COURT OF CHANCERY

OF THE

STATE OF DELAWARE

LORI W. WILL

VICE CHANCELLOR

LEONARD L. WILLIAMS JUSTICE CENTER

500 N. KING STREET, SUITE 11400

WILMINGTON, DELAWARE 19801-3734

Date Submitted: June 30, 2023

Date Decided: July 18, 2023

William M. Alleman, Jr., Esquire

Sean A. Meluney, Esquire

Matthew D. Beebe, Esquire

Meluney Alleman & Spence, LLC

1143 Savannah Road, Suite 3-A

Lewes, Delaware 19958

Catherine A. Gaul, Esquire

Randall J. Teti, Esquire

Ashby & Geddes, P.A.

500 Delaware Avenue, 8th Floor

Wilmington, Delaware 19801

R. Bruce McNew, Esquire

Cooch and Taylor, P.A.

1000 North West Street, Suite 1500

Wilmington, Delaware 19801

Ronald N. Brown, III, Esquire

Kelly L. Freund, Esquire

DLA Piper LLP (US)

1201 North Market Street, Suite 2100

Wilmington, Delaware 19801

RE: Uvaydov v. Fenwick-Smith et al.,

C.A. No. 2023-0137-LWW

Dear Counsel:

I write regarding the Lightning Defendants’ Motion for Continued 

Confidential Treatment (the “Motion”).

1

 The movants seek an order under Court 

of Chancery Rule 5.1(b) to continue the confidential treatment of information 

redacted from the public version of the complaint. Three non-party petitioners, 

who are plaintiffs in related federal securities litigation, oppose the Motion.

1 Lightning Defs.’ Mot. for Continued Confidential Treatment (Dkt. 15) (“Mot.”). The 

“Lightning Defendants” are listed in the Motion. See id. at 1.
C.A. No. 2023-0137-LWW

July 18, 2023

Page 2 of 11

After weighing the public right of access against the interests of nominal 

defendant Lightning eMotors, Inc. (“Lightning”), I conclude that the Motion 

should be granted with limited exceptions.

I. BACKGROUND

This is one of several pending matters concerning the de-SPAC business 

combination of GigCapital3, Inc. and Lightning’s predecessor, Lightning Systems, 

Inc. In the present matter, plaintiff Zalmon Uvaydov is pursuing derivative claims 

for breach of fiduciary duty against the pre- and post-de-SPAC Board of Directors,

and for fraud and aiding and abetting breaches of fiduciary duty against Lightning 

Systems’ directors. He contends that GigCapital3 overpaid for the target and that 

Lightning’s Board “tout[ed] sales prospects that it knew were unachievable.”

2

 

Uvaydov’s Verified Shareholder Derivative Complaint (the “Complaint”) 

was filed on February 6, 2023, with a redacted public version filed three days 

later.3 The Complaint includes material that Uvaydov obtained from Lightning 

through a books and records demand pursuant to 8 Del. C. § 220.

More than a year before the Complaint was filed, David P. Sarro, Kevin L. 

Tye, and Jess Q. Williams (together, the “Federal Plaintiffs” or the “Petitioners”) 

filed a putative class action in the United States District Court for the District of 

2 Verified S’holder Derivative Compl. (Dkt. 1) (“Compl.”) ¶ 2.
C.A. No. 2023-0137-LWW

July 18, 2023

Page 3 of 11

Colorado (the “Federal Action”) against Lightning and certain of the individual 

defendants here.

4

 The claims in the Federal Action are brought under the 

Securities Act of 1933 and the Securities Exchange Act of 1934. The Federal 

Action is subject to a discovery stay under the Private Securities Litigation Reform 

Act of 1995 (“PSLRA”).5

On March 28, 2023, the parties to this lawsuit, the Federal Action, and 

another related case engaged in an unsuccessful mediation session.

6

 According to 

the Lightning Defendants, the Federal Plaintiffs subsequently announced an

intention to amend their pleading and requested that Lightning provide them with 

the same books and records given to Uvaydov. Lightning declined because it 

believes that producing the documents to the Federal Plaintiffs would contravene

the PSLRA discovery stay.7 

3 Public Version of Verified S’holder Derivative Compl. (Dkt. 2).

4 Shafer v. Lightning eMotors, Inc., et al., No. 1:21-cv-02774-RMR-KLM (D. Colo.).

5

In addition, a putative class action was filed in this court on August 4, 2021. Delman v. 

GigAcquisitions3, LLC, C.A. No. 2021-0679-LWW (Del. Ch.). Another derivative 

complaint was filed in the United States District Court for the District of Colorado in 

February 2023. Lanham v. Fenwick-Smith, et al., No. 1:23-cv-00507-NYW-NRN 

(D. Colo.).

6 The Federal Plaintiffs received a copy of the unredacted Complaint during mediation. 

See Suppl. Decl. of Boris Feldman (Dkt. 22) ¶ 2.

7 See Mot. at 5.
C.A. No. 2023-0137-LWW

July 18, 2023

Page 4 of 11

On June 8, the Petitioners filed a Notice of Challenge to Confidential 

Treatment in this court.8 On June 15, the Lightning Defendants filed the Motion.

On June 22, the Petitioners filed an opposition to the Motion.9 On June 23, the 

Lightning Defendants moved for leave to file two declarations in reply, which I 

granted.

10

 On June 26, the Lightning Defendants filed two supplemental 

declarations in further support of the Motion.11 On June 28, the Petitioners moved

for leave to file a sur-reply, which I granted as unopposed.

12

 After the Petitioners 

filed their sur-reply on June 30,

13 I took the Motion under advisement.

II. ANALYSIS

Court of Chancery Rule 5.1 “was created to accommodate a minor exception 

to a truism, that in a free and democratic society courts must conduct their business 

in the open, subject always to scrutiny by the public that these courts serve.”

14

 The 

party seeking to maintain confidential treatment “bears the burden of establishing 

8 Dkt. 14.

9 Opp’n to Defs.’ Mot. for Continued Confidential Treatment (Dkt. 17) (“Opp’n”).

10 Dkts. 18, 19.

11 Dkts. 21-22.

12 Dkt. 24.

13 Dkt. 27.

14 GKC Strategic Value Master Fund, LP v. Baker Hughes Inc., 2019 WL 2592574, at *2

(Del. Ch. June 25, 2019). 
C.A. No. 2023-0137-LWW

July 18, 2023

Page 5 of 11

good cause” for continued confidentiality.15 Good cause may exist where “the 

public interest in access to Court proceedings is outweighed by the harm that

public disclosure of sensitive, non-public information would cause.”

16 When 

confidential treatment is challenged, “the court balances the public and private 

interests, ‘with a tie going to disclosure.’”

17

 

Rule 5.1(f) permits “[a]ny person” to challenge the continued confidential 

treatment of filings in this court.

18

 A challenger’s purpose does not affect a party’s 

enduring “duty to designate confidential information under Rule 5.1 [and] ensure 

that the redacted public document reflects only [the party’s] confidentiality 

interests.”

19 Still, “the court is [not] blind to the challenger’s identity or

motivations in conducting a Rule 5.1 analysis. It is a factor that the court can 

appropriately weigh in its balancing of the public and private interests.”

20

15 Ct. Ch. R. 5.1(b)(3).

16 Ct. Ch. R. 5.1(b)(2).

17 In re Lordstown Motors Corp. S’holders Litig., 2022 WL 601120, at *1 (Del. Ch. Feb. 

28, 2022) (quoting GKC Strategic, 2019 WL 2592574, at *2).

18 Ct. Ch. R. 5.1(f); see Cormier v. Burns, C.A. No. 2021-1049-MTZ, at 3 (Del. Ch. Jan. 

24, 2022) (ORDER) (“[T]he mere fact that the movant is a plaintiff subject to a PSLRA 

stay does not invalidate his Rule 5.1 request.”).

19 See GKC Strategic, 2019 WL 2592574, at *6 (explaining that a challenger’s 

motivations are “immaterial” to a party’s obligations under Rule 5.1).

20 Lordstown, 2022 WL 601120, at *7.
C.A. No. 2023-0137-LWW

July 18, 2023

Page 6 of 11

Although I review the Motion with the public’s access right front of mind, I

do so with some skepticism. The Petitioners are challenging confidential treatment 

to generate fodder for an amended complaint in the Federal Action. This is not a 

public interest.21 It is creative litigation gamesmanship.

22

Lightning, for its part, asserts that the redactions do not impair the public’s 

understanding of the claims in this matter. The Complaint contains 31 partial 

redactions out of 222 paragraphs. According to Lightning, continued confidential 

treatment for these redactions is warranted to protect it from competitive harm that 

could result from disclosing its sensitive proprietary or financial material. 

The challenged redactions fall into three categories: forward-looking 

projections, customer identities and orders, and Board recommendations and 

analyses. I take each in turn.

21 Cf. Al Jazeera Am., LLC v. AT&T Servs., Inc., 2013 WL 5614284, at *5 (Del. Ch. Oct. 

14, 2013) (observing that challenges “filed by notable news organizations and reporters 

demonstrate the public’s interest in th[e] litigation”); see also In re Boeing Co. Deriv.

Litig., 2021 WL 392851, at *3 (Del. Ch. Feb. 1, 2021) (same); Sequoia Presidential 

Yacht Grp. LLC. v. FE P’rs LLC, 2013 WL 3724946, at *3 (Del. Ch. July 15, 2013)

(same).

22 See GKC Strategic, 2019 WL 2592574, at *2 (noting that “gamesmanship” can be 

taken into account in a Rule 5.1 analysis).
C.A. No. 2023-0137-LWW

July 18, 2023

Page 7 of 11

A. Forward-Looking Projections

The bulk of the redactions concern revenue and production projections, 

forecast to 2025.

23 The Petitioners argue that the information is “stale” because it 

“consists of assessments of projection capabilities and customer orders for vehicles 

already in the market” and “out-of-date financial projections.”

24

 But according to a 

declaration filed by Lightning’s Chief Legal Officer and Corporate Secretary Steve 

Mason, it is not that simple.

25

 

Mason’s sworn declaration states that the “projections redacted in the 

Complaint are not stale and their disclosure would cause the Company competitive 

harm.”

26

 “[P]rojections dating from 2020 continue to be sensitive competitive

information” since Lightning’s “industry is characterized by long sale cycles” with 

customer orders that take months or years to complete.

27 Even though Lightning’s 

vehicles are in the market, a competitor could use the redacted information to 

23 See Compl. ¶¶ 99-100, 102-11, 113-14, 116, 120-21, 123, 128. Paragraphs 146 to 148 

of the Complaint reflect discussions of these projections by the Board and Audit 

Committee. See infra note 39 and accompanying text.

24 Opp’n at 6.

25 Suppl. Decl. of Steve Mason (Dkt. 21) (“Mason Decl.”).

26 Id. ¶ 4.

27 Id. ¶¶ 4-5.
C.A. No. 2023-0137-LWW

July 18, 2023

Page 8 of 11

“discern Lightning’s overall production projections for a given customer” or “how 

much previously projected revenue and production remain outstanding.”

28

Given this context, revealing the information could cause competitive injury

to Lightning. Conversely, the public interest is slight. Lightning did not 

whitewash the Complaint. Redactions pertaining to projections are—with one

exception addressed below29—appropriately limited to “precise sales and revenue 

goals” and Lightning’s “anticipated production timeline.”

30

 An interested reader 

can readily discern the nature of this action and the purported harms at issue 

without the disclosure of Lightning’s sensitive forward-looking projections. 

B. Non-Public Customer Identities and Orders

The second category of information concerns non-public customer identities 

and orders.

31 The Petitioners argue that there is no basis to conclude Lightning’s 

customer relationships would be impaired if revealed.

32

 But, as Mason explains,

disclosure of confidential customer identities could provide competitors with 

opportunities to “undercut Lightning’s relationships” given the nature of the 

28 Id. ¶ 5. 

29 See infra Order ¶ 2.a (detailing redactions to remain in paragraph 121 of the

Complaint).

30 Lordstown, 2022 WL 601120, at *4.

31 Compl. ¶¶ 103-06, 111, 113-16, 118-20, 128, 158. The Complaint does not redact the

names of customers that have been publicly disclosed. E.g., id. ¶¶ 106-10.
C.A. No. 2023-0137-LWW

July 18, 2023

Page 9 of 11

nascent electric vehicle industry.

33

 The risk of such harm is uncertain, yet 

meaningful if realized. It outweighs the minor public interest in knowing 

Lightning’s customer identities.

34

The Complaint also narrowly redacts information about non-public customer 

orders (actual and projected) and price terms.

35

 Good cause exists to maintain the 

confidentiality of this material since disclosure could provide an unfair advantage 

to third parties in future dealings with Lightning.36“[T]he potential economic 

harm caused by disclosure” of a price term “outweighs the public interest in 

accessing that information, largely because knowledge about price terms does not 

impinge on the public’s understanding of the disputes before this Court.”

37

 That is 

32 Opp’n at 7.

33 Mason Decl. ¶ 6.

34 See Lordstown, 2022 WL 601120, at *6 (explaining, in the context of an early-stage 

electric vehicle company, that “good cause exist[ed] to maintain the confidential 

treatment of customers’ identities that are not already in the public mix”).

35 See Compl. ¶¶ 103-11, 113, 120, 123, 128.

36 Mason Decl. ¶ 9.

37 Al Jazeera Am., 2013 WL 5614284, at *5; see also In re Oxbow Carbon LLC, 2016 

WL 7323443, at *4 (Del. Ch. Dec. 15, 2016) (finding good cause to maintain 

confidentiality of prices offered by bidders and their identities); Mitsubishi Power Sys. 

Ams., Inc. v. Babcock & Brown Infrastructure Grp. U.S., LLC, 2013 WL 10215618, at *2 

(Del. Ch. Mar. 15, 2013) (ORDER) (holding that pricing and profit-related information 

qualified for continued confidential treatment under Rule 5.1). 
C.A. No. 2023-0137-LWW

July 18, 2023

Page 10 of 11

also true for the specifics of customer orders, which are not needed for the public 

to understand the claims in the Complaint.

38

C. Board Recommendations and Analyses

The final category of information concerns Board-level analyses and 

discussions.

39 The public interest in this category is generally stronger than in the

other two. The Complaint alleges that the Board members breached their fiduciary 

duties and defrauded Lightning by, for example, making public misstatements 

about Lightning’s financial projections, order backlog, and production capabilities. 

The Board’s knowledge of such topics is at the core of this matter. 

By and large, though, the allegations about the Board’s analyses and 

deliberations are disclosed in the public version of the Complaint.

40

 The redacted 

material concerns strategic discussions about revenue and product projections, key 

customer relationships, and organizational planning. Disclosure could allow

Lightning’s competitors to identify Lightning’s business development strategies

and impair Lightning’s market competitiveness.

41 Narrow redactions of this 

38 See Lordstown, 2022 WL 601120, at *6.

39 Compl. ¶¶ 121, 146-51, 157.

40 See Lordstown, 2022 WL 601120, at *4 (cautioning that “general descriptions of 

board-level summaries” are ineligible for confidential treatment); Cormier, C.A. No. 

2021-1049-MTZ, at 3 (same).

41 Mason Decl. ¶¶ 4-7.
C.A. No. 2023-0137-LWW

July 18, 2023

Page 11 of 11

specific information do not impede the public’s understanding of Uvaydov’s 

contention that Lightning overstated its sales prospects.42

A handful of the redactions go farther and sweep in vague generalities

discussed by the Board. In my view, these redactions are unnecessary and do little 

to protect Lightning’s legitimate interests in maintaining the confidentiality of its 

sensitive business information. The redactions that should be lifted in a revised 

public version of the Complaint are detailed in an Order below.

III. CONCLUSION

The Motion is granted in part and denied in part. Lightning has shown good 

cause for continued confidential treatment for most of the challenged 

information.

43

 Several redactions go too far and must be lifted. Lightning is 

directed to prepare a revised version of the Complaint for public filing consistent

with the Order accompanying this decision.

Sincerely yours,

/s/ Lori W. Will

Lori W. Will

Vice Chancellor

42 See GKC Strategic Value Master Fund, LP v. Baker Hughes Inc., C.A. No. 2017-0769-

SG, at 22-23 (Del. Ch. Feb. 28, 2019) (TRANSCRIPT) (discussing the “pinpoint

confidentiality” designations that Rule 5.1 “goes toward”). 

43 Having found good cause for continued confidential treatment, I decline to take up the 

Lightning Defendants’ arguments that the Petitioners’ challenge violates the PSLRA, 

intrudes on mediation confidentiality, or runs contrary to 8 Del. C. § 220.
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE 

ZALMON UVAYDOV,

 Plaintiff,

v.

ROBERT FENWICK-SMITH, TIM 

REESER, ANDREW COORS, CRAIG 

HUTH, HEATH MORRISON, GLEN 

PERLMAN, TRENT YANG, AVI KATZ, 

RALUCA DINU, NEIL MIOTTO, JOHN 

MIKULSKY, ANDREA BETTIBERUTTO, PETER WANG, BRUCE 

COVENTRY, THADDEUS SENKO, and 

DIANA TREMBLAY,

 Defendants,

 and

LIGHTNING EMOTORS, INC.,

 Nominal Defendants.

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

C.A. No. 2023-0137-LWW

ORDER

WHEREAS, on February 6, 2023, plaintiff Zalmon Uvaydov filed a Verified 

Shareholder Derivative Complaint (the “Complaint”) in this action;

WHEREAS, on June 8, 2023, petitioners David P. Sarro, Kevin L. Tye, and 

Jess Q. Williams filed a notice challenging the confidential treatment of the 

Complaint;
2

WHEREAS, on June 15, 2023, certain of the defendants filed a motion for 

continued confidential treatment (the “Motion”);

WHEREAS, the Motion was fully briefed and submitted for decision as of 

June 30, 2023; and

WHEREAS, on July 18, 2023, the court issued a letter opinion granting the 

Motion in part and denying it in part;

IT IS HEREBY ORDERED this 18th day of July, 2023, that, for the reasons 

set forth in the court’s July 18, 2023 letter opinion:

1. The Motion is granted insofar as the redacted information in 

paragraphs 99-100, 102-11, 113-20, 123, 128, and 158 of the Complaint is entitled

to continued confidential treatment.

2. The Motion is denied insofar as some of the redactions in paragraphs 

121, 146-51, and 157 of the Complaint are overbroad and include general

descriptions or would seem unlikely to cause competitive harm to Lightning if 

disclosed. The following information only is entitled to continued confidential

treatment and may remain redacted:

a. Paragraph 121: Text in the fourth line after “[that]” through and 

including the remainder of the paragraph.

b. Paragraph 146: The dollar figure in the second line.
3

c. Paragraph 147: Text in the second line after “by” through but 

not including “but” in the third line; text in the fourth line after “from” through but 

not including “purportedly”; and quoted text in the fifth line.

d. Paragraph 149: Quoted text in the third line and the image on

page 38.

e. Paragraph 150: Text in the fourth line after “revised” through 

the end of that sentence ending on the fourth line. 

f. Paragraph 157: The images on pages 40 and 41.

3. For the avoidance of doubt, except as set forth in paragraphs 2(a) to 

2(f) above, the redactions in paragraphs 121, 146-151, and 157 must be lifted.

4. A revised public version of the Complaint consistent with this Order 

shall be filed within five business days.

 /s/ Lori W. Will 

 Lori W. Will

 Vice Chancellor