Legal & Litigation Risk · SECTION 2

Section 2 of 12

The reincorporation-litigation playbook

Long-form source as of 2026-08-10

Three lanes by accrual timing — pre-vote, transition window, post-effective. Each node below names a plaintiff lever, the defense response, and the operative statute or case. The lanes are not silos: a single claim may shift between them as conversion mechanics unfold.

Figure 2

Reincorporation-litigation playbook — plaintiff levers and defense responses across the three lanes.

Three lanes by accrual timing. Each node names the plaintiff lever, the defense response, and the operative statute or case.

Pre-vote T-90 to T-0 Transition window T-0 to T+30 Post-effective T+30 onward § 220 demand P: develop pleading record D: enumerated-category response Law: DGCL § 220 (post-SB 21) Disclosure-adequacy MTD P: Sched. 14A item 14 / 19 gaps D: itemized risk-factor recital Law: Section 14(a); Rule 14a-9 Pre-vote injunction motion P: irreparable harm to franchise D: shareholder choice; clear-day Law: Maffei v. Palkon (2025) MFW cleansing if controller P: committee-process attack D: ab initio protocol record Law: MFW; Flood v. Synutra; DGCL § 144 (post-SB 21) Appraisal noticing P: § 262 demand timing D: market-out invocation Law: DGCL §§ 251, 253, 262, 266 Vote certification + 8-K P: vote-count challenges D: tabulator + inspector reports Law: DGCL § 228; Rule 14a-4 Form-conversion appraisal P: structure-specific appraisal D: § 266 conversion mechanics Law: DGCL §§ 251 vs. 253 vs. 266 Forum-bylaw enforcement P: federal-claims escape D: Boilermakers / Salzberg Law: TBOC § 2.115; Salzberg Derivative-standing test P: § 21.552 constitutional attack D: enforce bylaw threshold ≤ 3% Law: § 21.552(a)(3); Gusinsky Codified BJR MTD posture P: rebut presumption + plead intentional misconduct (NV) D: § 21.419 / § 78.138(7) Law: TBOC § 21.419; Guzman Officer-Caremark under BJR P: McDonald’s officer-oversight D: codified BJR officer coverage Law: TBOC § 21.419; McDonald’s IA doctrine + dormant CC P: extraterritorial-reach attack D: CTS Corp. internal-affairs Law: Edgar v. MITE; CTS Corp. P = Plaintiff lever · D = Defense response · Law = operative statute or case. Lanes are ordered by claim-accrual timing relative to the effective date (T). Sources: TBOC §§ 2.115, 21.418, 21.4161, 21.419, 21.552(a)(3), 21.553; NRS § 78.138(7); DGCL §§ 144, 220, 228, 251, 253, 262, 266 (post-SB 21); Maffei v. Palkon, 2025 WL 384054 (Del. 2025); Gusinsky v. Reynolds (N.D. Tex. Mar. 17, 2026); In re McDonald’s, 2023 WL 387292 (Del. Ch. 2023).

Sources: TBOC § 2.115; TBOC §§ 21.418, 21.4161, 21.419, 21.552(a)(3), 21.553; NRS § 78.138(7); DGCL §§ 144, 220, 228, 251, 253, 262, 266 (post-SB 21); Maffei v. Palkon, 339 A.3d 705 (Del. 2025); Gusinsky v. Reynolds, No. 3:25-cv-01816-K (N.D. Tex. Mar. 17, 2026); In re McDonald’s Corp. S’holder Deriv. Litig., 2023 WL 387292 (Del. Ch. Jan. 26, 2023).

How the lanes operate in a live matter

Pre-vote. The window between board authorization and the stockholder vote (or written-consent record date) is when discovery records get built, the most consequential disclosure-adequacy challenges land, and the doctrinal injunction theory either survives or does not; the operative deadlines are set by the transaction's own event gates — authorization, disclosure, approval, effectiveness — not by any fixed number of days. A pre-vote DGCL § 220 demand is now narrower than it was pre-SB 21 — the requesting stockholder must work within the enumerated categories and meet the “compelling need” standard for anything beyond — but books-and-records remains the single best mechanism for developing a pleading record before merits litigation. Disclosure-adequacy MTDs target Schedule 14A item 14 (mergers and acquisitions) and item 19 (amendment of charter or bylaws); under Section 14(a) of the Exchange Act and Rule 14a-9, materially misleading or omissive descriptions of derivative-suit access, books-and-records changes, exculpation expansion, or controller economics are independently actionable. The pre-vote injunction motion is where Maffei v. Palkon now bites: the Delaware Supreme Court's en banc reversal in February 2025 substantially narrowed the controller-benefit theory for clear-day reincorporations. Maffei did not decide federal disclosure claims; any Section 14(a)/Rule 14a-9 theory remains subject to its own independent statutory and procedural elements. Where a controller is present, MFW-style conditioning — special-committee and minority-approval structure adopted ab initio — is one recognized cleansing route in Delaware; its effect is transaction-specific, not automatic.

Transition. The period immediately after the effective time is procedurally distinctive, with deadlines set by statute and transaction form rather than a fixed calendar window. Appraisal noticing under DGCL § 262 — or whatever the destination state’s analog turns out to be — is form-dependent: a § 266 conversion, a § 251 merger, and a § 253 short-form merger all imply different appraisal architectures and demand timelines. The SEC filing record also depends on the approval method: a meeting-vote deal generates a Form 8-K Item 5.07 vote-results filing, while a written-consent conversion under DGCL § 228 proceeds on Schedule 14C information-statement and consent/record-date mechanics with a completion 8-K — Dropbox’s March 2025 conversion is the concrete example of the consent route producing no Item 5.07 vote report.

Post-effective. The post-effective lane is where the doctrinal questions are least settled and new plaintiff theories are most often tested. Forum-bylaw enforcement and the federal-claims escape valve are litigated under Salzberg v. Sciabacucchi15 (Securities Act federal-forum provisions valid as a matter of Delaware corporate law) and Lee v. Fisher16 (Ninth Circuit treatment of derivative-suit forum clauses under the Exchange Act); the analysis is claim-specific. The derivative-standing test is the live battleground for TBOC § 21.552(a)(3): Gusinsky v. Reynolds17 — the first identified federal-court application — dismissed a 100-share plaintiff under Southwest Airlines’s bylaw-adopted 3% threshold, rejecting the Texas retroactivity and contract theories on the merits while treating the open-courts and unspecified federal theories as abandoned; dormant Commerce Clause and internal-affairs challenges were not presented and remain unadjudicated. The codified BJR MTD posture differs across the two destination states: Texas’s § 21.419(c) creates a presumption rebuttable by particularized pleading; Nevada’s § 78.138(7) imposes the higher two-prong damages-liability standard (fiduciary breach plus intentional misconduct, fraud, or knowing violation of law) confirmed in Guzman v. Johnson; no Nevada MFW analogue has been identified, and the effect of an MFW-like process under Nevada law is unsettled — Guzman addresses the statutory route to individual damages liability, not the availability of process-based cleansing. The officer-Caremark question under codified BJR remains open in both states. Finally, internal-affairs doctrine and dormant Commerce Clause challenges sit at the constitutional ceiling — Edgar v. MITE Corp.18 and CTS Corp. v. Dynamics Corp. of America19 — and remain unadjudicated against SB 29.

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