Delaware Chancery Court Dismisses Derivative Claims Against PSD’s ETF Fund Client

In an Order implementing rulings from the bench on April 6, 2022, the Delaware Chancery Court issued an Order dismissing derivative claims brought by a member of PSD’s client Teucrium Trading, LLC. The plaintiff brought claims alleging breaches of fiduciary duty and terms of an operating agreement. These claims included allegations that officers purportedly caused materially misleading and incomplete information to be disseminated to members and stockholders of funds. The Court found the allegations “purely conclusory.” The ruling explained that the claimants couched their allegations with qualifiers like “essentially” and compared projections given at the start of the month to figures known at the end of the month, which the Court found obviously not relevant. The Court also dismissed an effort at fraud claims by one of the co-claimants that had been based on a theory that she resigned form the cmopany and entered into a separation agreement in reliance on a representation that she would be kept employed. As the Court concluded: “It makes no logical sense.” The Court dismissed 10 of 12 claims, including all derivative claims. The rulings upheld, on the pleadings, only one part of an individual claim concerning the termination of a claimant as an officer and a claim that an agreement had been reached to buy out a claimant. The implementing Order thereby narrowed the case substantially, with the limited remaining claims subject to potential summary judgment motions.

Barry Pollack argued the motion, and Josh Solomon participated on the team.