COURT OF CHANCERY
OF THE
STATE OF DELAWARE
BONNIE W. DAVID COURT OF CHANCERY COURTHOUSE VICE CHANCELLOR 34 THE CIRCLE
GEORGETOWN, DE 19947
Date Submitted: July 22, 2026
Date Decided: August 10, 2026
Andrew S. Dupre, Esq. Ryan D. Stottmann, Esq.
Tammy L. Mercer, Esq. Alex MacLennan, Esq.
Samuel E. Bashman, Esq. Morris, Nichols, Arsht & Tunnell LLP Akerman LLP 1201 North Market Street
222 Delaware Avenue, Suite 1710 P.O. Box 1347
Wilmington, DE 19807 Wilmington, DE 19899-1347
RE: H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
Dear Counsel:
This letter opinion resolves plaintiffs H.I.G. Capital, LLC (“H.I.G”), H.I.G.
GP II, Inc. (“H.I.G. GP”), and H.I.G. CCS-CMGC, L.P.’s (“H.I.G. LP,” and
collectively, “Plaintiffs”) Motion for a Preliminary Anti-Suit Injunction (the
“Motion”). Through the Motion, Plaintiffs seek to preliminarily enjoin defendants
Kristin Allred and Victoria Klein (“Defendants”) from taking actions in furtherance
of a lawsuit pending in California state court, purportedly filed in contravention of
Delaware forum selection provisions in three separate agreements. For the reasons
explained below, the Motion is denied.
H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 2 of 19
I. BACKGROUND1
A. Defendants Sell Behavioral Health Facilities To Plaintiffs’
Affiliates.
Plaintiff H.I.G. is a Delaware limited liability company and private equity
sponsor that provides investment management, advisory, and related services to
investment funds. Verified Compl. for Breach of Contract [hereinafter Compl.]
¶ 15, Dkt. 1. Plaintiff H.I.G. LP is a Delaware limited partnership and the managing
member of nonparty CCS-CMGC Parent GP, LLC (“Wellpath Parent GP”), a
Delaware limited liability company and the general partner of nonparty CCS-CMGC
Parent Holdings, LP (“Wellpath Parent”). Id. ¶¶ 17–19. Wellpath Parent is a
Delaware limited partnership and the ultimate parent of Wellpath Holdings, Inc.
(“Wellpath Holdco”), a Delaware corporation. Id. ¶¶ 19–20. Plaintiff H.I.G. GP is
a Delaware corporation and the general partner of H.I.G. LP. Id. ¶ 16.
Defendants Kristin Allred and Victoria Klein and nonparty Michael Doyle
owned and operated Alpine Special Treatment Center and Harborview Center
Behavioral Health, behavioral healthcare facilities in California. Id. ¶ 28. On April
1
The following facts are as the Court finds them based on the record presented in connection with the Motion. The transcript of the July 22, 2026, hearing on the Motion has not been finalized. Citations to “Draft Tr. __” refer to a draft transcript of the July 22 hearing.
H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 3 of 19
21, 2022, Defendants sold their equity interests in the facilities to Alpine CA
Behavioral Health HoldCo, LLC, the “Buyer,” with Wellpath Holdco as the
“Guarantor” (the “Sale”). Id. ¶¶ 28–29; id., Ex. A-1 [hereinafter EPA] at 1. The
Sale closed in August 2022. Compl. ¶ 28.
The Sale was effectuated through three agreements: an Equity Purchase
Agreement (the “EPA”), a Rollover and Contribution Agreement (the “Rollover
Agreement”), and CCS-CMGC Parent Holdings, L.P.’s Second Amended and
Restated Agreement of Limited Partnership (the “Partnership Agreement”). See
EPA; Compl., Ex. B [hereinafter Rollover Agt.]; Transmittal Aff. of Alex
MacLennan in Supp. of Defs.’ Answering Br. in Opp’n to the Pls.’ Mot. for a Prelim.
Anti-Suit Inj. [hereinafter MacLennan Aff.], Ex. 4 [hereinafter Partnership Agt.],
Dkt. 19. The EPA, the Rollover Agreement, and the Partnership Agreement are
governed by Delaware law. EPA § 10.3; Rollover Agt. § 5(h); Partnership Agt.
§ 14.7.
Under the EPA, the Buyer agreed to pay Defendants an “Estimated Cash
Purchase Price” at closing, plus a deferred cash payment of $17.5 million one year
later, subject to certain conditions (the “Deferred Payment”). EPA §§ 2.1(a),
2.2(b)(i), 2.3(a); see id. Art. 9. The EPA includes a forum selection provision that
requires disputes “arising out of or relating to” the EPA to be brought exclusively in H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 4 of 19
the U.S. District Court for the District of Delaware or the Delaware Court of
Chancery:
THE PARTIES HERETO AGREE THAT ALL DISPUTES, LEGAL
ACTIONS, SUITS AND PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT MUST BE BROUGHT
EXCLUSIVELY IN A FEDERAL DISTRICT COURT LOCATED IN
THE DISTRICT OF DELAWARE OR THE DELAWARE
CHANCERY COURT IN NEW CASTLE COUNTY, DELAWARE
(COLLECTIVELY THE “DESIGNATED COURTS”). EACH
PARTY HERETO HEREBY CONSENTS AND SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE DESIGNATED COURTS.
NO LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT MAY BE BROUGHT IN ANY OTHER
FORUM.
Id. § 10.21.
Under the Rollover Agreement, Defendants received equity interests in
Wellpath Parent. The Rollover Agreement also includes a forum selection provision
that requires disputes “arising out of or relating to” the Rollover Agreement to be
brought exclusively in the U.S. District Court for the District of Delaware or the
Delaware Court of Chancery:
THE PARTIES HERETO AGREE THAT ALL DISPUTES, LEGAL
ACTIONS, SUITS AND PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT MUST BE BROUGHT
EXCLUSIVELY IN A FEDERAL DISTRICT COURT LOCATED IN
THE DISTRICT OF DELAWARE OR THE DELAWARE
CHANCERY COURT IN NEW CASTLE COUNTY, DELAWARE
(COLLECTIVELY THE “DESIGNATED COURTS”). EACH
PARTY HERETO HEREBY CONSENTS AND SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE DESIGNATED COURTS.
H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 5 of 19
Rollover Agt. § 5(i).
B. The Buyer, Wellpath Holdco, And Defendants Settle A Payment
Dispute.
One year after closing, in August 2023, the Buyer informed Defendants that
it would not be paying the Deferred Payment because doing so would result in
default. Compl. ¶ 36. Defendants disagreed that the EPA permitted further deferral
of the Deferred Payment. Id. ¶ 37. To resolve that dispute, on July 1, 2024, the
Buyer, Wellpath Holdco, and Defendants entered into a settlement agreement (the
“Settlement Agreement”). Compl. ¶ 38; id., Ex. C [hereinafter Settlement Agt.].
The Settlement Agreement governs the “Dispute,” defined to mean “a dispute” over
“whether the [Deferred] Payment was due as of August 18, 2023, or at times
thereafter”:
WHEREAS, the EPA included a provision in section 2.2(b)(i)
concerning payment of a portion of the purchase price defined as the
“Deferred One Year Cash Payment” in the amount of $17,500,000
(“Payment”).
WHEREAS, the EPA also included a provision in section 2.2(d)
concerning the possible deferral of the Payment.
WHEREAS, a dispute has arisen whether the Payment was due as of
August 18, 2023, or at times thereafter, or has been deferred under
section 2.2(d) of the EPA (the “Dispute”).
Id. at 1 (emphasis added). The Settlement Agreement “release[d] and forever
discharge[d]” claims “concerning the Dispute.” Id. ¶ 7. In exchange, the Buyer and H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
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Wellpath Holdco agreed to pay Defendants $250,000 per month until the Deferred
Payment, with interest, was satisfied. Id. ¶ 5.
The Settlement Agreement, like the EPA and the Rollover Agreement, is
governed by Delaware law and contains a forum selection provision. The forum
selection provision in the Settlement Agreement requires that a “federal or state court
of competent jurisdiction situated in the State of Delaware” “shall be the sole and
exclusive forum for the adjudication of” a dispute “arising out of, in connection with,
or in any way related to” the Settlement Agreement:
The Parties agree to venue and jurisdiction in the courts of Delaware
for any proceedings, suits or actions arising in whole or in part from
this Settlement Agreement. Any dispute of whatever kind or nature
whatsoever (whether based in contract, tort, statute, or otherwise)
arising out of, in connection with, or in any way related to this
Agreement shall be fully and finally adjudicated in a federal or state
court of competent jurisdiction situated in the State of Delaware, which
court shall be the sole and exclusive forum for the adjudication of such
dispute.
Id. ¶ 8.
C. Wellpath Files For Bankruptcy.
Four months after the Settlement Agreement was signed, in November 2024,
Wellpath entities, including the Buyer and Wellpath Holdco, filed for bankruptcy in
the U.S. Bankruptcy Court for the Southern District of Texas. Compl. ¶ 46. H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 7 of 19
Defendants filed proofs of claim against the Buyer and Wellpath Holdco related to
the Settlement Agreement. Id., Ex. D.
D. Defendants Sue Plaintiffs In California State Court.
On July 31, 2025, Defendants filed a lawsuit against Plaintiffs, Wellpath
Parent, and Wellpath Parent GP in California state court (the “California Action”).
Compl., Ex. E [hereinafter Cal. Compl.]. The complaint in the California Action
initially alleged two causes of action: a claim for breach of fiduciary duty and a claim
for securities fraud under Sections 25401 and 25504 of the California Corporations
Code (the “California Blue Sky Claim”). Id. ¶¶ 1–20. In support of the California
Blue Sky Claim, the California complaint alleged that on August 19, 2022, and
September 1, 2023, Plaintiffs here (defendants in the California Action) “issued
securities . . . in the form of limited partnership interests in” Wellpath Parent and, in
both instances, concealed that they “did not intend to pay for the business being
purchased” and “intended to fabricate false statements regarding the inability to
make payments because of loan covenants.” Id. ¶¶ 10–11.
Plaintiffs removed the California Action to the U.S. District Court for the
Southern District of California, arguing that Wellpath Parent and Wellpath Parent
GP remained parties to the Texas bankruptcy action. Compl., Ex. F. Plaintiffs then
filed a motion to transfer the action to the U.S. District Court for the Southern H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 8 of 19
District of Texas so that the Bankruptcy Court could decide the “unique[] bankruptcy
considerations” relevant to the claims. Compl., Ex. G. Defendants voluntarily
dismissed Wellpath Parent and Wellpath Parent GP as defendants in the California
Action and moved to remand to California state court. Compl., Ex. H.
On February 2, 2026, the U.S. District Court for the Southern District of
California remanded the action to California state court. Compl., Ex. J. Defendants
dismissed their breach of fiduciary duty claim without prejudice on April 8.
MacLennan Aff., Ex. 29.
E. Procedural History
On March 12, 2026, Plaintiffs initiated this action through the filing of a
Verified Complaint (the “Complaint”). Count I of the Complaint alleges that
Defendants breached the forum selection provision in the Settlement Agreement by
filing the California Action. Compl. ¶¶ 74–86. Count II alleges that Defendants
breached the forum selection provisions in the EPA and the Rollover Agreement by
filing the California Action. Id. ¶¶ 87–98. Count III seeks an order of specific
performance directing Defendants to comply with the forum selection provisions in
the Settlement Agreement, EPA, and Rollover Agreement. Id. ¶¶ 99–106. Count
IV seeks a declaratory judgment that Defendants must litigate their claims in
Delaware. Id. ¶¶ 107–12.
H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 9 of 19
Concurrently with their Complaint, Plaintiffs sought expedition and filed the
Motion. The Court heard oral argument on July 22.
II. ANALYSIS
Plaintiffs seek a preliminary anti-suit injunction prohibiting Defendants from
taking actions in furtherance of the California Action or from pursuing the claim
therein in a non-Delaware forum. “Anti-suit injunctions are ‘not granted lightly’ in
this [C]ourt.” SPay, Inc. v. Stack Media Inc., 2021 WL 1109181, at *2 (Del. Ch.
Mar. 23, 2021); see also Pentwater Cap. Mgmt. LP v. Kaz, 2022 WL 1052347, at *4
(Del. Ch. Apr. 8, 2022) (“[A]nti-suit injunctions ‘should be entered sparingly,’ and
‘only where there is clear evidence of threatened irreparable harm, equity supports
the injunction, the relief will be effective, and comity has been fully exercised.’”).
“A party seeking a preliminary injunction in this court must demonstrate: (1) a
reasonable likelihood of success on the merits of its claim; (2) it would be irreparably
harmed if the court were to deny relief; and (3) the balance of hardships tips in its
favor.” SPay, 2021 WL 1109181, at *2.
Plaintiffs argue that they are likely to succeed on the merits of their breach of
contract and declaratory judgment claims because forum selection provisions in the
Settlement Agreement, the EPA, and the Rollover Agreement require Defendants to
litigate the California Blue Sky Claim in a Delaware forum. Defendants raise four H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 10 of 19
primary arguments in response. First, they argue that the California Blue Sky Claim
does not fall within the scope of the three forum selection provisions. Second, they
argue that the forum selection provisions in the EPA and Rollover Agreement are
unenforceable. Third, they argue that Plaintiffs, as nonparties to the relevant
agreements, lack standing to enforce the forum selection provisions. And fourth,
they argue that the Motion should be denied on laches grounds.
As set forth below, Plaintiffs have not established that they are likely to
succeed on the merits of their claims.
A. The California Blue Sky Claim Does Not Fall Within The Scope Of
The Settlement Agreement’s Forum Selection Provision.
Plaintiffs’ primary argument is that the forum selection provision in the
Settlement Agreement requires Defendants to litigate the California Blue Sky Claim
in a Delaware forum. This argument fails because the California Blue Sky Claim
does not fall within the scope of the Settlement Agreement’s forum selection
provision.
“The courts of Delaware defer to forum selection clauses and routinely ‘give
effect to the terms of private agreements to resolve disputes in a designated judicial
forum out of respect for the parties’ contractual designation.’” Ashall Homes Ltd. v.
ROK Ent. Gp. Inc., 992 A.2d 1239, 1245 (Del. Ch. 2010) (quoting Troy Corp. v.
Schoon, 2007 WL 949441, at *2 (Del. Ch. Mar. 26, 2007)). But a forum selection H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 11 of 19
provision will not govern unless the claim in question falls within its scope. Forum
selection clauses, like other contractual provisions, “are interpreted consistent with
the principle that ‘[w]here the [contractual language] is clear and unambiguous,
courts [should] interpret the contract in accordance with the ordinary and usual
meaning of the language.’” In re Bay Hills Emerging P’rs I, L.P., 2018 WL
3217650, at *5 (Del. Ch. July 2, 2018) (alteration in original) (quoting Grosvenor
Orlando Assocs. v. HCP Grosvenor Orlando LLC, 2013 WL 3215704, at *2 (Del.
Ch. June 26, 2013)). “[T]he court will enjoin a party from prosecuting an action
elsewhere based on a forum selection clause only where ‘the language selected
makes it absolutely clear the parties believed that [this] court should forever be the
only forum for resolving a dispute.’” SPay, 2021 WL 1109181, at *2 (quoting
Eisenbud v. Omnitech Corp. Sols., Inc., 1996 WL 162245, at *2 (Del. Ch. Mar. 21,
1996)).
Paragraph 8 of the Settlement Agreement mandates that a “federal or state
court of competent jurisdiction situated in the State of Delaware” “shall be the sole
and exclusive forum for the adjudication of” a dispute “arising out of, in connection
with, or in any way related to th[e] [Settlement] Agreement.” Settlement Agt. ¶ 8.
The Settlement Agreement itself is limited to resolving the “Dispute,” defined to
mean the sole issue of “whether the [Deferred Payment under the EPA] was due as H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 12 of 19
of August 18, 2023, or at times thereafter, or has been deferred under section 2.2(d)
of the EPA[.]” Id. at 1. The only claims released under the Settlement Agreement
are those “concerning the Dispute.” Id. ¶ 7.
The California Blue Sky Claim does not arise out of, nor is it in connection
with or in any way related to, the narrow payment dispute resolved through the
Settlement Agreement. The California Blue Sky Claim concerns the issuance of
securities in August 2022 and September 2023 “by means of . . . an untrue statement
of material fact.” Cal. Compl. ¶¶ 10–11; Cal. Corp. Code § 25401. Whether
Plaintiffs made false statements in connection with security issuances in 2022 and
2023 is not “in any way related to” a Settlement Agreement in 2024 that resolved
only whether the Deferred Payment under the EPA was due on August 18, 2023, or
if further deferral was permitted under Section 2.2(d) of the EPA. Settlement Agt.
at 1.
As this Court has explained, “[b]road forum selection clauses . . . which
expressly cover . . . all claims between the contracting parties that ‘arise out of’ or
‘relate to’ a contract, apply not only to claims dealing directly with the terms of the
contract itself, but also to ‘any issues that touch on contract rights or contract
performance.’” ASDC Hldgs., LLC v. Richard J. Malouf 2008 All Smiles Grantor
Retained Annuity Tr., 2011 WL 4552508, at *5 (Del. Ch. Sep. 14, 2011). But the H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 13 of 19
California Blue Sky Claim arises from statements allegedly made in connection with
issuances that predated the Settlement Agreement and therefore does not “touch on”
any rights under, or the performance of, the Settlement Agreement.
Because the California Blue Sky Claim is not a dispute “arising out of, in
connection with, or in any way related to th[e] [Settlement] Agreement,” it does not
fall within the scope of the Settlement Agreement’s forum selection provision.
B. Forum Selection Provisions In The EPA And The Rollover
Agreement Are Unenforceable Here.
Plaintiffs argue that even if the Settlement Agreement’s forum selection
provision does not apply, forum selection provisions in the EPA and the Rollover
Agreement still support an anti-suit injunction. Plaintiffs are not likely to succeed
on the merits of this claim because the forum selection provisions in the EPA and
the Rollover Agreement purport to choose forums that lack subject matter
jurisdiction to decide the California Blue Sky Claim.
Forum selection clauses “are presumptively valid and should be specifically
enforced unless the resisting party clearly show[s] that enforcement would be
unreasonable and unjust, or that the clause [is] invalid for such reasons as fraud and
overreaching.” Sylebra Cap. P’rs Master Fund, Ltd. v. Perelman, 2020 WL
5989473, at *10 (Del. Ch. Oct. 9, 2020) (alterations in original) (quoting Ingres
Corp. v. CA, Inc., 8 A.3d 1143, 1146 (Del. 2010)). However, it is also “settled law H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 14 of 19
that parties may not confer subject matter jurisdiction by agreement.” Thompson v.
Lynch, 990 A.2d 432, 434 (Del. 2010).
Assuming, without deciding, that the California Blue Sky Claim falls within
the scope of the forum selection provisions in the EPA or Rollover Agreement, those
provisions cannot be enforced here because they choose the “Federal District Court
located in the District of Delaware or the Delaware Chancery Court” as the
“exclusive” forum for bringing a claim. EPA § 10.21; Rollover Agt. § 5(i). That is
problematic because neither the U.S. District Court for the District of Delaware nor
the Delaware Court of Chancery has subject matter jurisdiction over the California
Blue Sky Claim.
As the Delaware Supreme Court has previously held, “neither the Court of
Chancery nor the parties to a dispute can confer equitable jurisdiction where it is
otherwise lacking.” El Paso Nat. Gas Co. v. TransAmerican Nat. Gas Corp., 669
A.2d 36, 39 (Del. 1995), overruled on other grounds by Nat’l Indus. Gp. (Hldg.) v.
Carlyle Inv. Mgmt. L.L.C., 67 A.3d 373 (Del. 2013). “Jurisdiction over a party or
subject matter, or venue of a cause, can not be determined by private bargaining
where there is no other basis for such jurisdiction or venue.” Id. (citation omitted).
The U.S. District Court for the Southern District of California remanded the
California Action to state court for lack of subject matter jurisdiction, and the parties H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 15 of 19
appear to agree that there is no federal jurisdiction over the California Blue Sky
Claim. See Compl., Ex. J at 7 (remanding the California Action because the “claims
are matters of pure state law and do not depend upon the [Wellpath bankruptcy]”).
Plaintiffs argue instead that the Court of Chancery has subject matter jurisdiction
over the California Blue Sky Claim. It does not.
“The Delaware Court of Chancery is a court of equity. It has only that limited
jurisdiction that the Court of Chancery in England possessed at the time of the
American Revolution, or such jurisdiction as has been conferred upon it by the
Delaware General Assembly.” El Paso, 669 A.2d at 39. This Court “maintains
subject matter jurisdiction ‘only when (1) the complaint states a claim for relief that
is equitable in character, (2) the complaint requests an equitable remedy when there
is no adequate remedy at law or (3) Chancery is vested with jurisdiction by statute.’”
Smith v. Scott, 2021 WL 1592463, at *14 (Del. Ch. Apr. 23, 2021) (quoting Perlman
v. Vox Media, Inc., 2019 WL 2647520, at *4 (Del. Ch. June 27, 2019), aff’d, 249
A.3d 375 (Del. 2021) (TABLE)).
The California Action does not allege an equitable claim. The sole remaining
claim is the California Blue Sky Claim, a legal claim based on a statute. At oral
argument, Plaintiffs argued for the first time that jurisdiction in this Court should be
assessed at the time the California Action was filed, when the complaint in that H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 16 of 19
action alleged an equitable claim for breach of fiduciary duty. Draft Tr. at 23:11–
24:1. Even if Plaintiffs had not waived that argument by failing to brief it, it misses
the mark. Defendants could not create jurisdiction here by reasserting the breach of
fiduciary duty claim; they dismissed that claim because the entity defendants under
that claim remain parties in the bankruptcy action and are subject to an automatic
stay of litigation. MacLennan Aff., Ex. 29.
The California Action does not seek equitable relief. At oral argument,
Plaintiffs argued for the first time that the most appropriate relief for the California
Blue Sky Claim is rescission. Draft Tr. at 16:17–17:2. Even if Plaintiffs had not
waived that argument by failing to brief it, it ignores that the California Action seeks
only money damages. See Reply Br. in Supp. of Pls.’ Mot. for a Prelim. Anti-Suit
Inj. at 16, Dkt. 25 (“Defendants are not seeking [rescission] of any preferred units
they received or damages as measured under California’s Blue-Sky laws.”).
This Court also lacks statutory jurisdiction over the California Blue Sky
Claim. At oral argument, Plaintiffs argued that this Court has statutory jurisdiction
over the California Blue Sky Claim under 6 Del. C. § 18-111. Draft Tr. at 13:6–15,
15:5–13. Even if Plaintiffs had not waived this argument by failing to brief it, it is
wrong. Section 18-111 states:
H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
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Any action to interpret, apply or enforce the provisions of a limited
liability company agreement, or the duties, obligations or liabilities of
a limited liability company to the members or managers of the limited
liability company, or the duties, obligations or liabilities among
members or managers and of members or managers to the limited
liability company, or the rights or powers of, or restrictions on, the
limited liability company, members or managers, or any provision of
this chapter, or any other instrument, document, agreement or
certificate contemplated by any provision of this chapter, may be
brought in the Court of Chancery.
6 Del. C. § 18-111. The California Blue Sky Claim is not a claim to “interpret, apply
or enforce” a limited liability company agreement or the “duties, obligations or
liabilities” of a limited liability company or its members or managers. Nor is it a
claim to determine the “rights or powers of, or restrictions on,” a limited liability
company, its members or managers, or any provision of Delaware’s Limited
Liability Company Act. The California Blue Sky Claim is, instead, a California state
law securities fraud claim. The fact that the claim in some way concerns a Delaware
limited liability company does not confer jurisdiction under Section 18-111. See,
e.g., Sun Life Assurance Co. of Canada-U.S. Operations Hldgs., Inc. v. Gp. One
Thousand One, LLC, 206 A.3d 261, 265–70 (Del. Super. Ct. 2019) (concluding the H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
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Court of Chancery lacked jurisdiction under Section 18-111 over a claim for breach
of a stock purchase agreement with a limited liability company).2
Finally, Plaintiffs suggest this Court could exercise subject matter jurisdiction
over the California Blue Sky Claim if Defendants brought it as a counterclaim in this
action. Because such a counterclaim would dramatically expand the otherwise
narrow scope of this proceeding, which concerns only the applicability of forum
selection provisions to the California Action, I would be disinclined to extend
subject matter jurisdiction under the clean-up doctrine.
If the Court were to grant an anti-suit injunction based on the forum selection
provisions in the EPA or the Rollover Agreement, Defendants could not bring the
California Blue Sky Claim in any jurisdiction, since neither designated forum has
jurisdiction over the claim. As a result, those provisions cannot be enforced under
these circumstances. See El Paso, 669 A.2d at 41; Troy, 2007 WL 949441, at *3;
see also ASDC Hldgs., 2011 WL 4552508, at *4 (explaining that a forum selection
2
The Court’s lack of subject matter jurisdiction under Section 18-111 distinguishes this case from Village Green Holding, LLC v. Holtzman, 2018 WL 4849964 (Del. Ch. Oct. 5, 2018). There, the Court enforced a forum selection provision requiring claims to be litigated in “any United States District Court or Delaware state Chancery court” because the Court of Chancery had subject matter jurisdiction over the claims at issue—which required interpreting a limited liability company agreement and redemption agreement— under Section 18-111.
H.I.G. Capital, LLC, et al. v. Kristen Allred, et al.,
C.A. No. 2026-0343-BWD
August 10, 2026
Page 19 of 19
clause was “unenforceable as to the claims . . . because the parties impermissibly
had attempted to confer by agreement subject matter jurisdiction on the Court of
Chancery over all claims between the parties, legal and equitable”).
C. Plaintiffs’ Motion For A Preliminary Anti-Suit Injunction Is
Denied.
Because Plaintiffs have failed to demonstrate that they are likely to succeed
on the merits of their claims for breach of contract or declaratory judgment, I need
not further consider whether Plaintiffs face imminent, irreparable harm or whether
the balance of the equities supports entry of a preliminary anti-suit injunction. See
Next Level Commc’ns, Inc. v. Motorola, Inc., 834 A.2d 828, 856 (Del. Ch. 2003)
(declining to decide the existence of irreparable harm or the balance of equities
where plaintiffs failed to show a probability of success on the merits).
III. CONCLUSION
For the reasons explained above, the Motion is DENIED.
Sincerely,
/s/ Bonnie W. David
Bonnie W. David
Vice Chancellor
cc: All counsel of record (by File & ServeXpress)