If You Climb Into Bed With Your Business Partner, the Court Might Climb in, Too: The Delaware Supreme Court's Cautionary Tale of Acrimonious Engagement and Corporate Deadlock in Shawe v. Elting

This Casebrief examines the Delaware Supreme Court’s decision in Shawe v. Elting and argues that the court properly upheld the sale of a profitable corporation under Section 226 of the Delaware General Corporation Law. The court concluded that severe stockholder and director deadlock justified the appointment of a custodian and the sale of the company. The Casebrief contends that the decision reaffirms the broad equitable powers of the Delaware Court of Chancery and serves as a warning that prolonged deadlock in closely held corporations may result in judicially ordered dissolution or sale.[This abstract was written by Microsoft Copilot, a generative artificial intelligence.]