Court Opinion

ID: 4698152
Source: CourtListenerOpinion
Date Created: 2021-06-24 12:02:39.535822+00
Date Added: 2024-06-11T08:05:51.362560
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

MACROPHAGE THERAPEUTICS, INC., )
a Delaware corporation,             )
                                    )
                        Plaintiff,  )
                                    )
              v.                    )          C.A. No. 2019-0137-JRS
                                    )
MICHAEL M. GOLDBERG, M.D., and      )
M1M2 THERAPEUTICS, INC.,            )
                                    )
                        Defendants. )

                        MEMORANDUM OPINION

                       Date Submitted: March 16, 2021
                        Date Decided: June 23, 2021

Richard P. Rollo, Esquire, Sarah A. Clark, Esquire and Angela Lam, Esquire of
Richards, Layton & Finger, P.A., Wilmington, Delaware; Barry M. Kazan, Esquire
of Mintz & Gold LLP, New York, New York; and Faith Charles, Esquire of
Thompson Hine LLP, New York, New York, Attorneys for Plaintiff.

R. Karl Hill, Esquire of Seitz, Van Ogtrop & Green, P.A., Wilmington, Delaware
and Gregory Zimmer, Esquire of New York, New York, Attorneys for Defendants.

SLIGHTS, Vice Chancellor
      While Delaware’s contractarian proclivities encourage parties to control their

contractual outcomes through private ordering, that control does not extend to the

remedies a party may invoke when a perceived breach has occurred. In instances

where one party believes the other has breached the contract, that party can

acquiesce, stop performing and sue for total breach or continue performing and sue

for partial breach. What he cannot do, however, is engage in extra-contractual self-

help. Yet, that is precisely what the defendants in this action did when they surmised

the plaintiff and others had breached contractual obligations owing to them. The

self-help was unjustified and the defendants must be held accountable.

      In 2015, Macrophage Therapeutics, Inc. (“Macrophage” or the “Company”)

was formed as a wholly owned subsidiary of Navidea Biopharmaceuticals, Inc.

(“Navidea”) for the purpose of developing therapeutic uses for Navidea’s diagnostic

products. In 2018, while Defendant, Michael M. Goldberg, M.D., served as director

and CEO of Navidea, he collaborated with Navidea’s board of directors to separate

Macrophage from Navidea’s control in order to attract investors in Macrophage.

While Navidea was engaged in developing products to diagnose certain severe

diseases, the goal of Macrophage was to find ways to use Navidea’s intellectual

property to treat those diseases in an effective manner. All parties agreed that

Macrophage’s growth would best be served by a structure that allowed Macrophage

                                          1
to project to potential investors its independence from Navidea notwithstanding

Navidea’s sole ownership of Macrophage’s common stock.

      The parties’ collaboration resulted in the execution of an agreement dated

August 14, 2018 (the “August Agreement”) whereby the parties expressed their

intent to reach agreements that would create space between Navidea and

Macrophage. Under the August Agreement, Dr. Goldberg would resign from his

positions at Navidea and become the full-time CEO of Macrophage. The parties

would also reach and prepare definitive agreements granting Dr. Goldberg a 5%

economic stake in, and voting control of, Macrophage in exchange for the surrender

of his preferred shares of Macrophage.

      After execution of the August Agreement, the parties’ efforts to negotiate

definitive implementing agreements stalled and Dr. Goldberg became impatient.

Rather than exercising his legal rights to enforce the contract, such as they were,

Dr. Goldberg took matters into his own hands. He engaged in a series of conflicted

transactions, unilaterally, to effectuate what he believed he was owed under the

August Agreement. He created Defendant, M1M2 Therapeutics, Inc. (“M1M2”),

transferred Macrophage’s prized asset (the sub-license Navidea provided to

Macrophage to perform its work) to M1M2, granted himself the 5% economic

interest in M1M2 he believed he was meant to have in Macrophage and then gave

himself immediate voting control of M1M2 (the “Challenged Transactions”).

                                         2
Dr. Goldberg engaged in the Challenged Transactions with no notice to Navidea or

other stakeholders and with virtually no expert legal or financial advice.

       Upon discovering the Challenged Transactions, Macrophage initiated this

action against Dr. Goldberg and M1M2 alleging breaches of fiduciary duty,

conversion and violations of Section 271 of the Delaware General Corporation Law

(“Section 271”) arising from Dr. Goldberg’s unilateral and unauthorized transfer of

Macrophage’s prized asset to himself. 1 Following claim dispositive rulings of the

Court on summary judgment, described below, this post-trial opinion focuses on the

fiduciary duty and conversion claims.

       Starting with the fiduciary duty claim, Macrophage argues that Dr. Goldberg,

as a fiduciary, stood on both sides of the Challenged Transactions, thus triggering

entire fairness review. This is not hotly disputed. Macrophage then argues that

because the process and price were wholly unfair, Dr. Goldberg violated his duty of

loyalty to Macrophage. In response, Dr. Goldberg argues that while the process

leading to the Challenged Transactions may have been less than ideal, Macrophage

1
   The Section 271 claim alleged that Dr. Goldberg caused Macrophage to transfer
substantially all of its assets to M1M2 without the approval of the Macrophage board of
directors or stockholders. See 8 Del. C. § 271(a) (“Every corporation may at any meeting
of its board of directors or governing body sell, lease or exchange all or substantially all of
its . . . assets . . . upon such terms and conditions and for such consideration . . . as its board
of directors or governing body deems expedient and for the best interests of the corporation,
when and as authorized by a resolution adopted by the holders of a majority of the
outstanding stock of the corporation entitled to vote thereon . . . .”).

                                                3
received everything it bargained for in the August Agreement, thus demonstrating

an abundantly fair price.

      For reasons explained, Dr. Goldberg has failed to meet his entire fairness

burden, mainly as relates to fair price, since he failed to prove that he paid any

meaningful consideration in connection with the Challenged Transactions.

Moreover, I reject Dr. Goldberg’s unclean hands defense to the fiduciary duty claim.

For reasons explained below, Dr. Goldberg has fallen well short of presenting the

kind of facts that would support that exceptional defense.

      With that said, Macrophage failed to prove anything more than nominal

damages resulting from Dr. Goldberg’s fiduciary duty breaches. The Challenged

Transactions were unwound before any real harm was done. And, contrary to

Macrophage’s assertion, Dr. Goldberg’s self-help and resulting breach of fiduciary

duties are not of a nature or gravity that would justify shifting attorneys’ fees.

      Finally, as for Macrophage’s claim that Dr. Goldberg converted certain

Macrophage intellectual property in the Challenged Transactions, that claim fails for

a simple reason. The evidence reveals that, to the extent Dr. Goldberg ever

possessed any Macrophage IP, that IP and any other allegedly converted property

have already been returned to Macrophage.

                                           4
          In all, Macrophage is left with a declaration that Dr. Goldberg breached his

fiduciary duty of loyalty through the Challenged Transactions. The remedy for the

breach is an award of nominal damages in the amount of $1.00.

                                   I. BACKGROUND

          The facts are drawn from the parties’ pretrial stipulation and evidence

admitted at trial. The trial record consists of ten lodged depositions, 162 joint trial

exhibits and testimony given during a three-day trial. The following facts were

proven by a preponderance of the competent evidence. 2

      A. Parties and Relevant Non-Parties

          Plaintiff, Macrophage, is a Delaware corporation that operates as a wholly

owned subsidiary of Navidea.3

          Non-party, Navidea, is also a Delaware corporation.4 Navidea trades on the

New York Stock Exchange and is in the business of developing medical diagnostic

and imaging products principally utilizing certain intellectual property licensed from

the University of California San Diego (“UCSD”).5

2
 I cite to the Joint Pre-Trial Stipulation and Order as “PTO ¶ __,” the joint trial exhibits as
“JX ___,” the trial transcript as “Tr. __ (witness name)” and depositions lodged as evidence
as “(Name) Dep. __.”
3
    PTO ¶¶ 13–15.
4
    Id. ¶ 24.
5
    Id.

                                              5
          Defendant, Dr. Goldberg, was CEO of Navidea from September 2016 until

August 14, 2018, and served as a member of the Navidea board of directors

(the “Navidea Board”) from November 2013 until August 14, 2018.6 Until his

termination from the position on February 20, 2019, Dr. Goldberg served as CEO of

Macrophage. 7        He still holds his seat on the Macrophage board of directors

(the “Macrophage Board”).8

          Defendant, M1M2, was a Delaware corporation created by Dr. Goldberg on

February 4, 2019. 9 This Court declared the creation of M1M2 null and void ab initio

in a summary judgment ruling delivered on June 12, 2019.10

          Non-party, Platinum-Montaur Life Sciences, LLC (“Platinum-Montaur”),

a Delaware limited liability company, is a preferred stockholder of Macrophage.11

6
    Id. ¶ 26.
7
    Id. ¶¶ 26, 44.
8
    Id. ¶ 26.
9
    Id. ¶ 27.
10
  Id.; Macrophage Therapeutics, Inc. v. Goldberg, C.A. 2019-0137-JRS at 5 (Del. Ch.
June 12, 2019) (D.I. 92) (TRANSCRIPT) (“Summary Judgment Op.”).
11
     PTO ¶ 28; JX 3 (“SPA”).

                                           6
         Non-party, Dr. Claudine Bruck, has been a member of the Navidea Board

since February 2018. She was appointed by Navidea to serve as one of its two

representatives on the Macrophage Board on November 29, 2018. 12

         Non-party, Michael Rice, is the current chairman of the Navidea Board. He

was appointed by Navidea to serve as one of its two representatives on the

Macrophage Board on November 29, 2018. 13

         Non-party, Jed Latkin, was CFO of Navidea until August 14, 2018. Following

Dr. Goldberg’s resignation as Navidea’s CEO in August 2018, Latkin assumed that

role and has served in it since.14 Following Dr. Goldberg’s termination from

Macrophage on February 20, 2019, Mr. Latkin also became CEO of Macrophage.15

      B. The Creation of Macrophage

         Prior to the creation of Macrophage, Dr. Goldberg, acting as CEO of Navidea,

realized that the intellectual property licensed from UCSD (the “Licensed IP”)

12
     JX 57; Tr. 630:13–15 (Bruck); id. at 640:4–643:1 (Bruck).
13
   JX 57; Tr. 702:24–703:3 (Rice). After the trial of this matter, Dr. Goldberg filed a
separate action in this Court challenging the appointments of Dr. Bruck and Mr. Rice to
the Macrophage Board. Goldberg v. Bruck, et al., C.A. No. 2020-1058-JRS. By opinion
issued today, the Court granted a motion to dismiss this challenge on the ground that the
appointments were authorized by the clear and unambiguous language of Macrophage’s
Certificate of Incorporation and Bylaws. Goldberg v. Bruck, et al., C.A. No. 2020-1058-
JRS (Del. Ch. June 23, 2021) (D.I. 25) (Opinion) (“Macrophage 225 Opinion”).
14
     Tr. 42:14–21 (Latkin).
15
     Id. at 120:4–7 (Latkin).

                                              7
permitted only diagnostic applications, not therapeutic applications. 16 Upon this

realization, he acquired the therapeutic license on behalf of Navidea.17 Macrophage,

incorporated on January 23, 2015, was created to develop the therapeutic

applications of Navidea’s Licensed IP. 18 Where Navidea’s focus was to exploit the

Licensed IP to diagnose certain diseases, the plan for Macrophage was that it would

focus on exploiting the Licensed IP to facilitate the treatment of those same diseases,

and perhaps others.19

           On March 11, 2015, Navidea granted Macrophage an exclusive license to use

the Licensed IP through a sub-license agreement (the “Navidea Sub-License

Agreement”).20 The Navidea Sub-License Agreement granted Macrophage the right

to utilize the Licensed IP for therapeutic purposes (the “Navidea Sub-License”)

in exchange for 100% of the common stock of Macrophage.21 On the other hand,

it prohibited Navidea from using any of Macrophage’s inventions or improvements

16
     Id. at 330:15–331:1 (Goldberg).
17
     Id.
18
     PTO ¶¶ 14–15.
19
     Tr. 15:9–19 (Latkin).
20
     PTO ¶ 25; JX 4 (“Navidea Sub-License”) at Recitals, § 2.1(a).
21
  Navidea Sub-License at Recitals (“In consideration for the rights granted to
[Macrophage] herein, [Macrophage] grants to [Navidea] 100% of the stock in
[Macrophage].”).

                                              8
in therapeutics. 22 Navidea was authorized to terminate the Navidea Sub-License if,

among other reasons, Macrophage became insolvent.23 By its terms, the termination

of the Navidea Sub-License Agreement triggers Macrophage’s obligation to

terminate its work under the Navidea Sub-License in a timely manner. 24

           On the same day the Navidea Sub-License Agreement was executed,

Dr. Goldberg, Platinum-Montaur, with whom Dr. Goldberg had a long history, and

Macrophage executed a Securities Purchase Agreement (“SPA”).25                 The SPA

granted Dr. Goldberg and Platinum-Montaur certain preferred stock in Macrophage

in return for Platinum-Montaur’s pledge to invest at least $500,000 in Macrophage.26

As part of the agreement, the Macrophage Board was set at three members, with

Dr. Goldberg appointed as Platinum-Montaur’s sole representative. 27 The SPA

provided that Navidea was to appoint the other two board members.28 As a result of

22
     Id. §§ 2.4–2.5.
23
     Id. § 8.1(b).
24
     Id. § 8.4(a).
25
     SPA.
26
   Id. § 2.1(f). The value of Dr. Goldberg’s preferred shares granted in the SPA on an as-
converted basis represents .04% of the outstanding capital stock of Macrophage, increasing
to .08% if fully diluted. Tr. 218:15–219:10 (Latkin).
27
     SPA § 5.6(a).
28
     Id.

                                            9
the Navidea Sub-License and SPA, Navidea held 100% of Macrophage’s common

stock, representing approximately 99.9% of Macrophage’s outstanding common

stock on an as-converted basis.29

      C. The August Agreement

         In June 2018, Rice, on behalf of Navidea, facilitated several introductions

between Dr. Goldberg, on behalf of Macrophage, and potential investors in the hopes

that Macrophage would secure investments for its various therapeutics projects.30

None of the introductions panned out.31 Some of the investor prospects expressed

concern that Navidea’s control over Macrophage made Macrophage less attractive.32

With this in mind, Navidea and Dr. Goldberg agreed they should take steps to

separate Navidea’s control over Macrophage to increase the chances of a significant

outside investment.33 This was born out of a recognition that, among other things,

(1) most investors were likely well-versed in either diagnostics or therapeutics but

29
     Tr. 18:17–19 (Latkin).
30
     Id. at 29:7–12 (Latkin); id. at 704:23–705:20 (Rice).
31
  Id. at 706:1–4 (Rice); id. at 480:9–10 (Goldberg) (“There were no investments in
Macrophage.”).
32
   Id. at 358:11–23 (Goldberg) (explaining how potential investors would report: “I’m not
interested in imaging. How do I know where the money is going to go? Who is going to
control it? Who is in control? You are in control of both[?] That doesn’t make any sense”).
33
   Id. at 706:11–14 (Rice) (“[W]hat we tried to figure out here is . . . how we can help him
raise capital. And, ultimately, that led to the separation of the two companies.”).

                                               10
not both; (2) Dr. Goldberg dedicating 100% of his time to therapeutics would breed

investor confidence; and (3) if an investor was only interested in therapeutics, that

investor would be more inclined to commit to Macrophage if it was confident

Navidea could not seize Macrophage funds in service of its diagnostics business.34

          Navidea appointed Dr. Bruck and Mr. Rice to a special committee

(the “Special Committee”) to negotiate with Dr. Goldberg a practical (but not actual)

separation of Macrophage from Navidea. 35 The Special Committee, advised by its

legal counsel, William Mower, with input from Navidea’s then CFO, Jed Latkin,

came up with a framework whereby Dr. Goldberg would (1) resign as CEO of

Navidea to demonstrate his commitment to Macrophage; (2) take over the day-to-

day management of Macrophage; (3) receive a more tangible ownership stake in

Macrophage; and (4) control voting rights with respect to Macrophage.36

         Discussions between the Special Committee and Dr. Goldberg eventually led

to the execution of the August Agreement on August 14, 2018.37 The August

Agreement was a preliminary agreement that expressly contemplated future

definitive agreements whereby Dr. Goldberg would (1) be issued 23.5 million shares

34
     Id. at 35:14–36:3 (Latkin); id. at 358:11–23 (Goldberg); id. at 706:15–707:11 (Rice).
35
     JX 25.
36
     Tr. 30:10–18 (Latkin); JX 37 (“August Agreement”).
37
     PTO ¶ 29; August Agreement.

                                              11
of Navidea common stock, (2) be granted 5% of Macrophage’s common stock with

super voting rights giving him control of Macrophage, (3) be provided nearly

$1 million in severance payments from Navidea post-closing and (4) give up his

Macrophage preferred stock. 38 Macrophage would also receive a line of credit from

Navidea not to exceed $750,000 for certain working capital expenses.39 For its part,

Navidea would be permitted to appoint one observer to the Macrophage Board. 40

           The August Agreement contemplated that certain “Transaction Documents”

would be executed at some time in the future to effectuate a final transaction

substantially similar to the terms set forth in the August Agreement.41 Nevertheless,

Dr. Goldberg agreed to resign from his position as director and CEO of Navidea

effective as of the date of execution of the August Agreement.42

           The August Agreement was executed by Dr. Goldberg for himself and

Macrophage and Mr. Latkin for Navidea. 43 Throughout the process of negotiating

38
     August Agreement.
39
     Id.
40
     Id.
41
     Id.
42
     Id.; JX 31.
43
     August Agreement.

                                          12
the August Agreement, the Special Committee was represented by Mr. Mower.44

Dr. Goldberg, a non-lawyer, represented himself and Macrophage. 45 Dr. Goldberg’s

decision to forego legal counsel in the negotiation of the August Agreement is

surprising since, on June 18, 2018, in his capacity as Macrophage CEO, he retained

the Israeli law firm, Meitar Liquornik Geva Leshem Tal (“Meitar”), to serve as

Company counsel. 46

      D. Negotiations Stall Following the August Agreement

         In September 2018, Navidea’s counsel, Mr. Mower, sent draft implementing

agreements to Dr. Goldberg.47 Negotiations stalled when, in mid-October, Navidea

informed Dr. Goldberg that an issue had arisen with the New York Stock Exchange

regarding the 23.5 million Navidea shares that were to be issued to Dr. Goldberg.48

By late September, Navidea expressed to Dr. Goldberg that it was reluctant to

execute implementing agreements because Dr. Goldberg still had not positioned

Macrophage to operate independently from Navidea. For example, Dr. Goldberg

44
     Tr. 787:8–10 (Mower).
45
     Tr. 483:1–9 (Goldberg).
46
   JX 21; JX 22; Tr. 485:10–486:15 (Goldberg). Meitar stepped in to represent
Dr. Goldberg in a discreet capacity after the August Agreement was executed. Tr. 486:5–
15 (Goldberg).
47
     JX 41.
48
     Tr. 428:9–429:17 (Goldberg).

                                          13
had not organized a management team, nor had he established a bank account in

Macrophage’s name so that it could receive proceeds from the $750,000 line of

credit contemplated in the August Agreement. 49 Navidea’s reluctance intensified

when it learned that Dr. Goldberg had hired a consultant, J. Thelander Consulting,

to evaluate the compensation Dr. Goldberg should be paid as CEO of Macrophage.50

Navidea questioned the need for, and propriety of, this engagement given that the

August Agreement plainly addressed the compensation Dr. Goldberg was to be

paid.51

      E. The November Macrophage Board Meeting

         By November 2018, Dr. Goldberg had grown impatient with Navidea’s

stalling.52 The frustration came to a head on November 21, 2018, when Dr. Goldberg

called a meeting of the Macrophage Board to discuss his plans for the Company.53

49
     Tr. 47:17–48:12 (Latkin); id. at 207:15–208:6 (Latkin).
50
     Id. at 47:5–16 (Latkin).
51
 See id.; see also August Agreement (providing Dr. Goldberg an economic stake in
Macrophage, super voting rights and $978,000 in severance, but notably, making no
mention of his post-closing compensation except to say that “Goldberg releases . . . any
and all claims . . . including but not limited to claims for any compensation”).
52
     JX 54.
53
  Id. At this time, Dr. Greene and Dr. Goldberg were the only Macrophage directors, with
Alec Goldberg attending the November 21 meeting as an observer. Id.; Tr. 501:3–6
(Goldberg).

                                              14
The meeting was attended by his son, Alec Goldberg, and Dr. Mark Greene.54

According to the draft minutes of the meeting, Dr. Goldberg reported to his son and

Dr. Greene that: (1) “he ha[d] sold his relevant IP to a partnership of his 4 children

who have each individually assigned certain IP rights to the partnership as well”;

(2) the partnership would “license on an exclusive basis all relevant IP to

[Macrophage] . . . in return for 20% of the equity in Macrophage”; (3) Macrophage

will ultimately “license its IP to the Partnership for all therapeutic areas not covered

by the license from the partnership to [Macrophage]”; and (4) Macrophage would

“fill [its] open board seat . . . with Alec Goldberg . . . effective immediately.55

Dr. Goldberg also purported to: (1) issue Macrophage shares to himself, his family

and Dr. Greene, (2) convert his Macrophage preferred shares into 5% of Macrophage

common stock with super voting rights and (3) grant Dr. Greene convertible

preferred stock.56 Once implemented, these measures would have left Navidea with

52% of Macrophage’s common stock and loss of control. 57

           While the draft minutes of the November 21 meeting suggest that

Dr. Goldberg had already taken several of the actions he described during the

54
     JX 54.
55
     Id.
56
     Id.
57
     Id.

                                          15
meeting, it does not appear that any of the actions actually occurred.58 Indeed,

according to Mr. Latkin, from Navidea’s perspective, there is no evidence that

Dr. Goldberg ever took steps to execute on the plan he outlined on November 21.59

And the record contains no evidence of what “IP” Dr. Goldberg was referring to

when he mentioned that he and his children had sold or assigned IP to “a

partnership,” even though Dr. Goldberg’s counsel reaffirmed the existence of

Dr. Goldberg’s IP in a December 18, 2018 letter to Navidea.60

      F. Dr. Bruck and Mr. Rice’s Appointments to the Macrophage Board

         Even though Navidea owned all of Macrophage’s common stock,

Dr. Goldberg did not apprise Navidea of his plans to restructure Macrophage and

58
     Tr. 443:4–20 (Goldberg).
59
   Id. at 264:14–265:6 (Latkin) (expressing his belief, regarding the implementation of
actions contemplated at the November 21 Macrophage Board meeting, that he “do[es] not
think that has happened”).
60
   JX 54 (“[Dr. Goldberg] informed the board that he has sold his relevant IP to a
partnership of his 4 children.”); JX 62 (“Upon reviewing the matter from . . . Dr. Goldberg’s
position as the owner of certain intellectual property necessary for Macrophage
to succeed. . . .”); Tr. 392:8–10 (Goldberg); id. at 614:17–615:14 (Goldberg).
Dr. Goldberg’s unwillingness to explain specifically what IP he purportedly “sold,” or
what IP he possessed that was “necessary for Macrophage to succeed,” ultimately
diminished his overall credibility. Tr. 498:21–499:1 (Goldberg) (addressing whether he
knew what IP was sold, he noted “I actually thought about this since my deposition. I have
an idea. I have a guess, but I have no records that confirm it”); id. at 500:14–20 (Goldberg)
(“I’m pretty sure -- the timing, based on that, leads me to believe what it probably was
because that is . . . the biggest, most important IP that I personally have. So I would suggest
that that probably is what is was, but I don’t remember for sure.”).

                                              16
dilute Navidea.61 Nevertheless, Navidea had grown suspicious that Dr. Goldberg

might engage in self-dealing. 62 Accordingly, on November 29, 2018, Navidea

executed a written consent as authorized by Macrophage’s governing documents

(1) removing every director from the Macrophage Board other than Dr. Goldberg

and (2) appointing Dr. Bruck and Mr. Rice to the Macrophage Board. 63

      G. The Creation of M1M2 and Purported Transfer of the Navidea Sub-
         License

         While Dr. Goldberg apparently elected not to implement the plan he

blueprinted at the November 21 Macrophage Board meeting, his desire to remedy

his disagreements with Navidea through self-help remained. Unbeknownst to

Navidea, on February 4, 2019, Dr. Goldberg formed M1M2 as a Delaware

corporation.64 M1M2’s certificate of incorporation authorized the issuance of

“95 shares of Common Stock” and “5 shares of Super Voting Common Stock.”65

61
  Tr. 563:2–15 (Goldberg) (illustrating Dr. Goldberg’s lack of consent from anyone at
Navidea regarding a restructuring of Macrophage).
62
     Tr. 640:16–641:17 (Bruck).
63
  JX 57; Tr. 640:4–643:1 (Bruck). As noted, the Court rejected Dr. Goldberg’s post-trial
challenges to these appointments in the Macrophage 225 Opinion.
64
     JX 66; PTO ¶ 36.
65
     JX 66.

                                          17
The “5 shares of Super Voting Common Stock” carried 20 votes per share, compared

to a single vote for each of the “95 shares of Common Stock.” 66

           The following day, on February 5, the two directors of newly formed M1M2,

Dr. Goldberg and Alec Goldberg, held M1M2’s first board meeting. The first order

of business was to elect Dr. Goldberg as CEO of M1M2.67 Next, the M1M2 board

approved two transactions that are at the heart of this dispute. In the first Challenged

Transaction, Dr. Goldberg, signing on behalf of both Macrophage and M1M2,

caused Macrophage to enter into a sub-license agreement with M1M2 (the “M1M2

Sub-License”).68 The M1M2 Sub-License granted M1M2 “an exclusive sub-license

to all rights, property and interests transferred from Navidea to [Macrophage]” under

the Navidea Sub-License Agreement in exchange for a grant to Macrophage of 100%

of the common stock of M1M2. 69 Consistent with his past practice, Dr. Goldberg

did not apprise Macrophage’s other stockholders, Navidea and Platinum-Montaur,

or the other Macrophage Board members, Dr. Bruck and Mr. Rice, that he had just

66
     Id.
67
     JX 69.
68
     JX 67.
69
     Id. ¶¶ 4, 6.

                                           18
transferred substantially all of Macrophage’s assets to an entity that he and his family

controlled.70

         In the second Challenged Transaction, Dr. Goldberg, again signing on behalf

of Macrophage, executed a “Unanimous Resolution of the Shareholders of M1M2,”

whereby Macrophage, as the sole common stockholder of M1M2, resolved “to issue

to Dr. Goldberg five (5) shares of M1M2 Super Voting Common Stock in order to

effectuate the satisfaction of [Macrophage’s] contractual obligations to Goldberg

under the August Agreement.”71 This created a structure where Dr. Goldberg

maintained a 5% economic interest in M1M2 but controlled 100 votes for his five

shares, compared to 95 votes controlled by Macrophage (and, indirectly, Navidea).72

In other words, Dr. Goldberg granted himself voting control of M1M2 and, by

extension, control of the Navidea Sub-License.

      H. Navidea Learns of the Challenged Transactions

         On the day after he executed the Challenged Transactions, February 6, 2019,

Dr. Goldberg emailed Dr. Bruck and Mr. Rice to notice a special meeting of the

70
  Tr. 467:23–468:1 (Goldberg); id. at 563: 4–24 (Goldberg); id. at 645:11–15 (Bruck);
JX 98.
71
  JX 68; see also PTO ¶ 38 (noting that the “Unanimous Resolution of the Shareholders
of M1M2” signed by Dr. Goldberg on behalf of Macrophage “caused M1M2 to issue to
Dr. Goldberg five (5) shares of M1M2 Super Voting Common Stock”).
72
     JX 68; JX 69.

                                          19
Macrophage Board to be held on February 11, 2019. 73 The purpose of the meeting,

per the notice, was to update the Macrophage Board “about actions/discussions

relating to bringing Macrophage into compliance with its obligations to Michael

Goldberg, M.D., under the terms of the August [] Agreement.” 74                  Because

Dr. Goldberg did not believe Dr. Bruck and Mr. Rice were duly appointed

Macrophage Board members, he invited them to attend as Macrophage Board

observers. 75

         At the February 11 Macrophage Board meeting, Dr. Goldberg informed

Dr. Bruck and Mr. Rice for the first time that he had formed M1M2, executed the

M1M2 Sub-License, and caused M1M2 to issue 95 shares of M1M2 common stock

to Macrophage and 5 shares of M1M2 super voting stock to himself.76 The

telephone “meeting” lasted less than five minutes; Dr. Goldberg walked through

what he had done and then hung up. 77

73
     PTO ¶ 39; JX 71.
74
     JX 71.
75
  Tr. 559: 6–15 (Goldberg) (“I was the only member of the board meeting. [Dr. Bruck
and Mr. Rice] were invited as observers to observe the meeting.”).
76
  PTO ¶ 40; Tr. 561: 3–8 (Goldberg); id. at 644:14–17 (Bruck) (noting that on the call
“Dr. Goldberg informed us of the creation of a new company that he had transferred the
assets of Macrophage Therapeutics to”); id. at 719:17–720:16 (Rice) (“He basically, at that
meeting, told us that he was moving the IP from Macrophage Therapeutics into a separate
company, a Newco essentially.”); Goldberg Dep. 81:19–88:3.
77
     Tr. 719:17–720:16 (Rice).

                                            20
         Later that day, Dr. Bruck, in her capacity as a Macrophage director, sent

Dr. Goldberg an email requesting certain information related to the Challenged

Transactions. 78 Dr. Goldberg responded on February 13, informing Dr. Bruck that

he would not comply with the request because he did not accept that Dr. Bruck was

a member of the Macrophage Board. 79 He did, however, allow that a Macrophage

shareholder, such as Navidea, could request the information and he would promptly

provide it. 80 Rather than contest the rejection, on February 14, Mr. Latkin, in his

capacity as CEO of Navidea, sent a letter to Dr. Goldberg demanding documents

related to the Challenged Transactions.81 Dr. Goldberg responded that Mr. Latkin

could inspect the documents by traveling from Navidea’s offices in Dublin, Ohio to

Dr. Goldberg’s lawyer’s offices in Hatfield, Pennsylvania, and thus ended Navidea’s

attempt to obtain documents related to the Challenged Transactions. 82

78
     JX 73; JX 74.
79
     JX 75.
80
  Id. (“If Navidea or you would like to request the documents in some format other than a
demand from a ‘Board Member of MT’, or designate an observer, or even request as a
shareholder of MT, the documents will be provided.”).
81
     JX 77.
82
   JX 80; Tr. 113:14–114:6 (Latkin) (noting his decision not to visit Dr. Goldberg’s
lawyer’s office was based on the belief that “it would just lead [him] on a wild goose
chase”).

                                           21
         On February 15, 2019, the Navidea Board met and, among other things,

discussed (1) terminating the Navidea Sub-License, (2) filing a lawsuit against

Dr. Goldberg and (3) recommending to the Macrophage Board that it consider

terminating Dr. Goldberg as Macrophage CEO and appointing Mr. Latkin in his

place. 83 On February 19, Mr. Latkin, in his capacity as CEO of Navidea, terminated

the Navidea Sub-License on the ground that Macrophage was insolvent.84 And, on

February 20, the Macrophage Board resolved to terminate Dr. Goldberg from his

position as CEO of Macrophage and appoint Mr. Latkin to fill the position.85 The

ground for termination was Dr. Goldberg’s attempt to consummate the Challenged

Transactions. 86 On the same day as Dr. Goldberg’s termination, Macrophage filed

this lawsuit.

83
     JX 155.
84
     JX 84.
85
     Tr. 119:4–7 (Latkin); PTO ¶ 44; JX 89.
86
   Tr. 119:8–19 (Latkin) (“He was terminated because of the self-dealing and the other
issues that had arisen over the last several weeks.”); id. at 649:6–13 (Bruck) (noting the
Macrophage Board determined that “Michael Goldberg was prepared to do things that
appeared very unlawful, that we could not leave him in that position and he had to be
replaced”); id. at 723:11–724:9 (Rice) (“[E]verybody was worried that there was
something going on, which obviously there was something going on.”).

                                              22
      I. Procedural History

         Macrophage filed its Complaint on February 20, 2019, followed by its

Amended Complaint on March 22, 2019.87 On February 22, 2019, Plaintiff moved

for a Status Quo Order. 88 Following oral argument on March 1, this Court entered

a Status Quo Order that differed from the order proffered by Dr. Goldberg.89

Relevant here, the order provided that (1) the Macrophage Board shall consist of

Dr. Goldberg, Dr. Bruck and Mr. Rice and (2) Dr. Goldberg was barred, without

prior written authorization from the Macrophage Board, from: (a) “hold[ing] himself

out as the CEO of the Company”; (b) “hold[ing] himself out as having the authority

to act, or to authorize any action, on behalf of the Company . . . except through Board

action”; (c) “purport[ing] to act or authorize any action on behalf of the Company . . .

except as authorized by the Board”; “(d) transfer[ing], encumber[ing], exchang[ing],

expend[ing], pledg[ing], loan[ing], or otherwise dispos[ing] of, directly or indirectly,

any Company . . . asset”; and (e) “disparag[ing] the Company, Jed Latkin,

Joel Kaufman, or any other Board member in a communication with any

87
     D.I. 1; D.I. 36 (“Am. Compl.”); PTO ¶ 2.
88
     D.I. 12.
89
     D.I. 31 (“Status Quo Order”).

                                                23
(i) Company employee, independent contractor, partner, vendor, supplier, or

(ii) other person involved, directly or indirectly, with the Company.”90

         The Amended Complaint comprises six counts. Count I asserts a breach of

the duty of loyalty claim against Dr. Goldberg related to the Challenged

Transactions; Count II asserts a breach of the duty of care claim against Dr. Goldberg

related to the Challenged Transactions; Count III asserts a claim for conversion

against Dr. Goldberg related to the Challenged Transactions; Count IV asserts a

claim for declaratory judgment that the Challenged Transactions are null and void;

Count V asserts a claim for breach of fiduciary duty against Dr. Goldberg related to

Dr. Goldberg’s lack of disclosure of records to directors and stockholders of

Macrophage regarding the Challenged Transactions; and Count VI asserts

conversion against Dr. Goldberg related to his possession of certain of Macrophage’s

corporate documents. 91

         On April 12, 2019, Macrophage moved for summary judgment and

Defendants moved to dismiss or stay the Amended Complaint, and, on May 8, 2019,

Macrophage moved for an order finding Dr. Goldberg in contempt for violating the

Status Quo Order.92 On May 22, 2019, I heard argument on all three motions and,

90
     PTO ¶ 4; Status Quo Order ¶ 4.
91
     Am. Compl. ¶¶ 41–75.
92
     PTO ¶ 6; D.I. 45; D.I. 47; D.I. 60.

                                           24
at the conclusion of the hearing, denied Defendants’ motion to dismiss or stay and

granted Macrophage’s motion to hold Dr. Goldberg in contempt, while reserving

judgment on Macrophage’s motion for summary judgment. 93

         Defendants sought dismissal on the basis that the August Agreement includes

a forum selection clause declaring New York the exclusive forum to resolve

litigation arising out of the agreement.94 I rejected that argument upon concluding

the issues of whether the Challenged Transactions violated the Delaware General

Corporation Law, were products of breaches of fiduciary duty or resulted in

conversion did not depend on an interpretation or enforcement of the August

Agreement. 95

         Macrophage sought to hold Dr. Goldberg in contempt for violating the Status

Quo Order by failing to return Company property (namely a laptop, iPad Pro and

two iPhones), forwarding or deleting emails owned by Macrophage and disparaging

Macrophage’s employees (Mr. Latkin and Joel Kaufman) to third parties. 96 I granted

93
  Macrophage Therapeutics, Inc. v. Goldberg, C.A. 2019-0137-JRS (Del. Ch. May 22,
2019) (D.I. 105) (TRANSCRIPT) (“MTD and Contempt Op.”).
94
     Id. at 74–75.
95
  Id. at 77–78. The parties are actively litigating breach of contract claims associated with
the August Agreement in the United States District Court for the Southern District of New
York. PTO ¶ 29; In re Navidea Biopharmaceuticals, Inc., Case No. 1:19-cv-01578-VEC.
96
     MTD and Contempt Op. at 79.

                                             25
the motion, required Dr. Goldberg to return the devices in dispute and admonished

him not to disparage current management to customers and vendors during the

pendency of the litigation.97

         As for the motion for summary judgment, Macrophage sought judgment on

all of its claims, arguing that the Challenged Transactions were void as a matter of

law under Section 271, Dr. Goldberg had breached his fiduciary duties by engaging

in the Challenged Transactions and the Challenged Transactions resulted in the

unlawful conversion of Macrophage’s property.98 In a June 12, 2019 ruling, I denied

Macrophage’s motion for summary judgment as relates to the fiduciary duty and

conversion claims (Counts I–III and V–VI) because there were genuine issues of

material fact related to, among other things, the identity and ownership of certain of

the allegedly misappropriated property and the extent of Dr. Goldberg’s self-interest

in the Challenged Transactions. 99

         As for Count IV, however, I granted summary judgment upon concluding that

the Challenged Transactions violated Section 271 as a matter of law. Macrophage

argued that the unilateral transfer of the Navidea Sub-License from Macrophage to

M1M2 constituted a transfer of substantially all of Macrophage’s assets without

97
     Id. at 80–82.
98
     Summary Judgment Op. at 5.
99
     Id. at 13–14.

                                         26
proper approval.100 Dr. Goldberg argued that Section 271 did not apply to the

Challenged Transactions because (1) there was no transfer of substantially all of

Macrophage’s assets to M1M2, (2) Dr. Bruck’s and Mr. Rice’s approval was not

necessary and (3) the statute does not apply to transfers to wholly owned

subsidiaries.101 I rejected Dr. Goldberg’s arguments on several grounds.

            First, I determined that the undisputed facts revealed that “the assets

transferred to M1M2 through the M1M2 sublicense constitute all or substantially all

of Macrophage’s assets.”102 In this regard, I noted that the undisputed purpose of

Macrophage is to develop therapeutics utilizing the Navidea Sub-License and that

the sublicense was Macrophage’s “primary asset.”103 While Dr. Goldberg argued

the existence of other research projects might exceed the value of the Navidea Sub-

License, he failed to demonstrate any specific value for these projects and, in any

event, could not show that the projects did not depend upon the IP transferred under

the Navidea Sub-License.104

100
      Id. at 6–7.
101
      Id. at 6–13.
102
      Id. at 7.
103
      Id.
104
      Id. at 7–8.

                                           27
          Next, in response to Dr. Goldberg’s argument that he need not have obtained

approval from Dr. Bruck or Mr. Rice prior to initiating the Challenged Transactions

because neither were duly appointed members of the Macrophage Board,

I determined that, even assuming arguendo Dr. Goldberg was the sole Macrophage

Board member at the time of the Challenged Transactions, he failed to convene a

proper board meeting or obtain proper stockholder consent.105 And, finally, as to

whether M1M2 was a wholly-owned subsidiary, I determined that, given

Dr. Goldberg’s post-transaction control over M1M2 through the super voting stock,

M1M2 could not conceivably be classified as a wholly-owned subsidiary of

Navidea.106

          Having narrowed the issues, the Court convened a three-day trial from

December 1, 2020 through December 3, 2020. Trial focused on three key issues:

(1) whether Dr. Goldberg engaged in actionable wrongdoing in connection with the

Challenged Transactions as alleged by Macrophage; (2) whether Macrophage’s own

alleged wrongdoing should serve as a basis to deny it any recovery as a matter of

equity; and (3) whether Macrophage has proven damages resulting from

105
      Id. at 9.
106
      Id. at 9–12.

                                           28
Dr. Goldberg’s proven wrongdoing. Post-trial closing arguments were presented on

March 16, 2021, and the matter was submitted for decision that day. 107

                                    II. ANALYSIS

         Macrophage alleges Dr. Goldberg’s engagement in the Challenged

Transactions violated his fiduciary duties to Macrophage because he stood on both

sides of the transaction, engaged in self-dealing and did not prove that the

transactions were entirely fair.       The Challenged Transactions, coupled with

Dr. Goldberg’s alleged theft of Macrophage’s IP, documents and certain devices, are

also alleged to give rise to actionable conversion.

         Dr. Goldberg resists Macrophage’s claims, arguing: (1) the Challenged

Transactions were entirely fair since they simply mirrored the terms of the August

Agreement; (2) the doctrine of unclean hands precludes Macrophage from recovery;

and (3) in any event, Macrophage failed to prove any damages.

         I start by briefly addressing Dr. Goldberg’s attempt to reargue post-trial this

Court’s prior summary judgment determination that the Challenged Transactions

transferred substantially all of Macrophage’s assets to M1M2. I then evaluate

Macrophage’s fiduciary duty claims through the lens of the applicable standard of

review, entire fairness. Upon finding that Macrophage has prevailed on its breach

107
      D.I. 212 (“Oral Arg. Tr.”).

                                            29
of fiduciary duty claims, I address Dr. Goldberg’s unclean hands defense and

reject it. Next, I consider Macrophage’s claimed damages and find that it has proven

entitlement to nothing more than nominal damages. I also address Macrophage’s

claim that it is entitled to payment of its attorneys’ fees. I find this argument without

merit. Finally, I address Macrophage’s conversion claims and find Macrophage has

either failed to meet the prima facie elements of conversion or failed to prove

damages.

      A. The Challenged Transactions Resulted in the Transfer of Substantially
         All of Macrophage’s Assets

         Dr. Goldberg seeks to relitigate the question of whether the Challenged

Transactions constituted a transfer of substantially all of Macrophage’s assets,

in violation of Section 271.         For good reason, Macrophage argues that

Dr. Goldberg’s grossly out of time request for reargument is barred for that reason

and barred by the law of the case doctrine because the factual landscape remains

unchanged since the Court granted summary judgment on that issue. I agree on both

fronts.

         A motion for reargument must be filed within five (5) days “after . . . the

receipt of the Court’s decision.”108 Dr. Goldberg’s attempt to reargue the Court’s

summary judgment opinion comes just shy of two years too late.

108
      Del. Ct. Ch. R. 59(f).

                                           30
         Moreover, “once a matter has been addressed in a procedurally appropriate

way by a court, it is generally held to be the law of that case and will not be disturbed

by that court unless compelling reason to do so appears.”109 In other words, “this

court may not change the law of the case when the material facts have remained

constant throughout the subsequent course of the same litigation.” 110

         Here, no “compelling reason” exists to revisit the Court’s ruling that the

Challenged Transactions violated Section 271 by transferring substantially all of

Macrophage’s assets to M1M2 without proper authorization.111 According to Dr.

Goldberg, new facts have emerged that demonstrate the following valuable

Macrophage “assets” were not transferred to M1M2 in the Challenged Transactions:

(1) hundreds of thousands of dollars in NIH funding, (2) a patent applied for by

Navidea in the field of therapeutics, (3) the balance of the $750,000 credit line and

(4) Macrophage’s ongoing research projects under the Navidea Sub-License. 112

109
   May v. Bigmar, Inc., 838 A.2d 285, 288 n.8 (Del. Ch. 2003) (internal quotations
omitted).
110
   T.V. Spano Bldg. Corp. v. Dep’t of Nat. Res. & Env’t Control, 1992 WL 1364297, at *1
(Del. Super. Ct. Sept. 3, 1992), aff’d, 628 A.2d 53 (Del. 1993); Kenton v. Kenton, 571 A.2d
778, 784 (Del. 1990) (same); see also Izquierdo v. Sills, 2004 WL 2290811, at *4 n.28
(Del. Ch. June 29, 2004) (“The law of the case doctrine applies as a constraint to
reconsideration of legal issues.”).
111
      See Summary Judgment Op. 6–12.
112
      Defs.’ Post-Trial Answering Br. (“AB”) (D.I. 198) at 28.

                                              31
         Contrary to Dr. Goldberg’s assertions, the material facts have remained

constant between this Court’s summary judgment ruling and trial. At the threshold,

the absence of any evidence regarding the value of these newly identified

Macrophage “assets” relative to the Navidea Sub-License is fatal to Dr. Goldberg’s

effort to reargue the summary judgment ruling.113            The Court determined on

undisputed evidence that the Navidea Sub-License was Macrophage’s “primary

asset,” and nothing presented at trial undermines that conclusion. 114

         Moreover, each supposed newly discovered asset is either clearly not a

Macrophage asset, not a newly identified asset or not an asset separate and apart

from the Navidea Sub-License. Starting with NIH funding, this was a grant held in

the name of Navidea for the life of the grant, and Dr. Goldberg has not even hinted

that he ever understood this to be part of Macrophage. 115 And, to the extent any part

of the NIH grant that was dedicated to therapeutics work was actually a Macrophage

asset, it only became a Macrophage asset under the Navidea Sub-License that

113
   T.V. Spano, 1992 WL 1364297, at *1 (finding that while the facts presented may have
been slightly different than relied upon, there was no demonstrated “change in the material
facts”).
114
      Summary Judgment Op. at 7.
115
   Tr. 131:18–132:2 (Latkin) (“[W]e also informed [Dr. Goldberg] that the NIH grant was
in Navidea’s name.”).

                                            32
Dr. Goldberg purported to transfer to M1M2. 116 Similarly, the disputed patent was

a patent filed in Navidea’s name in March 2019 and, again, was either a Navidea

asset or became a Macrophage asset only because of the Navidea Sub-License.117

As for the remaining balance on the $750,000 line of credit to be extended under the

August Agreement, the existence of that facility was not a fact discovered after this

Court’s summary judgment ruling. Dr. Goldberg knew of the line of credit, such as

it was, as of the date of the August Agreement, and yet he did not proffer that line

of credit as a Macrophage asset that somehow diluted the value or importance of the

Navidea Sub-License he purported to transfer to M1M2 until well after summary

judgment.118 In any event, a line of credit can hardly be classified as an asset; it is

unquestionably debt. 119 Finally, as relates to Macrophage’s ongoing research, the

Court rejected this as a separate asset in its summary judgment ruling and

Dr. Goldberg has proffered no legitimate reason to revisit that issue.120

116
      Id.
117
      Tr. 153:5–18 (Latkin).
118
      JX 65.
119
    Henke v. Trilithic Inc., 2005 WL 2899677, at *10 (Del. Ch. Oct. 28, 2005) (classifying
a line of credit as debt).
120
   Summary Judgment Op. at 8 (“[D]efendants now resort to arguing that outstanding
Macrophage research projects have the potential to create value that exceeds the sublicense.
But any value from these projects is speculative, and, as plaintiff points out, likely
dependent upon the intellectual property that is the subject of the sublicense.”).

                                            33
        Thus, the law of the case is that the Challenged Transactions violated

Section 271. Dr. Goldberg has not demonstrated any changes of material fact since

that ruling that would justify a determination that the Navidea Sub-License

constituted anything but substantially all of Macrophage’s assets.

      B. The Fiduciary Duty Claims

        Macrophage argues Dr. Goldberg breached his fiduciary duties of loyalty and

care by executing the Challenged Transactions (1) while standing on both sides,

(2) without informing the rest of the Macrophage Board or stockholders in a timely

manner and (3) without any sufficient legal advice or representation, at least in his

roles as Macrophage’s CEO and a Macrophage director. 121 As discussed below, a

finding that Dr. Goldberg stood on both sides of the Challenged Transactions, as a

conflicted fiduciary, mandates that Dr. Goldberg prove the Challenged Transactions

were entirely fair. He has not carried that burden.

121
   Macrophage, in essence, acknowledges that its claim for breach of fiduciary duty arising
from Dr. Goldberg’s failure to produce records relating to the Challenged Transactions
(Count V) is moot since it has obtained those records during the course of this litigation.
JX 66; JX 67; JX 68; JX 69; see generally OB (focusing its fiduciary duty claims on the
Challenged Transactions themselves rather than failure to produce documents related to
the Challenged Transactions).

                                            34
             Standard of Review

          “Directors of a Delaware corporation owe two fiduciary duties—care and

loyalty.”122 “The essence of a duty of loyalty claim is the assertion that a corporate

officer or director has misused power over corporate property or processes in order

to benefit himself rather than advance corporate purposes.” 123 “Most basically, the

duty of loyalty proscribes a fiduciary from any means of misappropriation of assets

entrusted to his management and supervision.”124 The fiduciary duty of care, on the

other hand, demands that corporate fiduciaries act in good faith and “consider all

material information reasonably available in making business decisions.”125

Of course, where, as here, the operative certificate of incorporation includes an

exculpation clause, as authorized by Section 102(b)(7) of the DGCL, directors are

122
      In re Orchard Enters., Inc. S’holder Litig., 88 A.3d 1, 32 (Del. Ch. 2014).
123
      Steiner v. Meyerson, 1995 WL 441999, at *2 (Del. Ch. July 19, 1995).
124
      U.S.W., Inc. v. Time Warner Inc., 1996 WL 307445, at *21 (Del. Ch. June 6, 1996).
125
    In re Walt Disney Co. Deriv. Litig., 907 A.2d 693, 747 (Del. Ch. 2005), aff’d,
906 A.2d 27 (Del. 2006) (quoting Brehm v. Eisner, 746 A.2d 244, 259 (Del. 2000))
(internal quotations omitted).

                                               35
shielded from monetary liability associated with any duty of care violation.126 Such

exculpation does not apply, however, to violations of the duty of loyalty.127

       The appropriate starting point for any analysis of alleged corporate director

misconduct is the business judgment rule.128            The business judgment rule is

“a presumption that in making a business decision the directors of a corporation

acted on an informed basis, in good faith and in the honest belief that the action taken

was in the best interests of the company.”129 It operates as “a rule of evidence that

126
    8 Del. C. § 102(b)(7); McPadden v. Sidhu, 964 A.2d 1262, 1273 (Del. Ch. 2008).
I recognize that this provision does not shield Dr. Goldberg from liability resulting from
duty of care violations in his capacity as a corporate officer. McPadden, 964 A.2d at 1275
(noting that 102(b)(7) protection is “only available to directors”). Because I find that
Dr. Goldberg breached his duty of loyalty and that the Challenged Transactions are not
entirely fair, I need not analyze whether Dr. Goldberg, as a corporate officer, breached his
duty of care. No separate relief is requested resulting from Dr. Goldberg’s duty of care
breaches.
127
    8 Del. C. § 102(b)(7) (prohibiting exculpation for a variety of faithless acts including
“(i) for any breach of the director’s duty of loyalty to the corporation or its stockholders;
(ii) for acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) under section 174 of this title; or (iv) for any transaction
from which the director derived an improper personal benefit”); In re Columbia Pipeline
Gp., Inc., 2021 WL 772562, at *53 (Del. Ch. Mar. 1, 2021) (“But because the Complaint
pleads a claim for breach of the duty of loyalty against Skaggs, he is not entitled to
exculpation.”).
128
    Wayne Cty. Emps.’ Ret. Sys. v. Corti, 2009 WL 2219260, at *10 (Del. Ch. July 24,
2009), aff’d, 996 A.2d 795 (Del. 2010) (“The appropriate starting place in evaluating
plaintiff’s fiduciary duty claims, however, is with the well-established presumption of the
business judgment rule . . . .”).
129
   Aronson v. Lewis, 473 A.2d 805, 812 (Del. 1984); see also Orman v. Cullman,
794 A.2d 5, 19–20 (Del. Ch. 2002) (same). I assume, as the parties have assumed, without
deciding, that the business judgment presumption applies to corporate officers in the same
manner it applies to corporate directors. But see Lyman Johnson, Unsettledness in
                                             36
places the initial burden of proof on the plaintiff.”130 A plaintiff can rebut the

business judgment presumption in a number of ways. Relevant here, “[i]f corporate

fiduciaries stand on both sides of a challenged transaction, an instance where the

directors’ loyalty has been called into question, the burden shifts to the fiduciaries

to demonstrate the ‘entire fairness’ of the transaction.” 131

         Dr. Goldberg has not meaningfully contested that he stood on both sides of

the Challenged Transactions or that entire fairness is the appropriate standard of

review. 132 The tacit concessions are well founded. Dr. Goldberg signed the M1M2

Sub-License on behalf of Macrophage and M1M2, purportedly as the CEO

(and perhaps as a director) of both companies.133 He also signed the Unanimous

Delaware Corporate Law: Business Judgment Rule, Corporate Purpose, 38 Del. J. Corp.
L. 405, 413 (2013) (“[I]t is not settled today whether in cases involving corporate officers,
judges will doctrinally deploy the business judgment rule in the same all-encompassing
manner that it has been used for corporate directors.”). Even if the presumption applies to
Dr. Goldberg as an officer, however, that presumption is still overcome by his stance on
both sides of the Challenged Transactions and the benefits he received from those
transactions at the expense of Macrophage stockholders.
130
   Emerald P’rs v. Berlin, 787 A.2d 85, 91 (Del. 2001) (quoting Cinerama, Inc. v.
Technicolor, Inc., 663 A.2d 1156, 1162 (Del. 1995)).
131
   Oliver v. Boston Univ., 2006 WL 1064169, at *18 (Del. Ch. Apr. 14, 2006) (internal
quotations omitted).
132
   Tr. 588:11–17 (Goldberg); id. at 589:8–9 (Goldberg) (“But you’re right. I was on both
sides, and I didn’t see any way around that.”); see also AB at 29 (assuming the application
of entire fairness).
133
      JX 67.

                                             37
Resolution of the Shareholders of M1M2 in his capacity as CEO and director of

Macrophage, M1M2’s only purported shareholder up to that point.134                These

documents permitted Dr. Goldberg to go from possessing as little as .04% of

Macrophage’s common stock on an as-converted bases to 5% of M1M2’s common

stock with full voting control. 135 This, in turn, gave Dr. Goldberg the exclusive right

to use and control Macrophage’s primary asset, the Navidea Sub-License.

Dr. Goldberg’s actions clearly implicate his duty of loyalty to Macrophage

stockholders; he acted as a director and officer for both Macrophage and M1M2 and

did so in a manner that directly benefited himself.136 These facts, alone, rebut the

business judgment presumption and require Dr. Goldberg to demonstrate that the

Challenged Transactions were entirely fair.

            Dr. Goldberg Failed to Prove the Challenged Transactions Were
            Entirely Fair

         “Entire fairness has two components: fair dealing and fair price. ‘Fair dealing’

focuses on the actual conduct of corporate fiduciaries in effecting a transaction, such

as its initiation, structure, and negotiation. ‘Fair price’ includes all relevant factors

134
      JX 68; PTO ¶ 38.
135
      JX 67; JX 68.
136
   Tr. 537:2–10 (Goldberg) (admitting to possessing a vested personal interest in the
Challenged Transactions).

                                            38
relating to the economic and financial considerations of the proposed transaction.”137

“[T]he test for fairness is not a bifurcated one as between fair dealing and price.

All aspects of the issue must be examined as a whole since the question is one of

entire fairness.”138

         The Challenged Transactions can principally be understood as Dr. Goldberg’s

attempt at self-help to achieve what he believed he was owed under the August

Agreement. “[I]t is black-letter law that when one party to a contract materially

breaches, the nonbreaching party has two options: it can terminate the agreement

and sue for total breach, or it can continue the contract and sue for partial breach.”139

“There is, however, no third option allowing the party claiming a breach to invoke

‘self-help’ and only perform those obligations it wishes to perform.”140

137
   Carlson v. Hallinan, 925 A.2d 506, 531 (Del. Ch. 2006) (internal quotations omitted).
Fair price is commonly characterized as the most important consideration in determining
the fairness of the transaction. See, e.g., Del. Open MRI Radiology Assocs., P.A. v. Kessler,
898 A.2d 290, 311 (Del. Ch. 2006) (“[T]he overriding consideration [in an entire fairness
review of a transaction] is whether the substantive terms of the transaction were fair.”).
138
      Weinberger v. UOP, Inc., 457 A.2d 701, 711 (Del. 1983).
139
    ESPN, Inc. v. Off. of Comm’r of Baseball, 76 F. Supp. 2d 383, 397 (S.D.N.Y. 1999);
see also Farnsworth, Contracts § 8.19 (3d ed.1999) (“Once a material breach has continued
long enough to be total, the injured party can choose either to terminate the contract and
claim damages for total breach, or not to terminate the contract and claim damages for
partial breach.”).
140
    ESPN, 76 F. Supp. 2d at 398; see also Gould v. Gould, 2012 WL 3291850, at *13
(Del. Ch. Aug. 14, 2012) (“Instead, Jerry engaged in self-help that has added significantly
to the complexity of this litigation. By not pursuing the appropriate avenues for relief
available to him and required by the orders of this Court and the directives of the Trustee,
Jerry acted improperly.”); Rockwell Automation, Inc. v Kall, 2004 WL 2965427, at *3
                                             39
Fundamentally, rather than pursue whatever claims he might have against Navidea

in court, Dr. Goldberg exploited the parties’ inability to come to terms on definitive

agreements implementing the August Agreement by surreptitiously removing

Navidea from the process and taking the Navidea Sub-License for his own. In doing

so, he failed to follow a fair process and ultimately failed to deliver a fair price in

breach of his duty of loyalty.

            a. Fair Process

         From the beginning, Dr. Goldberg had no regard for utilizing an effective

process to protect the rights of Macrophage’s stockholders. 141 This Court found in

its summary judgment ruling, and confirmed at trial, that Dr. Goldberg did not even

alert, much less attempt to obtain the approval of, either the two other members of

the Macrophage Board or the Macrophage stockholders before transferring valuable

Macrophage assets out of the entity for his own use.142 In fact, he did not tell anyone

(Del. Ch. Dec. 15, 2004) (discussing that self-help is not an appropriate means to enforce
perceived contractual rights or remedy perceived contractual breaches).
141
      Tr. 360:20–361:5 (Goldberg).
142
    Summary Judgment Op. at 9; Tr. 467:23–468:1 (Goldberg); id. at 563: 4–9 (Goldberg);
id. at 645:11–15 (Bruck); JX 98.

                                           40
outside of his circle about the Challenged Transactions until six days after he

executed them.143

         Dr. Goldberg maintains he was not obliged to advise or seek approval from

Dr. Bruck or Mr. Rice because neither was a duly appointed member of the

Macrophage Board.144 Setting aside the fact that this Court has found, as a matter

of law, that Dr. Bruck and Mr. Rice were properly appointed to the Macrophage

Board, 145 the fact remains that Dr. Goldberg purported to approve the Challenged

Transactions without even convening a Macrophage Board meeting, presumably

because he knew that any notice of a meeting would alert an already suspicious

Navidea that Dr. Goldberg might be contemplating a self-dealing transaction. 146

         Apparently recognizing that the lack of process posed a problem for him,

Dr. Goldberg made a half-hearted attempt at trial to invoke advice of his personal

counsel as evidence of fair process, even though he acknowledged that Macrophage

143
   PTO ¶ 40; Tr. 561: 3–8 (Goldberg); id. at 644:14–645:15 (Bruck); id. at 719:17–720:16
(Rice); Goldberg Dep. 81:19–88:3.
144
      Summary Judgment Op. at 9; Tr. 559:6–15 (Goldberg); AB at 31.
145
      Macrophage 225 Opinion.
146
   Summary Judgment Op. at 9 (“But even if Dr. Goldberg were the sole voting member
of Macrophage’s board at the time of the challenged transactions, he was required to
convene a proper meeting of the board to obtain board approval and then was statutorily
required to obtain Navidea’s approval as a stockholder.”).

                                           41
was not represented by counsel in connection with the Challenged Transactions.147

In other words, in transactions orchestrated by the same individual acting as CEO of

both parties to the transactions, that CEO secured legal counsel for one party, M1M2,

but chose to leave the other party, Macrophage, unrepresented. 148             Under the

circumstances, it is not surprising there was no evidence the Challenged

Transactions were the product of any, much less meaningful, negotiations. Simply

stated, Dr. Goldberg failed to prove a fair process because the overwhelming

evidence revealed there was no process at all.

          b. Fair Price

      According to Dr. Goldberg, because the Challenged Transactions mimicked

the transactions contemplated by the August Agreement, Macrophage, by definition,

received a fair price.149 He testified his sole intent in effectuating the Challenged

Transactions “was to replicate as closely as possible the August Agreement with the

147
   Tr. 555:12–556:13 (Goldberg); see also JX 98 at ROG #7 (“Dr. Goldberg did not receive
any legal advice from any attorney in his capacity as the CEO of Macrophage, regarding
the formation of M1M2. No attorney acted on behalf of Macrophage in regard to the
formation of M1M2.”).
148
   Sealy Mattress Co. of New Jersey v. Sealy, Inc., 532 A.2d 1324, 1336 n.19 (Del. Ch.
1987) (holding that independent legal advice is one aspect in determining the fairness of a
particular dealing).
149
   AB at 30; In re S. Peru Copper Corp. S’holder Deriv. Litig., 52 A.3d 761, 788 (Del. Ch.
2011) (“Our Supreme Court has recognized, however, that, at least in non-fraudulent
transactions, ‘price may be the preponderant consideration . . . .’” (quoting Weinberger,
457 A.2d at 711)).

                                            42
exact same license as founded Macrophage.” 150 But even if effectuating the August

Agreement was an appropriate standard for evaluating fair price, which Macrophage

disputes, Dr. Goldberg has failed to prove that he engaged in a transaction that

duplicated what the parties would have agreed to had they ever been able to finalize

contracts implementing the August Agreement.

         To be sure, the August Agreement was an expression of intent that both parties

understood would have to be finalized in definitive agreements.151 When the

negotiation of those definitive agreements failed to move at the pace Dr. Goldberg

believed they should, he decided to take matters into his own hands by effectuating

the Challenged Transactions. To reiterate, through the Challenged Transactions,

Dr. Goldberg received a 5% economic interest and majority voting control of

M1M2, the entity that Dr. Goldberg created to control the exclusive rights to the

Navidea Sub-License, without providing any consideration.152 While the August

Agreement contemplated providing Dr. Goldberg an economic interest and majority

voting control in Macrophage, it did not contemplate that Dr. Goldberg could sweep

Navidea’s Licensed IP out of Macrophage into an entity controlled by Dr. Goldberg

in which Navidea had no interest, particularly when Dr. Goldberg gave up nothing

150
      Tr. 413: 13–20 (Goldberg).
151
      August Agreement.
152
      JX 66; PTO ¶ 36.

                                           43
in return for that new structure.153 The simple fact is that Navidea never agreed to

final terms with respect to the disposition of the Navidea Sub-License following the

August Agreement and there is absolutely no reason to believe it ever would have

agreed to the terms Dr. Goldberg negotiated for himself in the Challenged

Transactions.      Those terms were fundamentally unfair to Macrophage and its

stockholders (other than Dr. Goldberg).

            Unclean Hands

         Dr. Goldberg argues the Court should decline to enter a judgment against him

as a matter of equity because Macrophage comes to the Court with “unclean hands.”

As this court has oft-repeated, the doctrine of unclean hands rests on the maxim of

equity that “[he] who comes into equity must do so with clean hands.”154

The doctrine reflects “a rule of public policy [that] protect[s] the public and the court

against misuse by persons who, because of their conduct, have forfeited the right to

have their claims considered.”155 “The question raised by a plea of unclean hands is

153
   August Agreement. The August Agreement contemplates that Dr. Goldberg would
surrender his preferred shares in Macrophage in exchange for the grant of common stock
and control rights. Id. (“MT will redeem all shares of Goldberg’s MT Preferred Stock and
any warrants or other equity rights held by Goldberg in MT for no additional consideration
other than Goldberg’s rights in the Transaction.”). Yet, Dr. Goldberg presented no
evidence that he performed that aspect of the August Agreement. Tr. 538:18–540:12
(Goldberg).
154
      Kousi v. Sugahara, 1991 WL 248408, at *2 (Del. Ch. Nov. 21, 1991).
155
   Gallagher v. Holcomb & Salter, 1991 WL 158969, at *4 (Del. Ch. Aug. 16, 1991)
(Allen, C.); see also Skoglund v. Ormand Indus., Inc., 372 A.2d 204, 213 (Del. Ch. 1976)
                                            44
whether the plaintiff’s conduct is so offensive to the integrity of the court that his

claims should be denied, regardless of their merit.”156 While courts of equity possess

vast discretion when considering whether a plaintiff’s unclean hands should act as a

bar to relief, one hard and fast restraint is that “the plaintiff’s inequitable conduct

must have an ‘immediate and necessary’ relation to the claims for which the plaintiff

seeks relief.”157

         Dr. Goldberg asserts two purported instances of misconduct that justify a

finding of unclean hands. First, he argues that Mr. Latkin stripped Macrophage of

the Navidea Sub-License on February 19, 2019, a day prior to the filing of this

lawsuit, in an effort to avoid the August Agreement.158 This conduct can hardly be

classified as offensive, particularly given that the Navidea Sub-License Agreement

permitted Navidea to cancel the Navidea Sub-License if Macrophage became

(“[T]he purpose of the clean hands maxim is to protect the public and the court against
misuse by one who, because of his conduct, has forfeited his right to have the court consider
his claims, regardless of their merit. As such it is not a matter of defense to be applied on
behalf of a litigant; rather it is a rule of public policy.”).
156
      Gallagher, 1991 WL 158969, at *4.
157
    Kousi, 1991 WL 248408, at *2; Nakahara v. NS 1991 Am. Tr., 718 A.2d 518, 523
(Del. Ch. 1998); see also Portnoy v. Cyro–Cell Int’l, Inc., 940 A.2d 43, 80–81 (Del. Ch.
2008) (“The doctrine of unclean hands provides that a litigant who engages in reprehensible
conduct in relation to the matter in controversy . . . forfeits his right to have the court hear
his claim, regardless of its merit.” (internal quotations omitted)).
158
      AB at 43–44.

                                              45
insolvent (which it clearly was as of February 19, 2019).159 But even if the

termination of the Navidea Sub-License was offensive, that termination does not

have an “immediate and necessary” relation to Macrophage’s claims. The crux of

Macrophage’s allegations is that Dr. Goldberg participated in misconduct associated

with the Challenged Transactions, occurring on February 4–5, 2019.160

The termination of the Navidea Sub-License, occurring two weeks after

Dr. Goldberg’s misconduct, cannot conceivably be understood to relate to

Dr. Goldberg’s self-help and resulting breaches of fiduciary duty.

         Second, Dr. Goldberg argues this lawsuit is nothing more than a bad faith

effort to cause Dr. Goldberg to incur significant legal fees.161 That claim is frivolous.

Dr. Goldberg attempted to take for himself that which belonged to Macrophage.

In doing so, he breached his duty of loyalty to Macrophage stockholders.

Macrophage was absolutely justified in bringing this action to remedy (in this case

undo) the harm caused by Dr. Goldberg’s misconduct.162

159
   Navidea Sub-License § 8.1(b); JX 84. But see In re Rural/Metro Corp. S’holders Litig.,
102 A.3d 205, 238 (Del. Ch. 2014) (accepting the doctrine of unclean hands where
defendant made a showing of fraud).
160
      Am. Compl. ¶¶ 41–71.
161
      AB at 44.
162
    Feeley v. NHAOCG, LLC, 62 A.3d 649, 668 (Del. Ch. 2012) (“Breach of fiduciary duty
is an equitable claim, and it is a maxim of equity that equity regards substance rather than
form.” (internal quotations omitted)); Ravenswood Inv. Co., L.P. v. Estate of Winmill,
2018 WL 1410860, at *2 (Del. Ch. Mar. 21, 2018), as revised (Mar. 22, 2018), aff’d,
                                            46
                                          *****

         Having failed to carry his burden to demonstrate that the conflicted

Challenged Transactions were the product of a fair process that produced a fair price,

Dr. Goldberg has failed to prove that he fulfilled his duty of loyalty with respect to

the Challenged Transactions.        He has likewise failed to make a showing of

Macrophage’s unclean hands to justify denying Macrophage any relief.

Accordingly, judgment will be entered in favor of Macrophage on Count I of its

Complaint.

            Damages

         Delaware law does not demand certainty in awarding damages so long as the

plaintiff has proven the defendant committed a wrong and demonstrated that an

injury occurred. 163 With that said, “a plaintiff must demonstrate that the defendant

caused the injury and present a reasonable and factually supported basis for

determining damages.” 164

210 A.3d 705 (Del. 2019) (finding a breach of fiduciary duty notwithstanding the lack of
demonstrable damages).
163
      Medek v. Medek, 2009 WL 2005365, at *12 (Del. Ch. July 1, 2009).
164
   Id.; Frontier Oil v. Holly Corp., 2005 WL 1039027, at *39 (Del. Ch. Apr. 29, 2005)
(“A prevailing party must prove its damages by preponderance of the evidence; absolute
precision is not required but the proof may not be speculative either.”).

                                            47
         Macrophage recognizes that the Challenged Transactions have been reversed,

both by Navidea’s revocation of the Navidea Sub-License and by this Court’s

summary judgment ruling declaring the Challenged Transactions null and void.165

There is, therefore, no lasting harm sustained by Macrophage that can be remedied

by damages. The question is whether Macrophage has proven harm that has not

already been remedied by the Court’s declaration that the Challenged Transactions

are null and void.

         Macrophage identifies three categories of alleged damages it associates with

its breach of fiduciary duty claims: (1) the cost of litigation associated with

unwinding the Challenged Transactions and holding Dr. Goldberg accountable,

(2) reputational harm resulting from Dr. Goldberg’s actions and (3) Dr. Goldberg’s

use of Macrophage funds for his own personal benefit. 166 I address the alleged

reputational harm and misappropriation harm first, followed by the request for

attorneys’ fees.167

165
      JX 84; Summary Judgment Op. at 16–17.
166
      Pl.’s Opening Post-Trial Br. (“OB”) (D.I. 190) at 51–52.
167
   I address attorneys’ fees in a separate section because awarding such fees, even in the
fiduciary duty context, is subject to a separate standard.

                                              48
             a. Reputational Harm

         Macrophage argues it incurred substantial reputational harm as Dr. Goldberg

represented to industry participants and others that he alone controlled Macrophage,

and then disparaged key Macrophage employees when they contested

Dr. Goldberg’s claims. 168 By way of example, Macrophage points to an exchange

between Mr. Latkin and a member of the research team working with Macrophage

at the University of Connecticut in which Mr. Latkin advised the research team of

Dr. Goldberg’s termination only to learn that Dr. Goldberg had just informed that

same research team that he continued to speak for Macrophage and that others,

including Mr. Latkin, did not.169 Mr. Latkin testified about a similar exchange with

Nai Fang Wang, a researcher at New York Medical College, who was also told by

Dr. Goldberg that he was still CEO of Macrophage even after he had been

terminated.170

         While Mr. Latkin’s need to set the record straight with Macrophage partners

regarding Dr. Goldberg’s status with Macrophage was no doubt a source of

frustration, Macrophage presented no evidence that the confusion created by

Dr. Goldberg’s disinformation campaign caused tangible harm to the Company.

168
      OB at 51.
169
      Tr. 120:8–121:10 (Latkin), id. at 121:11–18 (Latkin); JX 86; JX 87.
170
      Tr. 122:21–123:15 (Latkin); JX 91.

                                              49
While Macrophage is correct that “damages resulting from a breach of fiduciary duty

are liberally calculated,” 171 the trial court cannot substitute its best guess at harm for

actual evidence of harm. 172 Because there is no proven harm, there is no basis to

award compensatory damages. 173

          b. Dr. Goldberg’s Use of Macrophage Funds for Personal Expenses

       Macrophage next asserts that Dr. Goldberg utilized funds loaned to

Macrophage from Navidea for his own benefit to pay: (1) Meitar to perform legal

services ostensibly for Macrophage that actually benefited Dr. Goldberg personally,

and (2) an outside consultant, Thelander, to develop a compensation package for

171
   In re S. Peru, 52 A.3d at 814; see also Thorpe by Castleman v. CERBCO, Inc., 676 A.2d
436, 444 (Del. 1996) (“[D]amages flowing from [a breach of fiduciary duties] are to be
liberally calculated.”).
172
    Bozievich v. Moreau, 2019 WL 4962694, at *2 (Del. Super. Ct. Oct. 8, 2019) (noting
that speculation or conjecture are not enough to support a damages award). Indeed, counsel
for Macrophage acknowledged at oral argument “that reputational harm outside of the legal
fees that needed to be brought is something that may be incapable of precise determination.
So, Macrophage would be requesting nominal damages in terms of compensating it for that
harm.” Oral Arg. Tr. at 19.
173
    Medek, 2009 WL 2005365, at *12 (requiring the demonstration of harm as a predicate
to awarding compensatory damages). In Southern Peru, a case on which Macrophage leans
with most of its weight, the court noted that even in cases where the court is attempting to
remedy a breach of fiduciary duty, the court must have a “basis for an estimate of
damages.” In re S. Peru, 52 A.3d at 814; see also Bomarko, Inc. v. Int’l Telecharge, Inc.,
794 A.2d 1161, 1184 (Del. Ch. 1999), aff’d, 766 A.2d 437 (Del. 2000) (“Responsible
estimates that lack mathematical certainty are permissible so long as the Court has a basis
to make a responsible estimate of damages.” (citation omitted)).

                                            50
Dr. Goldberg as CEO of Macrophage even though his compensation (or lack

thereof) had already been set.174

            Starting with the Meitar fees, Mr. Latkin testified that, upon review of certain

e-mail exchanges between Meitar and Dr. Goldberg, it appeared Meitar was

providing advice on issues outside the scope of Macrophage’s business. 175 For

example, it appears Meiter may have been giving Dr. Goldberg advice regarding the

Navidea shares Dr. Goldberg was to receive under the August Agreement.176 Even

assuming arguendo that the advice was personal to Dr. Goldberg, Macrophage’s

request for damages in the form of recoupment of fees fails because it has not

presented evidence to link those fees to any of its breach of fiduciary duty claims

relating to the Challenged Transactions.177 In other words, Macrophage presented

no evidence that Meitar charged Macrophage fees in connection with Dr. Goldberg’s

efforts at self-help related to the August Agreement.

174
      OB at 52.
175
      Tr. 137:5–22 (Latkin); JX 42; JX 45; JX 47.
176
      Id.
177
    Basho Techs. Holdco B, LLC v. Georgetown Basho Invs., LLC, 2018 WL 3326693,
at *24 (Del. Ch. July 6, 2018) (holding that plaintiff must make a “showing that a
sufficiently convincing causal linkage exists between the breach of duty and the remedy
sought that makes the remedy an apt means of addressing the breach”).

                                               51
         Macrophage’s attempt to recover the Meitar legal fees as damages fails for

another reason—it failed even to attempt to parse out Meitar’s invoices and quantify

how much of Meitar’s work related to Dr. Goldberg’s personal legal issues. While

“mathematical certainty is not required,” there must be a “basis for an estimate of

damages.”178 That basis is lacking in the evidence here.179

         Finally, the claim for damages related to Dr. Goldberg’s hiring of a

compensation consultant suffers from the same lack of evidence linking the claimed

damages to the claimed wrongdoing. Macrophage argues that, utilizing Macrophage

funds, Dr. Goldberg hired an outside consultant, Thelander, to work on a

compensation package for himself without consulting the Macrophage Board and

notwithstanding the fact that the August Agreement already set his compensation.180

Again, even assuming the evidence supported that claim, the evidence does not

support a link between those costs and the breaches of fiduciary duty related to the

178
      In re S. Peru, 52 A.3d at 814.
179
    Medek, 2009 WL 2005365, at *12. Macrophage asserts that as long as it proves the fact
of damages, it need not establish those damages with precise certainty. Siga Techs., Inc.
v. PharmAthene, Inc., 132 A.3d 1108, 1131 (Del. 2015) (“Where the injured party has
proven the fact of damages . . . the injured party need not establish the amount of damages
with precise certainty ‘where the wrong has been proven and injury established.’”). That
is true. But “precise certainty” is not what I was looking for in the evidence. Rather, I
searched for some basis in the evidence to reach a dollar amount that made sense. I came
up short.
180
      OB at 52; Tr. 133:22–134:2 (Latkin); id. at 138:1–19 (Latkin); JX 65.

                                              52
Challenged Transactions. In other words, a judgment requiring Dr. Goldberg to

reimburse the Company for this consultant fee would not “address[] the breach[es]”

Macrophage proved at trial. 181

            c. Nominal Damages

         In a fiduciary duty action, “plaintiffs need not plead (or prove at trial) that

they have been injured as an element of their claim.”182 In the absence of sufficient

proof of a specific injury, the court will issue a declaration that the defendant

breached his fiduciary duties and award nominal damages. 183                 Given that

Macrophage failed to prove a causal link between its claimed damages and the

proven breaches of fiduciary duty, the Court will issue the declaratory judgment

Macrophage has requested and award nominal damages in the amount of $1.00.

181
      Basho, 2018 WL 3326693, at *24.
182
      Orban v. Field, 1993 WL 547187, at *5 (Del. Ch. Dec. 30, 1993).
183
    Ravenswood, 2018 WL 1410860, at *2 (“Consequently, all that can be awarded is a
declaration that Defendants breached their fiduciary duties and an assessment of nominal
damages against each Defendant in the spirit of equity.”); Penn Mart Supermarkets, Inc. v.
New Castle Shopping LLC, 2005 WL 3502054, at *15 (Del. Ch. Dec. 15, 2005) (“Nominal
damages are not given as an equivalent for the wrong, but rather merely in recognition of
a[n] [] injury and by way of declaring the rights of the plaintiff. Nominal damages are
usually assessed in a trivial amount, selected simply for the purpose of declaring an
infraction of the Plaintiff’s rights and the commission of a wrong.”).

                                            53
            Attorneys’ Fees

         Macrophage seeks to recover its attorneys’ fees as an element of damages.

Delaware courts abide by the “American Rule” where “litigants are expected to bear

their own costs of litigation absent some special circumstances that warrant a shifting

of attorneys’ fees, which, in equity, may be awarded at the discretion of the court.”184

One such exception is the “bad faith” exception under which attorneys’ fees may be

“awarded against a defendant where the action giving rise to the suit involve[s] bad

faith, fraud, conduct that was totally unjustified, or the like and attorney’s fees are

considered an appropriate part of damages.”185             Contrary to Macrophage’s

suggestion, not every proven breach of the duty of loyalty will justify an award of

attorneys’ fees as damages.186 The breach must be “egregious” or the product of

“unusually deplorable behavior.”187

184
    Openwave Sys. Inc. v. Harbinger Cap. P’rs Master Fund I, Ltd., 924 A.2d 228, 246
(Del. Ch. 2007); see also Arbitrium (Cayman Islands) Handels AG v. Johnston, 705 A.2d
225, 231 (Del. Ch. 1997), aff’d, 720 A.2d 542 (Del. 1998) (“[U]nder the ‘American Rule’
courts do not award attorneys’ fees to a prevailing party absent some special
circumstance.”).
185
      Cantor Fitzgerald, L.P. v. Cantor, 2001 WL 536911, at *4 (Del. Ch. May 11, 2001).
186
    VGS, Inc. v. Castiel, 2001 WL 1154430, at *2 (Del. Ch. Sept. 25, 2001) (“[M]erely
being adjudicated a wrongdoer under our corporate law is not enough to justify fee
shifting.”); eBay Domestic Hldgs., Inc. v. Newmark, 16 A.3d 1, 46 (Del. Ch. 2010)
(requiring a showing of egregious conduct to justify an award of fees).
187
   Dweck v. Nasser, 959 A.2d 29, 46 (Del. Ch. 2008), vacated on other grounds, 966 A.2d
348 (Del. 2009) (noting that “an award of attorneys’ fees is ‘unusual relief’ reserved for
‘unusually deplorable behavior’ limited to exigent circumstances”); eBay, 16 A.3d at 47
(“Fees may also be shifted to a losing party whose pre-litigation conduct was undertaken
                                             54
         Macrophage argues that Dr. Goldberg’s decision to execute the Challenged

Transactions, in violation of his fiduciary duties, was an “egregious breach of [his]

duty of loyalty,” made in “bad faith,” such that the Court would be justified in

awarding Macrophage’s attorneys’ fees as damages. I disagree. Dr. Goldberg’s

attempt to remedy the wrong he perceived when Navidea failed to engage with him

to effectuate the August Agreement was misguided and ultimately unlawful.188

It stands as a prime example of why contractual self-help rarely can be effected

within the bounds of our law. If Macrophage had proven damages directly flowing

from this conduct, Dr. Goldberg would be obliged to pay them. It did not. As noted,

to take the leap from a proven breach of fiduciary duty to the recovery of attorneys’

fees as damages, Macrophage was required to prove “glaring[ly] egregious[]”

misconduct.189 Instead, the evidence reveals Dr. Goldberg lost his patience with

Navidea and then acted in frustration by causing Macrophage to deliver what he

believed Navidea had promised him.            He did not engage in the Challenged

Transactions in a vacuum. He was wrong to take matters into his own hands and

in bad faith and was so egregious as to justify an award of attorneys’ fees as an element of
damages.” (internal quotations omitted)).
188
      Tr. 413:15–20 (Goldberg).
189
   Kaung v. Cole Nat’l Corp., 2004 WL 1921249, at *6 (Del. Ch. Aug. 27, 2004), aff’d in
part, rev’d in part sub nom., 884 A.2d 500 (Del. 2005) (shifting fees where plaintiff’s
conduct rose to the level of “glaring egregiousness”).

                                            55
Macrophage has prevailed upon the Court to unwind the Challenged Transactions

and declare that they were the product of breaches of fiduciary duty. These remedies

are proportionate to the wrongful conduct that has been proven. 190

          eBay Domestic Holdings, Inc. v. Newmark is instructive. 191 There, the court

determined that two directors and controllers “breached their fiduciary duty of

loyalty by using their power as directors and controlling stockholders to implement

an interested transaction that was not entirely fair to eBay, the minority

stockholder.” 192 Yet, the court rejected the request to award attorneys’ fees because

the two controllers “subjectively believed the [disputed board actions], despite their

uniqueness, were legally permissible under Delaware law.” 193               Dr. Goldberg

subjectively believed that he was effectuating a transaction that the parties had

agreed to, and it appears Navidea’s lawyer, Mr. Mower, at one time suggested a

structure similar to the one Dr. Goldberg ultimately attempted to execute.194 While

190
      VGS, 2001 WL 1154430, at *2.
191
      16 A.3d 1.
192
      eBay, 16 A.3d at 46.
193
      Id. at 47.
194
   Tr. 413:15–20 (Goldberg) (“My intent was to replicate as closely as possible the August
agreement with the exact same license as founded Macrophage, and it was to enable us to
achieve, at least externally, the perception that there is a separation between therapeutics
and Navidea.”); id. at 623:21–624:12 (Goldberg) (noting that the idea for creating a
subsidiary and sub-licensing out Macrophage’s technology to that subsidiary was
“suggested by Bill Mower post-August 14”).

                                            56
the conduct violated Delaware law, again, it was not so “egregious” or “deplorable”

as to justify the extraordinary remedy of fee-shifting. 195

         C. Conversion

         Conversion is the “act of dominion wrongfully exerted over the property of

another, in denial of his right, or inconsistent with it.” 196 “Generally, the necessary

elements for a conversion under Delaware law are that a plaintiff had a property

interest in the converted goods; that the plaintiff had a right to possession of the

goods; and that the plaintiff sustained damages.” 197 “For a plaintiff to recover under

a theory of conversion, he must prove, inter alia, precisely what property the

195
    I recognize, as Macrophage points out, that there are instances in which, rather than
engaging in a traditional fee-shifting analysis, the court has awarded attorneys’ fees, using
its “broad discretion to tailor remedies,” when damages are otherwise difficult to ascertain.
See Cantor Fitzgerald, 2001 WL 536911, at *3. With that said, the court determined in
Cantor that an award of attorneys’ fees was appropriate because of the “egregious breach
of [the] duty of loyalty” in that case. Id. There, the defendants knew they were breaching
a partnership agreement and did so with the express purpose of challenging plaintiff’s “core
business.” Id. In contrast, for the reasons already explained, I am satisfied Dr. Goldberg’s
conduct, while disloyal, did not constitute an “egregious breach of [his] duty of loyalty.”
196
      Arnold v. Soc’y for Sav. Bancorp, Inc., 678 A.2d 533, 536 (Del. 1996).
197
   Goodrich v. E.F. Hutton Gp., Inc., 542 A.2d 1200, 1203 (Del. Ch. 1988); Stone & Paper
Invs., LLC v. Blanch, 2020 WL 3496694, at *10 (Del. Ch. June 29, 2020) (same); see also
Rockwell, 2004 WL 2965427, *4 (“The necessary elements of conversion are that
Rockwell had a property interest in the confidential document; that Rockwell had a right
to possession of the documents; and that Rockwell sustained damages.”).

                                              57
defendant converted and that his interest in the property was viable at the time of the

conversion.”198

      Light on specifics, Macrophage’s conversion claim rests on the contention

that Dr. Goldberg converted Macrophage’s “intellectual property.” 199 Macrophage

has elected to stop short of identifying the intellectual property and apparently would

have the Court sift through the trial record to find it on its own. In this regard,

198
   CIT Commc’ns Fin. Corp. v. Level 3 Commc’ns, LLC, 2008 WL 2586694, at *2
(Del. Super. Ct. June 6, 2008); see also Touch of Italy Salumeria & Pasticceria, LLC v.
Bascio, 2014 WL 108895, at *7 (Del. Ch. Jan. 13, 2014) (dismissing a conversion claim
where the complaint only pled “broad categories of property” but did “not allege[] any
specific property the Defendants [] converted”).
199
    OB at 42 (“[S]ince at least November 2018, Dr. Goldberg repeatedly worked to convert
Macrophage’s intellectual property to himself.”). Macrophage also argues, albeit in
passing, that the Navidea Sub-License was converted in the Challenged Transactions and
that certain documents and electronic devices were stolen upon Dr. Goldberg’s termination.
OB at 42. Macrophage concedes, however, that this Court’s summary judgment ruling
unwound the Challenged Transactions and directed the return of the Navidea Sub-License
to Macrophage, and that the Court’s contempt ruling directed the return of Macrophage’s
electronic devices. MTD and Contempt Op. at 80 (“The order requires that these devices
be returned, that order has not been modified, and Dr. Goldberg doesn’t get to decide for
himself whether or not he will comply with that order.”). Macrophage does not contend
that the Navidea Sub-License was not returned in full form, but rather asserts that certain
damages flowed from Dr. Goldberg’s temporary possession or use of the sublicense. For
reasons explained above, that claim has failed. As for the electronic devices, Macrophage
has not asserted that Dr. Goldberg did not return those devices when the Court ordered him
to do so and has likewise not claimed or proven any other damages resulting from
Dr. Goldberg’s alleged theft. Because no harm resulted from either the Challenged
Transactions or Dr. Goldberg’s possession of the devices, no conversion (in those respects)
occurred. Rockwell, 2004 WL 2965427, *4 (holding that the element of damages is an
essential component of a conversion claim). As for the allegedly converted documents, the
trial record contains no reference to those documents so I have deemed that claim
(Count VI) abandoned.

                                            58
Macrophage has left some breadcrumbs. It first points to the minutes of the

November 28, 2018 Macrophage Board meeting, which note that Dr. Goldberg

“ha[d] sold his relevant IP to a partnership of his 4 children who have each

individually assigned certain IP rights to the partnership as well.” 200 Of course, the

evidence is clear that the transactions discussed in those minutes never occurred.201

The trail then runs cold.

         Next, Macrophage points to a letter sent by Dr. Goldberg’s personal counsel

to Navidea on December 18, 2018, where counsel states that Dr. Goldberg is “the

owner of certain intellectual property necessary for Macrophage to succeed.”202

Again, the trail runs cold as there is no evidence in the record that reveals what

“intellectual property” counsel was referring to.

         And finally, Macrophage points to another letter from Dr. Goldberg’s counsel

to Navidea, this time on January 18, 2019, where counsel states that if

Dr. Goldberg’s super voting stock was issued by Macrophage, Dr. Goldberg would

then “deliver to Navidea and to Macrophage a document confirming that he asserts

no ownership rights to any intellectual property directly [related to] . . . Navidea or

200
      JX 53.
201
      Tr. 441:15–23 (Goldberg); id. at 443:4–20 (Goldberg); id. at 501:7–14 (Goldberg).
202
      JX 62.

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Macrophage products or processes.”203 Again, there is no evidence that would lead

the Court to an understanding of what intellectual property Dr. Goldberg owned or

controlled related to “Navidea or Macrophage products or processes.”204

         I note that Dr. Goldberg confirmed that he currently does not own or possess

any intellectual property related to either Navidea or Macrophage.205 For his part,

Mr. Latkin testified that he had no idea whether Dr. Goldberg possessed any IP

belonging to Macrophage or Navidea.206 And, Macrophage readily recognizes that

Dr. Goldberg’s “Proprietary Information Agreement” with Navidea meant any IP

Dr. Goldberg created while at Navidea or any of its subsidiaries was and remains the

property of Navidea and its subsidiaries. 207

         Based on the evidence presented, it appears that Macrophage would have the

Court enter a judgment awarding damages based on a finding that Dr. Goldberg has

203
      JX 129.
204
   Id.; see CIT Commc’ns, 2008 WL 2586694, at *2 (holding that conversion claim failed
for lack of evidence of “what property the defendant converted”); Touch of Italy, 2014
WL 108895, at *7 (holding that identifying “broad categories of property” allegedly
converted is inadequate to sustain the prima facie burden to prove conversion).
205
      Tr. 583:7–12 (Goldberg).
206
      Tr. 268:5–20 (Latkin).
207
      JX 7.

                                          60
converted unidentified property that he does not now, and may never have possessed.

That is not a sustainable conversion claim under our law.208

                                 III.   CONCLUSION

         Macrophage has proven by a preponderance of the evidence that Dr. Goldberg

breached his fiduciary duty of loyalty by entering into the Challenged Transactions

(Count I). 209 With that said, Macrophage has failed to prove that any damages

resulted from Dr. Goldberg’s breach. Dr. Goldberg did not engage in egregious and

bad faith conduct to justify awarding Macrophage’s attorneys’ fees. Thus, the Court

will enter a judgment issuing Macrophage the declaratory judgments it seeks and

awarding it nominal damages of $1.00. Macrophage has failed to prove its claims

for conversion (Counts III and VI) and judgment will be entered in favor of

Defendants on those claims.

         Macrophage shall submit a form of final judgment implementing the Court’s

post-trial verdicts, on notice to Defendants, within ten (10) days.

208
      Touch of Italy, 2014 WL 108895, at *7.
209
   As noted above, the Court has elected not to adjudicate Macrophage’s breach of the
duty of care claim (Count II) given Macrophage’s Section 102(b)(7) charter provision and
the Court’s verdict on the breach of the duty of loyalty claim. The claim of breach of
fiduciary duty for Dr. Goldberg’s failure to produce records relating to the Challenged
Transactions (Count V) is rejected as moot since Macrophage has now received those
documents in connection with this litigation. Finally, I note that the Court already has
entered judgment in favor of Macrophage on its Section 271 claim (Count IV). See D.I. 86.

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