equitable remedy would not in any case 

have altered the character of the jurisdiction that had been invoked or 

the correct outcome of the motion.40

The Court began to widen its analysis to examine whether the relief being sought 

was equitable in nature, and at the same time began to shy away from drawing 

 

1938) (discussing defendant’s argument that, in a concurrent jurisdiction case, plaintiffs 

“by choosing equity rather than law as the forum should not be permitted to escape the 

bar which the statute would impose had they brought their suit at law.”).

40 Kahn, 625 A.2d at 273.
22

conclusions based on a strictly defined concurrent jurisdiction.41 The reach of the 

statute of limitations thus expanded to include equitable claims seeking legal 

relief.

42

 The rationale for this expanded application is somewhat weaker, since a 

plaintiff would not have been able to bring an equitable claim in a court of law, so 

there would be less risk that a plaintiff would be appearing in the Court of 

Chancery merely to attempt to circumvent the statute of limitations. Regardless of 

the historical factors that led to this point, it is now established that statutes of 

limitations also will apply by analogy to equitable claims requesting legal relief.

43

 

 

41 Id. at 273-74.

42 Although it is now clear that statutes of limitations apply to equitable claims seeking 

legal relief, such claims do not necessarily fall within the technical definition of 

concurrent jurisdiction, although the issue may be largely academic. See Price v. Wilm. 

Trust Co., 1996 WL 560177, at *1 (Del. Ch. Sept. 3, 1996) (“[N]o matter what the form 

of the remedy, equity is in cases of this type [breach of express trust] exercising its 

exclusive, not concurrent, jurisdiction.”) (Allen, C.). To the extent I use concurrent 

jurisdiction to describe both types of cases in this opinion, I do so only for simplicity in 

discussing the application of statutes of limitations, which now apply both to legal claims 

seeking equitable relief and to equitable claims seeking legal relief.

43 See Kahn, 625 A.2d. at 273-74; see also In re Dean Witter P’ship Litig., 1998 WL 

442456, at *4 (Del. Ch. July 17, 1998) (applying statute of limitations to breach of 

fiduciary duty claim seeking money damages and accounting) (“It is well-settled under 

Delaware law that a three-year statute of limitations applies to claims for breach of 

fiduciary duty.”), aff’d, 725 A.2d 441 (Del. 1999) (TABLE); Boeing v. Shrontz, 1992 WL 

81228, at *2 (Del. Ch. Apr. 20, 1992) (applying statute of limitations to claim for breach 

of fiduciary duty primarily seeking money damages) (“I find that the Amended 

Complaint seeks essentially legal relief and, thus, is governed by § 8106.”); Halpern v. 

Barran, 313 A.2d 139, 141 (Del. Ch. 1973) (“It is by now firmly established that the 

three-year statute of limitations, 10 Del. C. § 8106, applies to shareholder derivative 

actions which seek recovery of damages or other essentially legal relief.”); Laventhol, 

Krekstein, Horwath & Horwath v. Tuckman, 372 A.2d 168, 169-70 (Del. 1976) 

(recognizing general application of limitations period for damages claims while 
23

Having concluded that statutes of limitations apply by analogy to equitable 

claims seeking legal relief and vice versa, I next consider what such an analogous 

application entails. In many cases, the application of the analogous limitations 

period appears virtually automatic, so as to preclude any other analysis.44 

Although some cases within the Court’s concurrent jurisdiction note that statutory 

limitations periods should not be applied inflexibly, the exceptions often are 

limited to situations in which the limitations period would be tolled.45 For 

instance, in In re Sirius XM Shareholder Litigation, then-Chancellor Strine noted 

that “a filing after the analogous statute of limitations has run cannot be justified 

 

discussing limited exception for fraudulent self-dealing) (“Generally speaking, an action 

in the Court of Chancery for damages or other relief which is legal in nature is subject to 

the statute of limitations rather than the equitable doctrine of laches.”).

44 See, e.g., Kahn, 625 A.2d at 274 (“When the relief sought in Chancery is legal in 

nature, it is clear that Chancery will apply the statute of limitations rather then [sic] the 

equitable doctrine of laches.”) (quoting Bokat v. Getty Oil Co., 262 A.2d 246, 250 (Del. 

1970) (emphasis added); id. at 272 (“When the court applies a statute of limitation by 

analogy, however, it makes no such specific inquiry [into the case]; it makes no 

assessment of fairness or prejudice.”); Halpern, 313 A.2d at 141; Artesian Water Co., 

283 A.2d at 692 (“[W]here the statute bars the legal remedy, it shall bar the equitable 

remedy in analogous cases, or in reference to the same subject matter . . . .”).

45 Sunrise Ventures, LLC v. Rehoboth Canal Ventures, LLC, 2010 WL 363845, at *6 

(Del. Ch. Jan. 27, 2010) (Strine, V.C.) (“In the absence of an applicable tolling doctrine, 

a claim cannot be pressed in the Court of Chancery if the statute of limitations has 

passed.”), aff’d, 7 A.3d 485 (Del. 2010); Weiss v. Swanson, 948 A.2d 433, 451 (Del. Ch. 

2008) (“[E]ven in actions seeking damages or essentially legal relief this court does not 

strictly apply statutes of limitations. Rather, the running of the limitations period can be 

tolled in certain limited circumstances.”) (internal quotation marks omitted).
24

except in the ‘rare’ and ‘unusual’ circumstance that a recognized tolling doctrine 

excuses the late filing.”46 

Cutting in the opposite direction is the rule established by the Supreme 

Court in IAC and Levey, which allows an exception for extraordinary 

circumstances, even for purely legal matters.

47

 Since the IAC exception applies to 

purely legal matters, presumably it also would apply where the statute of 

limitations traditionally has applied only by analogy rather than strictly.48 In other 

 

46 In re Sirius, 2013 WL 5411268, at *4 (finding that claims for breach of fiduciary duty 

and associated requests for declaratory judgments were time-barred by statute of 

limitations). In Sirius, the requested relief was primarily declaratory and injunctive in 

nature, although the plaintiffs also requested money damages. Second Amended Verified 

Class Action and Derivative Complaint, In re Sirius XM S’holder Litig., Cons. C.A. No. 

7800-CS (Jan. 28, 2013). The fact that the claim was equitable and the relief was 

primarily equitable arguably places the case in the previously discussed category of 

exclusive equity jurisdiction, thus making its presumptive application of the statute of 

limitations all the more striking. See supra note 33 and accompanying text. Presumably, 

any automatic application of a statutory limitations period to a purely equitable action 

also would apply in a concurrent jurisdiction case.

47 See Levey, 76 A.3d at 770-72; IAC, 26 A.3d at 177-79.

48 See Stephen G. Perlman, Rearden LLC v. Vox Media, Inc., 2015 WL 5724838, at *13 

(Del. Ch. Sept. 30, 2015) (finding it reasonably conceivable, in defamation claim seeking 

both equitable and legal relief, that one or more IAC factors could be present to justify 

deviating from limitations period, and thus declining to dismiss for laches); Stewart v. 

Wilm. Trust SP Servs., Inc., 112 A.3d 271, 293-94 (Del. Ch. 2015) (using IAC test and 

declining to apply statute of limitations to fiduciary duty, contract, and negligence claims 

seeking damages) (“Nevertheless, in cases where ‘unusual conditions or extraordinary 

circumstances make it inequitable to allow the prosecution of a suit after a briefer, or to 

forbid its maintenance after a longer period than that fixed by the statute,’ this Court has 

the power to set aside the statutory limitation period and analyze whether the claim was 

untimely based on laches principles.”) (quoting IAC, 26 A.3d at 177-78), aff’d, 126 A.3d 

1115 (Del. 2015) (TABLE).
25

words, there is meaningful tension between these cases and Sirius: IAC allows for 

exceptional circumstances even in a purely legal context that should call for the 

strictest application of statutory limitations period, while Sirius seems to apply the 

statute without exception (other than tolling doctrines) even in a purely equitable 

context that warrants the least strict application of the statute of limitations. This 

tension raises the question whether time-bar analysis should be limited to tolling 

doctrines or include a separate inquiry of unusual circumstances under IAC and 

Levey.

49

Notwithstanding these tensions, an analogous limitations period should 

operate as a strong presumption of laches for cases in this Court’s concurrent 

jurisdiction, which generally will obviate the need for a traditional laches inquiry.

50

 

 

49 See Pulieri v. Boardwalk Props., LLC, 2015 WL 691449, at *10 (Del. Ch. Feb. 18, 

2015) (“Although this Court’s laches inquiry is fact-specific, it is often guided (but not 

necessarily dictated) by the analogous statute of limitations.”); id. (noting that, under 

Sirius, filing after limitations period is only justified in rare circumstance in which a 

recognized tolling doctrine applies); id. at *11 (noting that IAC test is for unusual 

circumstances that “may justify deviating from the three-year limitations period”). In 

Pulieri, I noted the possibility of both a tolling exception and an exception under the IAC 

test. As discussed above, Levey concluded that the limitations period did not apply both 

because unusual circumstances existed under IAC and because of equitable tolling, 

suggesting that the analyses are distinct.

50 See Whittington, 991 A.2d at 9 (“The general rule for determining which statute of 

limitations should apply by analogy to a suit in equity is that ‘the applicable statute of 

limitations should be applied as a bar in those cases which fall within that field of equity 

jurisdiction which is concurrent with analogous suits at law.’”) (quoting Ohrstrom v. 

Harris Trust Co., 1998 WL 44983, at *2 (Del. Ch. Jan. 28, 1998)); U.S. Cellular Inv. Co. 

of Allentown v. Bell Atl. Mobile Sys., Inc., 677 A.2d 497, 502 (Del. 1996) (“Where a 

plaintiff seeks a legal remedy in a court of equity and a statute of limitations exists for an 
26

The presumption is rebuttable, however, either by a recognized tolling doctrine or 

by the presence of extraordinary circumstances, such as those indicated in IAC.

51

 

* * * * *

To summarize, although our law is not a model of clarity, I surmise the 

following from the previous discussion: 

1. If a plaintiff brings a legal claim seeking legal relief in the Court of 

Chancery, the statute of limitations (and its tolling doctrines) logically 

should apply strictly and laches should not apply. Otherwise, one may be 

able to circumvent the statutory time-bar that would have applied to the 

same claim if it had been brought in a court of law. Under the precedents 

of IAC and Levey, however, extraordinary circumstances may provide an 

 

analogous action at law, the statutory period may create a presumptive time period for 

application of laches to bar a claim.”); First State Towing, LLC v. Div. of State Police, 

2016 WL 2621137, at *3 (Del. Ch. May 5, 2016) (“[W]hen claims are barred by a 

controlling statute of limitations, a court of equity need not engage in a traditional laches 

analysis.”) (quoting State ex rel. Brady v. Pettinaro Enters., 870 A.2d 513, 527 (Del. Ch. 

2005)); Whittington v. Dragon Gp. L.L.C., 2008 WL 4419075, at *3 (Del. Ch. June 6, 

2008) (“Where the plaintiff seeks legal relief or this court has concurrent jurisdiction, 

however, the court applies the statute of limitations by analogy. Absent a tolling of the 

limitations period, a party’s failure to file within an analogous statute of limitations, if 

any, is typically conclusive evidence of laches.”) (emphasis added); Weiss, 948 A.2d at 

451 (Del. Ch. 2008) (“However, in a case such as this, where the plaintiff seeks legal 

relief or this court has concurrent jurisdiction, the court applies the statute of limitations 

by analogy.”); Bovay, 29 A.2d at 803 (“But, in cases coming within their concurrent 

jurisdiction, it seems that Courts of Equity consider themselves bound to apply the 

analogous statutory period of limitations, governing actions at law.”).

51 See supra note 47.
27

exception to the strict application of statutes of limitations for purely 

legal matters, separate and apart from the application of tolling doctrines.

2. If a plaintiff brings an equitable claim seeking equitable relief, the case 

falls under the Court’s exclusive equity jurisdiction. In this case, the 

doctrine of laches applies and any applicable statute of limitations would 

apply only by analogy, although the Court tends to afford great weight to 

the analogous statutory period, if one exists, and may bar a claim without 

further laches analysis if that period has been exceeded and the Court 

does not consider it inequitable to do so. 

3. When an equitable claim seeks legal relief or a legal claim seeks 

equitable relief, the Court also will apply the statute of limitations by 

analogy, but with at least as much and perhaps more presumptive force

given its quasi-legal status, and will bar claims outside the limitations 

period absent tolling or extraordinary circumstances. 

D. Kraft’s Claim Is Time-Barred

With the foregoing analytical framework in mind, I next analyze whether 

Kraft’s claim is time-barred by considering the nature of Kraft’s claim and the 

relief sought. 
28

1. The Nature of Kraft’s Claim

The essence of Kraft’s complaint is that the shares of Tradeworx that 

WisdomTree purports to own are invalid because they were issued in violation of 

the Delaware Constitution and the DGCL as they existed at the time.52 This 

issuance allegedly impaired the value of Kraft’s shares, albeit through the disputed 

operation of an anti-dilution provision not at issue here.53 Kraft brings this claim 

of invalidity against WisdomTree, Kraft’s purported fellow stockholder. 

Kraft does not explain the source of its right to bring a claim against 

WisdomTree. Kraft appears to have no relationship with WisdomTree, and Kraft 

is not suing derivatively on behalf of Tradeworx.54 What is clear, however, is that 

Kraft’s claim does not arise from a traditional equitable right.

55

 Kraft does not 

invoke “a relationship between the parties uniquely recognized in chancery” or any 

 

52 Compl. ¶ 26.

53 Compl. ¶¶ 2, 4.

54 Indeed, Kraft concedes that it loses if its claim is deemed to be derivative because 

Kraft did not make a demand and does not contend that demand would be excused. Tr. 

Oral Arg. 61 (Dec. 15, 2015).

55 See generally Corporate and Commercial Practice § 2.03[b][1], at 2-28 to -55 (listing 

traditional equitable rights giving rise to Chancery jurisdiction, including trusts, fiduciary 

rights, and derivative actions, among others); see also Rizzo v. Joseph Rizzo & Sons 

Constr. Co., 2007 WL 1114079, at *2 (Del. Ch. Apr. 10, 2007) (“[C]ourts of this state 

have long recognized that a derivative claim is cognizable only in equity.”) (internal 

quotation marks omitted).
29

right “based upon a fiduciary duty or other duty recognized solely in equity.”56 

Kraft is not suing Tradeworx management for breaching its duties to stockholders, 

for instance, and it does not bring a suit derivatively on behalf of Tradeworx. Nor

does Kraft raise any equitable theory against WisdomTree or point to any equitable 

principle on which its claim rests. Instead, Kraft relies entirely on its statutory 

claim under the DGCL and the Delaware Constitution.

57

 

In my view, such statutory and constitutional claims are inherently legal in 

nature. In Reed v. Brady, this Court considered a plaintiff’s request for a 

declaration that certain restrictions on his vehicle’s emergency equipment violated 

the Delaware Constitution by limiting his ability to exercise his authority as a 

sheriff under the Delaware Constitution.58 The Court dismissed the request for 

 

56 McMahon v. New Castle Assocs., 532 A.2d 601, 602, 609 (Del. Ch. 1987) (Allen, C.).

57 See Tr. Oral Arg. at 52 (Dec. 15, 2015) (agreeing that, but for the statute, Kraft would 

have no claim at all). In Highlights for Children, a case discussed further below, the 

Court addressed a similar issue in passing when it considered whether it had subject 

matter jurisdiction over a request for a declaratory judgment that shares were invalid 

because they were issued for no consideration, in violation of the Delaware Constitution 

at the time. Although it did not clearly demarcate the line between claim and relief, the 

Court noted that the constitutional question was the sole basis for questioning the validity 

of the shares. The Court went on to find that it had subject matter jurisdiction based on 

the relief plaintiff sought. But if the constitutional claim had been equitable, the Court 

would have had jurisdiction on that basis without needing further analysis. By 

implication, the claim itself was not inherently equitable, or the Court would not have 

needed to assess the nature of the relief sought. See Highlights for Children, Inc. v. 

Crown, 193 A.2d 205, 206 (Del. Ch. 1963).

58 Reed v. Brady, 2002 WL 1402238, at *1 (Del. Ch. June 21, 2002), aff’d, 818 A.2d 150 

(Del. 2003) (TABLE).
30

lack of subject matter jurisdiction because the plaintiff was “neither seeking to 

vindicate an equitable right nor, in this context, pursuing an equitable remedy.”59 

The Court went on to note that “[i]ssues of statutory and constitutional 

interpretation are, beyond question, legal issues capable of resolution by the 

Superior Court, and declaratory relief is available there to the same extent as it is 

here.”60 

Here, not only does Kraft provide no equitable underpinning for its statutory 

or constitutional claim, it also does not allege that any of its own statutory or 

constitutional rights were violated, in contrast to Reed v. Brady. Kraft instead uses 

the constitution in the manner of a statute to show that certain corporate actions 

were invalid. For all of these reasons, Kraft’s claim is purely legal in nature.

2. The Nature of Kraft’s Requested Remedy

Kraft’s only requested remedy is a declaratory judgment, which all courts in 

Delaware are authorized to issue under 10 Del. C. § 6501. A declaratory judgment 

is a creature of statute and “not a purely equitable remedy.”61 Whether a 

declaratory judgment is legal or equitable in nature depends on the underlying 

 

59 Id. at *3.

60 Id. at *3 n.7.

61 Prestancia Mgmt. Gp., Inc. v. Va. Heritage Found., II LLC, 2005 WL 1364616, at *7 

(Del. Ch. May 27, 2005); see also Reeder v. Wagner, 2007 WL 3301026, at *1 (Del. Ch. 

Nov. 1, 2007) (“It is well settled that the Declaratory Judgment Act does not 

independently confer jurisdiction on this court.”).
31

subject matter. Although most cases that address the nature of a declaratory 

judgment do so in the course of deciding whether there is jurisdiction to hear the 

case, they nonetheless shed light on whether the remedy is equitable or legal. 

Some cases have linked the nature of the declaratory judgment to the nature of the 

underlying claim.62 Others have looked at the accompanying requested relief or 

the essence of the declaration being sought.

63

 Thus, the nature of Kraft’s requested 

declaratory judgment depends on its underlying context.

Kraft requests a declaratory judgment regarding the validity of 

WisdomTree’s shares of Tradeworx. As I concluded above, Kraft’s underlying 

claim is legal in nature because it is based in essence on a statute and has no basis 

in equity. Were I to determine the nature of the declaratory judgment based solely 

 

62 See Heathergreen Commons Condo. Ass’n v. Paul, 503 A.2d 636, 644 (Del. Ch. 1985) 

(stating that jurisdiction to issue declaratory judgment depends on legal or equitable 

nature of the underlying subject matter of the controversy); Eluv Hldgs. (BVI) Ltd. v. 

Dotomi, LLC, 2013 WL 1200273, at *5 (Del. Ch. Mar. 26, 2013) (concluding that 

declaratory judgment to establish share ownership was based on claim that was 

functionally equivalent to breach of contract, and that therefore statute of limitations 

applied by analogy).

63 See E. Shore Envtl., Inc. v. Kent Cty. Dep’t of Planning, 2002 WL 244690, at *4 (Del. 

Ch. Feb. 1, 2002) (finding equitable jurisdiction to issue declaratory judgment because 

ultimate remedy being sought was an injunction); Highlights for Children, 193 A.2d at 

206 (finding equitable jurisdiction over claim for declaratory judgment that shares were 

invalid, because “the court must consider what plaintiff’s complaint really seeks” beyond 

the face of the complaint). See also Diebold Computer Leasing, Inc. v. Commercial 

Credit Corp., 267 A.2d 586, 591 (Del. 1970) (noting that the Court of Chancery has 

jurisdiction “if there is any underlying basis for equity jurisdiction measured by 

traditional standards” and finding such a basis existed because “ultimate coercive relief 

would be injunctive”).
32

upon the nature of Kraft’s claim, I thus would conclude that the declaratory 

judgment sought here was a form of legal relief. But I also will examine the 

fundamental essence of Kraft’s declaratory judgment request, which resembles a 

request to cancel shares.64

In Bush v. Hillman Land Company, the Court of Chancery held that the 

cancellation of shares was a distinctly equitable remedy without legal analogue.65 

The plaintiff in Bush sought judicial cancellation of shares and certificates that 

allegedly had been issued illegally six years before suit was filed.

66

 The company 

argued that the claim was barred by a three-year statute of limitations on the theory 

that the claim fell within the Court’s concurrent jurisdiction.67 The Court 

disagreed, concluding that the relief sought was equitable in nature: 

The law forum has no remedy whereby that result can be obtained. 

This suit is one where the non-existence of alleged stock is sought to 

be decreed and all appearance of its pretended existence obliterated. 

The fundamental concept lying at its foundation is equitable in nature 

and not within the scope of the law’s notice.68

 

64 See supra note 63.

65 Bush v. Hillman, 2 A.2d at 135.

66 Id. at 134.

67 Id. (“The demurrants treat this case as one falling within the field of the concurrent 

jurisdiction of law and equity, and, so treating it, make the point that the complainants by 

choosing equity rather than law as the forum should not be permitted to escape the bar 

which the statute would impose had they brought their suit at law.”).

68 Id. at 135.
33

 

On that basis, the Court concluded that the statute of limitations did not apply and 

that the company’s time-bar argument was governed by the doctrine of laches:

There is then no remedy whatever at law, not to speak of an adequate 

remedy, to which the complainants can resort for invalidating the 

shares in question and obliterating the appearance of their existence as 

outstanding shares. The case, then, is not one where the act of 

limitations at law is applicable in equity.

* * * * *

My conclusion is that the case is not one where the statute of 

limitations is applicable. Any delay which has attended the institution 

of the suit, if it be such as to constitute a defense, is operative not by 

the uncompromising rule of the statute of limitations, but according as 

it gives rise or not to the principles that inhere in the equitable 

doctrine of laches.69

WisdomTree seeks to distinguish Bush on the ground that the plaintiff 

requested the cancellation of shares, rather than a declaratory judgment that the 

shares were void. Significantly, however, in a case none of the parties cited, this 

Court in Highlights for Children examined a request for a judgment declaring that 

certain shares were invalid because they allegedly were issued for no consideration 

in violation of the Delaware Constitution.

70

 

 

69 Id. at 136, 137. The Court ultimately deferred on deciding whether the claim was 

barred by laches so that a factual record could be developed. Id. at 137. 

70

 Highlights for Children, 193 A.2d at 206. 
34

The defendant in Highlights for Children argued that the Court of Chancery 

lacked subject matter jurisdiction because the controversy was not equitable in 

nature and was cognizable at law.

71

 Although the complaint demanded a 

declaratory judgment, the Court opined that equitable jurisdiction “is not now lost 

merely because the case is couched in terms of a declaratory judgment action” and 

noted that it “must consider what plaintiff’s complaint really seeks.”72 Citing 

Bush’s proposition that stock cancellation is fundamentally equitable in nature, 

Chancellor Seitz concluded that plaintiff’s request for a declaratory judgment that 

the disputed shares were invalid fell within its equity jurisdiction.73 Highlights for 

Children thus suggests that, looking to the essence of Kraft’s complaint, the 

requested declaratory relief would be equitable in nature.

The issue resolved in Highlights for Children was “not wholly free from 

doubt,”

74 and other cases underscore this ambiguity. As discussed above, in Reed 

v. Brady, this Court determined that it was unable to hear a request for declaratory 

relief because the plaintiff was “simply asking for an interpretation of Delaware 

law” and was “neither seeking to vindicate an equitable right nor, in this context, 

 

71 Id.

72 Id. See also supra note 63.

73 See Highlights for Children, 193 A.2d at 206. 

74 Id.
35

pursuing an equitable remedy.”75 Similarly, in Reeder v. Wagner, this Court found 

that it lacked subject matter jurisdiction over a declaratory judgment action 

because the claims involved statutory interpretation rather than an equitable 

issue.76 

Although these cases suggest that the issue is less than certain, the case at 

hand bears substantial similarities to Highlights for Children, and the essence of 

Kraft’s requested relief is functionally similar to an equitable cancellation of 

shares. Thus, looking to the remedy that Kraft “really seeks,” I treat Kraft’s 

requested relief as equitable in nature. 

* * * * *

Before discussing the consequence of my conclusion that Kraft’s claim is 

legal and the relief Kraft seeks is equitable, I address two other arguments Kraft 

asserted based on the Bush decision. First, Kraft suggests that it would be 

improper to apply the statute of limitations here in any manner, based on the Bush

 

75 See Reed v. Brady, 2002 WL 1402238, at *2-4; see also supra note 58 and 

accompanying text. 

76 See Reeder v. Wagner, 2007 WL 3301026, at *1 (“Because the complaint does not seek 

to vindicate an equitable right and does not demand an exclusively equitable remedy, this 

court lacks the power to adjudicate the dispute.”). The Court in Reeder noted that the 

statutes at issue did not assign the task of statutory interpretation to the exclusive 

jurisdiction of the Court of Chancery. Here, the Court of Chancery indisputably has 

jurisdiction to interpret the DGCL under 8 Del. C. § 111(b). 
36

Court’s decision not to apply a statute of limitations to a claim for cancellation. I 

disagree. 

Importantly, the holding in Bush to apply laches, and not to apply the statute 

of limitations by analogy, relied on Professor Pomeroy’s view of concurrent 

jurisdiction circa 1938. That definition covered only legal claims seeking 

equitable remedies that were substantially similar to relief available at law.77 As 

discussed above, the scope of concurrent jurisdiction has evolved since Bush was 

decided in 1938. At least insofar as time-bar principles are concerned, the Court 

no longer limits concurrent jurisdiction to include only legal actions seeking 

equitable remedies that resemble legal ones, but now also includes legal actions 

seeking purely equitable remedies.78 Thus, the application of statutes of 

limitations by analogy has expanded over time. Put differently, although Kraft’s 

action may have fallen outside of the Court’s concurrent jurisdiction as defined 

when Bush was decided, it now falls within it and is subject to the application of 

 

77 Bush v. Hillman, 2 A.2d at 134 (describing Pomeroy’s definition of concurrent 

jurisdiction). See also 1 Pomeroy, supra note 38, § 173 (explaining requirements for 

concurrent jurisdiction) (“The primary right . . . which is the foundation of the suit must 

be legal, or else the case would belong to the exclusive jurisdiction of equity . . . .”); id. § 

137 (explaining that all cases in which the right is equitable and not legal fall within 

exclusive equity jurisdiction, regardless of the nature of the remedy); id. §§ 138-39 

(noting that a purely equitable remedy for a legal right, such as specific performance of a 

contract, falls exclusively under equity jurisdiction, while a legal right seeking an 

equitable remedy that closely resembles a legal remedy, such as an equitable means of 

recovering money, falls under concurrent jurisdiction).

78 See supra notes 38-39 and accompanying text.
37

statutes of limitation to concurrent jurisdiction claims. Under this Court’s 

contemporary jurisprudence, furthermore, even if the claim had fallen entirely 

within this Court’s equity jurisdiction, rather than concurrent jurisdiction, the 

Court would still apply the statute of limitations by analogy, though arguably with 

less strictness.79

Second Kraft suggests that, under Bush, the statute of limitations cannot 

apply because the shares are void, and “[t]he passage of time cannot resurrect a 

void transaction . . . .”80 But this argument ignores the Bush Court’s conclusion 

that laches could bar the claim even if a statute of limitations did not.81 The issue 

was whether an analogous statute of limitations existed, not whether a claim that a 

transaction was void could never be time-barred. Kraft provides no authority for 

the proposition that a plaintiff cannot lose a claim to void a transaction based on 

delay, and Bush and other cases suggest otherwise.82 

 

79 See supra Part II.C.2. 

80 Pl.’s Ans. Br. 7.

81 See Bush v. Hillman, 2 A.2d at 137 (noting that a successful laches defense was 

possible but deferring decision until the factual record was further developed).

82 See Beard v. Elster, 160 A.2d 731, 739 (Del. 1960) (finding that shares invalidly issued 

for prohibited future consideration could later be validated by lapse of time and 

subsequent performance of the contracted consideration); Frank v. Wilson & Co., 32 

A.2d 277, 301 (Del. 1943) (noting that opportunity to invalidate a void corporate 

transaction converting class A shares into common shares could be lost due to ratification 

or laches); Brown v. Fenimore, 1977 WL 2566, at *2-3 (Del. Ch. Jan. 11, 1977) (noting 
38

3. An Analogous Limitations Period Applies to Kraft’s Claim

Because I have found Kraft’s claim to be legal and the relief Kraft seeks to 

be equitable, Kraft’s action falls into this Court’s concurrent jurisdiction, as it is 

now defined. For the reasons discussed above, therefore, if an applicable statute of 

limitations exists, I will apply it by analogy and give it presumptive effect absent 

tolling or extraordinary circumstances. Under 10 Del. C. § 8106, a three-year 

limitations period applies to actions “based on a statute.” This statute of 

limitations thus applies by analogy to Kraft’s claim, which is based on a statute 

(DGCL § 152) and a constitutional provision that goes hand-in-hand with the 

statute and is invoked for the same purpose.

83

The three-year limitations period created by 10 Del. C. § 8106 begins to run 

from the time of the wrongful act, without regard for whether the plaintiff became 

aware of the wrongdoing at that time.84 The allegedly wrongful stock issuance 

giving rise to Kraft’s claim took place on May 4, 2000. This action was filed on 

 

that share issuance for prohibited consideration was not necessarily ultra vires or 

unlawful, and that acquiescence in the transaction could bar a claim to invalidate shares).

83 As discussed above, Kraft’s complaint uses Article 9, Section 3 of the Delaware 

Constitution in the manner of a statute rather than arguing that its constitutional rights 

were violated.

84 See Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 319 (Del. 2004) (“This 

Court has repeatedly held that a cause of action ‘accrues’ under Section 8106 at the time 

of the wrongful act, even if the plaintiff is ignorant of the cause of action.”).
39

March 20, 2015. Consequently, the statutory period expired almost twelve years 

before suit was filed. 

Kraft has not made any tolling argument.

85 Taking into consideration the 

factors identified in IAC, I find that this is not a case that “presents the rare 

circumstance where the analogous period of limitations ought not to be the 

measure of whether a litigant unreasonably delayed in commencing his action.”86 

Kraft’s claim exceeded the analogous statutory limitations period, and did so by 

almost twelve years. Accordingly, Kraft’s claim is barred by laches.

E. Tradeworx’s Motion for Leave to Amend Would Be Futile

Tradeworx requests leave to amend its pleadings to add a cross-claim 

seeking a declaratory judgment that WisdomTree’s purported shares in Tradeworx 

are void or voidable. WisdomTree argues in opposition that the amendment would 

be futile because it would not survive a motion to dismiss under Court of Chancery 

Rule 12(b)(6). I agree. 

Tradeworx’s declaratory judgment claim is similar to Kraft’s, with a couple 

of additions. Tradeworx and Kraft each request a declaration that WisdomTree’s 

purported shares in Tradeworx are void because they purportedly were issued 

 

85 Tr. Oral Arg. at 53 (Dec. 15, 2015) (“We are not making a tolling argument.”).

86 Levey, 76 A.3d at 772. The only one of the five factors identified in IAC that arguably 

applies here in my view is that, when this action was filed, the parties had a “bona fide 

dispute as to the validity of the claim.” IAC, 26 A.3d at 178. 
40

solely in exchange for future services. Tradeworx also requests in the alternative a 

declaration that the shares are voidable, and a determination of the number of 

shares WisdomTree owns, including as a result of any alleged anti-dilution rights.87 

For purposes of determining whether Tradeworx’s claim also is barred by laches, 

the alternative request that the shares be declared voidable as opposed to void does 

not alter the analysis.88

Tradeworx’s proposed cross-claim would be barred by laches for the same 

reasons I concluded that Kraft’s claim is time-barred. If anything, the justification 

for laches applies even more forcefully for Tradeworx. Although Kraft alleges it 

was unaware of the original transaction by which WisdomTree acquired its shares, 

the same cannot be said about Tradeworx, which participated in and thus

necessarily knew about the transaction from the outset.89 Consequently, the statute 

of limitations would presumptively apply by analogy to Tradeworx’s claim as well, 

and the claim would be barred by laches. For these reasons, Tradeworx’s 

amendment would be futile. 

 

87 Mot. for Leave to Amend Ex. A at 7.

88 I do not address Tradeworx’s request that I make a determination relating to the alleged 

anti-dilution rights. Any potential disputes relating to the anti-dilution rights do not 

pertain to the question addressed in this action, namely whether the 1,045,000 shares 

originally issued to WisdomTree may be challenged as void or voidable. Nor have the 

parties briefed those issues.

89 See Tr. Oral Arg. 61 (Dec. 15, 2015).
41

III. CONCLUSION

For the foregoing reasons, WisdomTree’s motion to dismiss the complaint is 

GRANTED, and Tradeworx’s motion for leave to amend its pleading is DENIED. 

The complaint is dismissed with prejudice.

IT IS SO ORDERED.