COURT OF CHANCERY
OF THE
STATE OF DELAWARE
DAVID HUME, IV COURT OF CHANCERY COURTHOUSE MAGISTRATE IN CHANCERY 34 THE CIRCLE
GEORGETOWN, DE 19947
October 1, 2026
David L. Finger (#2556) Sean A. Meluney (#5514)
Finger & Slanina, LLC Matthew D. Beebe (#5980)
1201 N. Orange St., 7th floor Meluney Alleman & Spence, LLC
Wilmington, DE 19801-1186 1143 Savannah Rd., Suite 3-A
Lewes, DE 19958
RE: Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.
C.A. No. 2025-1011-DH
Dear Counsel:
This letter decision resolves Defendants’ Nissim Black’s and Hava Nation
Corp.’s motion to dismiss Plaintiff Lawrence Pinczower’s Complaint. Pinczower
asserts eleven direct and derivative claims arising from his involvement with Hava
Nation. For the reasons explained below, I recommend that the motion be denied as
to Counts V and VI and granted as to all other counts.
I. FACTUAL BACKGROUND1
1
I draw the following facts from Plaintiff’s Verified Complaint (“Compl.”), Docket Item
(“D.I.”) 1, as well as the Employment Agreement (“Emp. Agrmt.”), attached as Exhibit N
thereto; Defendant Nissim Black’s Waiver (“Waiver”), attached as Exhibits K and K2
thereto; Plaintiff Lawrence Pinczower’s Indemnity Agreement (“Indem. Agrmt.”),
attached as Exhibit L thereto; and non-party Neil Shaw’s Email (“Shaw Email”), attached
as Exhibit M thereto. I take all adequately alleged facts as true for the purpose of this
Motion to Dismiss. I refer to the parties’ briefing as follows: Defendants Nissim Black’s
and Hava Nation Corp.’s Opening Brief in Support of their Motion to Dismiss Plaintiff’s Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
Page 2 of 48
Hava Nation Corp. (“Hava Nation” or the “Company”) is a Delaware
corporation formed to develop and market a whiskey brand called “Hava.”2 The
origins of the Hava brand date to 2021, when Nissim Black conducted a small-batch
test run of the product after producing a music video titled “The Hava Song.”3
Before Plaintiff Lawrence Pinczower’s involvement with Hava Nation, four
individuals played key roles in the Company: Black; Neil Shaw, Hava Nation’s seed
investor and former co-director; Yehoshua Werth, its operations manager and blend
master; and then-General Counsel Steven Sabel.4 Black, Werth, and Sabel worked
together to develop the business plan for Hava Nation.5 The plan contemplated an
initial launch of 20,000 triple-blend whiskey bottles and the importation of
approximately 5,000 bottles of selected Scottish whiskey.6
Verified Complaint (“DOB”), D.I. 19; Plaintiff’s Answering Brief in Opposition to Defendants’ Motion to Dismiss (“PAB”), D.I. 21; Defendants Nissim Black’s and Hava Nation Corp.’s Reply Brief in Support of their Motion to Dismiss Plaintiff’s Verified Complaint (“DRB”), D.I. 22; and Defendants’ Motion to Dismiss Transcript (“MTD Tr.”), D.I. 28.
2
Compl. ¶¶ 11, 17, 29.
3
Id. ¶ 30.
4
Id. ¶¶ 27–28; DOB p. 3.
5
Compl. ¶ 28.
6
Id. ¶ 29.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
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Before March 12, 2025, Black and Shaw requested that Pinczower prepare
various legal documents for Shaw’s review, including a memorandum of
understanding (the “MOU”), a founder’s agreement, employment agreements for
Black, Sabel, and Werth, and an employee stock option plan (the “ESOP”).7 Shaw
approved these documents.8
On March 14, Shaw invested $1.2 million in Hava Nation.9 Soon thereafter,
between late March and late April, Black made twenty separate withdrawals or
transfers from the Company’s account.10 Shaw estimated the transactions at
approximately $150,000, although the Complaint elsewhere alleges an amount
between approximately $128,000 and $150,000.11 Once discovered, Shaw proposed
reducing Black’s holdings by 5,000 shares to offset the amount Shaw believed Black
had withdrawn.12 Instead, on April 24, Black executed a $100,000 loan agreement
7
Id. ¶ 26.
8
Id. ¶ 31.
9
Id. ¶ 31.
10
Id. ¶¶ 2, 21, 32.
11
Id.
12
Id. ¶ 33.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
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with Hava Nation that required ten equal monthly payments beginning in June
2025.13
Around this time, Shaw sought to terminate Sabel and contacted Pinczower to
assist with Sabel’s termination.14 Shaw simultaneously invited Pinczower to replace
Sabel as Hava Nation’s general counsel, and Black approved Pinczower’s
appointment.15 Pinczower advised Shaw that he would wait to formally join Hava
Nation until Sabel’s employment ended to avoid overlap between the two General
Counsel positions.16 Pinczower also requested documentation from Black and Shaw
confirming their consent to his representation and eventual onboarding.17
On May 9, 2025, Black executed a waiver and consent letter permitting
Pinczower to assist Shaw with Sabel’s termination and afterward join Hava Nation.18
Five days later, Shaw introduced Pinczower during a Company meeting and
informally welcomed him to Hava Nation.19 By May 19 Pinczower had provided
13
Id. ¶ 34.
14
Id. ¶ 35.
15
Id. ¶ 35.
16
Id. ¶ 36.
17
Id.
18
Id. ¶ 37.
19
Id. ¶ 41.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
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Shaw with a draft employment agreement (the “Employment Agreement”), to which
Shaw replied: “Thanks. Works for me, including 4a. I suggest dating the PDF
Monday, May 19 and I’ll sign on that date.”20 But Shaw did not sign it. Pinczower
alleges that his employment therefore became effective on May 19.21 On May 23,
Shaw executed an indemnification letter in Pinczower’s favor concerning Sabel’s
termination and Pinczower’s onboarding.22
Under the Employment Agreement, Pinczower was to receive, among other
things, a $100,000 annual net salary, $15,300 in Social Security tax payments, 5,000
immediately vested common shares, 5,000 stock options, up to $7,000 in benefits,
severance rights, and a $6,250 signing bonus for his prior legal services.23 For what
the Complaint describes as a “ministerial convenience,” Pinczower initially directed
that his shares be registered in the name of his Delaware holding company, NPH
LLC.24
20
Id. ¶¶ 42; Ex. M.
21
Id. ¶¶ 39, 42.
22
Id. ¶ 38.
23
Id. ¶¶ 43–44.
24
Id. ¶ 9.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
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On May 29, 2025, Sabel’s offboarding concluded through a General Release
Agreement between Sabel and Shaw on behalf of Hava Nation.25 During this period,
Pinczower performed various general counsel duties, including attending Company
meetings, preparing minutes, negotiating contracts, conducting legal research,
communicating with outside counsel, and acting as a liaison among Shaw, Black,
and Werth.26 Pinczower notified the Company of the trademark on May 21 and
discussed it at a Company meeting later that day.27 To address the potential
trademark issue, Pinczower proposed an alternative brand, “Seven Shepherds,”
vetted the name, and reserved relevant domain names.28
On June 4, 2025, Shaw sought to replace Black with Pinczower as Hava
Nation’s Chief Executive Officer (“CEO”) and invited Pinczower to join the
Company’s board of directors.29 Shaw verbally offered Pinczower an additional
9,700 shares, equal to 10% of the then-issued 97,000 shares, and additional cash
25
Id. ¶ 42.
26
Id. ¶¶ 45–49.
27
Id.
28
Id. ¶ 51.
29
Id. ¶ 53.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
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compensation in an undetermined amount.30 By June 5, Pinczower had begun acting
in the CEO role.31
On June 9, 2025, Shaw wrote to Black and Pinczower confirming his desire
for Pinczower to replace Black as CEO, the award of an additional 9,700 shares to
Pinczower, and anticipated additional cash compensation.32 During a recorded
Company meeting later that day, Pinczower was formally introduced as Hava
Nation’s new CEO.33 Black did not object to the change or the additional equity
and, according to Pinczower, later expressed approval of the transition because it
would allow Black to focus on the Company’s branding and marketing efforts.34
Two days later, Shaw attempted to terminate Pinczower.35 Pinczower alleges
that Shaw attempted to do so in retaliation for Shaw’s unsuccessful effort to obtain
shareholder control of Hava Nation.36 Shaw also informed Black that he intended
to withdraw the approximately $960,000 remaining from his original investment,
30
Id. ¶ 54.
31
Id. ¶ 55.
32
Id. ¶ 56.
33
Id. ¶¶ 46, 57.
34
Id. ¶ 57.
35
Id.
36
Id.
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October 1, 2026
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purportedly because he and Pinczower could not agree on the full scope of
Pinczower’s compensation as CEO.37 Black later told Pinczower, both orally and in
writing, that Shaw had acted unilaterally, and that Black had not consented to
Pinczower’s termination.38
Pinczower thereafter made several demands for payment.39 On June 12, 2025,
he sent Shaw a $50,000 invoice for legal services rendered in connection with
Sabel’s termination.40 On June 15, Pinczower sent Shaw an initial demand for
amounts due under the Employment Agreement.41 On June 17, he expanded that
demand to seek the full amount allegedly due under his Employment Agreement.42
Also on June 17, Pinczower purported to impose an equitable lien on Sabel’s 5,000
stock options based on unpaid legal fees arising from Sabel’s termination.43 On June
22, Pinczower sent Shaw another demand letter asserting that Shaw’s 40,000 shares
37
Id.
38
Id. ¶ 61.
39
Id. ¶ 60
40
Id.
41
Id.
42
Id.
43
Id.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
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October 1, 2026
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would be subject to an equitable lien for unpaid legal fees and amounts allegedly
due under Pinczower’s Employment Agreement.44
Meanwhile, Black failed to make the payments required under his April 24
loan agreement.45 Pinczower alleges that the loan went into default in June 2025,
accelerating the outstanding balance.46
On June 24, 2025, approximately $960,000 was transferred out of Hava
Nation accounts without first satisfying the amounts Pinczower claimed were owed
to him for legal fees, salary, bonus, severance, expenses, and other obligations.47
Pinczower alleges that Black participated in or acquiesced in the transfer and
personally received an undisclosed portion of the funds.48 Shaw thereafter exited
the Company.49
Following Shaw’s exit, Pinczower resubmitted to Black the payment demands
he had previously made to Shaw and demanded that Black update Hava Nation’s
44
Id.
45
Id. ¶ 34.
46
Id.
47
Id. ¶ 59.
48
Id. ¶¶ 2, 69–70.
49
Id. ¶¶ 15, 62.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
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October 1, 2026
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capitalization records to recognize Pinczower’s claimed equity interests.50
Pinczower contends that through the enforcement of his asserted equitable liens
against Shaw’s shares and stock obtained from the Employment Agreement, he
became Hava Nation’s majority shareholder as of June 24.51
On June 26, 2025, Pinczower filed a petition with the United States Patent and
Trademark Office (“USPTO”) seeking cancellation of the pre-existing Hava
trademark registration.52 Pinczower alleges that this work fell outside the scope of
the services contemplated by his Employment Agreement.53 On July 25, the USPTO
cancelled the pre-existing Hava registration, and Pinczower later sought $24,525
from Hava Nation for those services, alleging that the Company benefited from the
cancellation.54
Pinczower continued to assert rights concerning payment, equity, and
capitalization tables against Hava Nation and Black.55 His asserted liens ultimately
50
Id. ¶ 62.
51
Id. ¶¶ 18, 80.
52
Id. ¶ 66.
53
Id. ¶ 66.
54
Id. ¶¶ 67–68.
55
Id. ¶¶ 52, 59–65.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
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October 1, 2026
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encompassed Sabel’s 5,000 options, Shaw’s 40,000 shares, and Black’s shares.56 On
July 19, 2025, Pinczower served Black with a demand letter.57 Five days later,
Pinczower issued Black a final notice of lien and termination warning, providing
Black with what Pinczower characterized as a final 24-hour opportunity to cure.58
On July 25, 2025, claiming authority as Hava Nation’s majority shareholder,
Pinczower purported to terminate Black’s employment, remove him from the board
of directors, dismiss him as an officer, impose a lien on Black’s shares, and invoke
share-forfeiture provisions.59 Pinczower thereafter updated the Company’s
capitalization tables to reflect Black’s termination, the asserted lien against Black’s
shares, and the equity interests Pinczower claims should be registered in his personal
name.60
Despite his purported termination, Black continued to hold himself out as Hava
Nation’s CEO, director, and majority stockholder.61 Pinczower further alleges that
Black engaged with the Company’s Scottish whiskey supplier in violation of the
56
Id. ¶ 52, 65, 81.
57
Id. ¶ 63.
58
Id. ¶¶ 19, 64.
59
Id. ¶¶ 19–21, 65.
60
Id. ¶¶ 65, 80–82.
61
Id. ¶ 23.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
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October 1, 2026
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twelve-month non-compete provision in Black’s employment agreement.62
Although Pinczower contends that Black’s termination became effective at 5:01 p.m.
on July 25, written confirmation of the termination was sent to Black on August 4,
2025.63 Black continued to dispute Pinczower’s claimed share ownership and
corporate authority, while Pinczower maintained that he was Hava Nation’s sole
lawful director.64
Pinczower brings eleven direct and derivative claims against Black and Hava
Nation.65 Pinczower premises his derivative claims against Black on Black’s alleged
misuse of Company funds, participation in the June 24 defunding, failure to repay
the $100,000 Loan Agreement, and violation of his post-termination non-compete.66
Pinczower claims that this conduct constitutes breach of fiduciary duty, an unlawful
distribution under 8 Del. C. § 174, and breach of the loan agreement, and warrants
imposing a constructive trust or equitable lien over the allegedly diverted funds.67
62
Id.
63
Id. ¶ 21.
64
Id. ¶¶ 22–24, 83.
65
Id. ¶¶ 69–88.
66
Id. ¶¶ 69–70, 76–78.
67
Id. ¶¶ 69–70, 76–77.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
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Pinczower premises his direct claims against Hava Nation principally on the
alleged validity and breach of his Employment Agreement.68 He claims that Hava
Nation assented to and ratified the Employment Agreement through the parties’
writings and conduct, but later breached the agreement by failing to pay his
compensation, issue his shares and options, and properly terminate his
employment.69 In the alternative, Pinczower seeks recovery under theories of
promissory estoppel and quantum meruit for the benefits Hava Nation allegedly
received from his services.70 He also seeks declaratory and injunctive relief
recognizing his claimed equity interests and corporate positions.71
Counts I and II assert derivative claims against Black arising from his alleged
misuse and diversion of Company funds.72 Counts III and IV seek a declaration that
the Employment Agreement is valid and enforceable and assert breach of that
agreement, respectively.73 Counts V and VI plead promissory estoppel and quantum
68
Id. ¶¶ 72–73.
69
Id. ¶¶ 72–73.
70
Id. ¶¶ 74–75.
71
Id. ¶¶ 72, 79–88.
72
Id. ¶¶ 69–70.
73
Id. ¶¶ 72–73.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
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meruit in the alternative.74 Counts VII through IX assert derivative claims seeking
a constructive trust or equitable lien over allegedly diverted Company assets,
enforcement of Black’s loan agreement with Hava Nation, and enforcement of the
non-compete provision in Black’s employment agreement, respectively.75 Finally,
Counts X and XI seek declaratory and injunctive relief concerning Pinczower’s
claimed equity interests and rights as a Hava Nation stockholder, officer, and
director.76
Defendants moved to dismiss the Complaint in its entirety.77 They contend
that Pinczower’s derivative claims fail because he did not initially comply with Rule
23.1, lacks stockholder standing, and independently fails to plead those claims
adequately.78 They separately seek dismissal of the direct claims premised on the
Employment Agreement and contend that, if the remaining claims are dismissed, the
Court lacks subject matter jurisdiction over Counts V and VI.79
74
Id. ¶¶ 74–75.
75
Id. ¶¶ 76–78.
76
Id. ¶¶ 79–88.
77
D.I. 13.
78
DOB pp. 20–24; 33–48; DRB pp. 1–3.
79
DOB pp. 24–30, 48–51; DRB p. 30.
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II. ANALYSIS
A. Pinczower Properly Cured the Rule 23.1 Procedural Defects.
When Pinczower sued, he did so pro se and without the affidavit required by
Court of Chancery Rule 23.1. After oral argument, however, Pinczower was given
20 days to obtain Delaware counsel for his derivative claims and file the Rule 23.1
affidavit.80 Pinczower cured these procedural defects when he filed a Rule 23.1(b)
affidavit on July 2, and his counsel entered an appearance on July 6.81
B. Pinczower Failed to Effect Proper Service on Black.
Pinczower made four attempts to serve Black, who was then in Israel: in
person, by email, through WhatsApp, and by registered mail. None effected service.
“In considering a 12(b)(2) motion, the court employs a two-step analysis: the
court must first determine that service of process is authorized by statute and then
must determine that the exercise of jurisdiction over the nonresident defendant
comports with traditional due process notions of fair play and substantial justice.”
Sustainability Partners LLC v. Jacobs, 2020 WL 3119034, at *5 (Del. Ch. Jun. 11,
2020) (citation modified). “When a defendant moves to dismiss a complaint
pursuant to Court of Chancery Rule 12(b)(2), the plaintiff bears the burden of
80
MTD Tr. 50:13–22.
81
D.I. 26; 27.
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showing a basis for the court’s exercise of jurisdiction over the defendant.” Ryan v.
Gifford, 935 A.2d 258, 285 (Del. Ch. 2007) (citing Werner v. Miller Tech. Mgmt.,
L.P., 831 A.2d 318 (Del. Ch. 2003)). In ruling on a Rule 12(b)(2) motion where no
evidentiary hearing has yet occurred, “plaintiffs need only make a prima facie
showing of personal jurisdiction and the record is construed in the light most
favorable to the plaintiff.” Ryan v. Gifford, 935 A.2d 258, 285 (Del. Ch. 2007)
(citation modified).
Similarly, Court of Chancery Rule 12(b)(5) requires that personal jurisdiction
be acquired through proper service of process. Shurr v. Mun. City of Newark, Del.,
2004 WL 332508, at *1 (D. Del. Jan. 28, 2004). Actual notice by a defendant
without service of process will not suffice. Id. Thus, under Court of Chancery Rules
12(b)(2) and (5), “where a plaintiff has failed to obtain personal jurisdiction over
each of the defendants through proper service of process, the case must be
dismissed.” Id. at *2.
When service of process requires the transmission of judicial documents
abroad, the Hague Service Convention applies. Daskin v. Knowles, 193 A.3d 717,
723 (Del. 2018). Article 5 of the Hague Service Convention (“Article 5”) provides
for service through the destination state’s Central Authority, which serves the
documents or arranges for their service by a method prescribed by the destination Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
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state’s internal law or, unless incompatible with that law, by a particular method
requested by the applicant. Convention on the Service Abroad of Judicial and
Extrajudicial Documents in Civil or Commercial Matters, art. 5, Nov. 15, 1965, 20
U.S.T. 361 [hereinafter Hague Service Convention].
Article 10 of the Hague Service Convention (“Article 10”) provides additional
channels of transmission where the destination state does not object, including
transmission through postal channels under Article 10(a) and certain forms of direct
service through judicial officers, officials, or other competent persons under Articles
10(b) and (c). Id. at art. 10. Israel has declared that, for purposes of Articles 10(b)
and (c), it will effect service only through its Directorate of Courts and only upon an
application emanating from a judicial authority or the diplomatic or consular
representation of a Contracting State. See Israel – Declarations and Reservations,
Hague Service Conference on Private International Law,
https://www.hcch.net/en/notifications/?csid=405&disp=resdn (last visited Oct. 1,
2026).
Delaware law separately governs the permissible methods of service. Court
of Chancery Rule 4(d) permits personal service on an individual by delivering
process personally, leaving process at the individual’s dwelling with an appropriate
resident, delivering process to an authorized agent, or serving process pursuant to a Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
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Court order directing another or additional mode of service. 10 Del. C. § 3104(d)
similarly provides that extraterritorial service, when reasonably calculated to give
actual notice, may be made:
(1) By personal delivery in the manner prescribed for service within
[Delaware]. (2) In the manner provided or prescribed by the law of the
[destination state]. . . . (3) By any form of mail addressed to the person
to be served and requiring a signed receipt. (4) As directed by a court.
10 Del. C. § 3104(d).
Pinczower attempts to serve Black by email and WhatsApp did not comply
with these requirements. Neither method is authorized by Section 3104(d) absent a
court order permitting an alternative mode of service, and Pinczower never sought
or obtained such an order. Accordingly, Pinczower’s unilateral electronic
transmissions did not effect service of process.82
Pinczower’s attempted in-person service was likewise insufficient. Court of
Chancery Rule 4(c)(1) provides that “[s]ervice of process means service of both the
82
In Plaintiff’s Answering Brief, Plaintiff relies on three cases to support his assertion that service was effectuated via email and WhatsApp: FTC v. PCCare247, Inc., 2013 WL 841037, at *4–5 (S.D.N.Y. Mar. 7, 2013); Rio Properties, Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1015–18 (9th Cir. 2002); and Kumar v. Alhunaif, 2023 WL 8527671, at *4–5 (S.D.N.Y. Dec. 8, 2023). Those cases do not support Plaintiff’s position. In each, the party seeking to effectuate service first sought leave to employ an alternative method of service – a step Plaintiff did not take here. Indeed, Rio explained that “a plaintiff may not generally resort to email service on [their] own initiative,” and distinguished itself from WAWA, Inc. v. Christensen, 1999 WL 557936, at *1 (E.D.Pa. July 29, 1999), where the plaintiff attempted service by email without first obtaining a court order. Rio, 284 F.3d at 1018. Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
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summons and the complaint” and requires that “[t]he summons and complaint . . .
be served together.” Ct. Ch. R. 4(c)(1). When Pinczower delivered the Complaint
to Black on September 8, 2025, no summons had been issued. Pinczower
acknowledges as much in his PAB and does not characterize the September 8
delivery as formal completion of service.83 Thus, regardless of whether personal
delivery otherwise complied with the Hague Convention or Section 3104, the
September 8 delivery did not effect service because Pinczower did not serve Black
with a summons.
Pinczower also attempted service by registered mail. Article 10(a) permits
service through postal channels where the destination state has not objected and the
otherwise-applicable law authorizes service by mail. See Water Splash, Inc. v.
Menon, 581 U.S. 271, 284 (2017) (holding that Article 10(a) encompasses service
by mail when the receiving state has not objected and service by mail is authorized
under otherwise-applicable law). Israel has objected to Article 10(a) only with
respect to documents addressed to the State of Israel, its political subdivisions,
agencies, authorities, and instrumentalities, as well as certain government officials
or agents. See Israel – Declarations and Reservations, Hague Service Conference
83
PAB p. 34.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
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on Private International Law,
https://www.hcch.net/en/notifications/?csid=405&disp=resdn (last visited Oct. 1,
2026). Because Black is a private individual, Israel’s limited objection does not
preclude service through postal channels in this case.
Delaware law permits extraterritorial service “[b]y any form of mail addressed
to the person to be served and requiring a signed receipt.” 10 Del. C. § 3104(d)(3).
Pinczower represents that he sent the summons and Complaint to Black by registered
mail, and return receipt requested.84 But he has produced no return receipt, proof of
delivery, or other evidence that the mailing arrived. Cf. VanGorder v. VanGorder,
2026 WL 1758693, at *4 (Del. June 17, 2026) (reversing dismissal for insufficient
service where certified mail was delivered and signed for by an agent and the trial
court nevertheless required proof that the defendant personally received the
mailing). Unlike VanGorder, the record here contains no evidence that Pinczower’s
mailing was ever delivered. Accordingly, Pinczower has not established that his
attempt at service by registered mail effectuated service on Black.
Pinczower separately argues that service on Hava Nation’s registered agent
constituted valid statutory service on Black under 10 Del. C. § 3114.85 Pinczower’s
84
Id.
85
Id. pp. 33–34.
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reliance on Section 3114, however, is misplaced. Section 3114(a) provides that a
nonresident who accepts directorship or serves as a director of a Delaware
corporation is deemed to have consented to the corporation’s registered agent acting
as the director’s agent for service of process. 10 Del. C. § 3114(a). That consent
extends to actions involving the corporation in which the director is a necessary or
proper party and actions against the director for violations of duties owed in that
capacity. Id. To effect service under Section 3114, however, process must be served
on the corporation’s registered agent, and the Register in Chancery must then mail
copies of the process to the corporation’s principal place of business and the
director’s or officer’s residence or last-known address. See 10 Del. C. § 3114(c);
ATO Enterprises of Delaware, LLC v. Cabrera, 2022 WL 2678613, at *4 n.45 (Del.
Ch. July 12, 2022).
Although Pinczower properly served Hava Nation through its registered
agent, he did so under Section 3104.86 Service on Hava Nation as a corporate
defendant under Section 3104 does not, without more, constitute service on Black
through Hava Nation’s registered agent under Section 3114. Indeed, Sections 3104
and 3114 are “so different insofar as their function and purpose” that they cannot be
86
See D.I. 9; D.I. 14 p. 3 (requesting that service be effectuated “pursuant to 9 [sic] Del. C. sec. 3104”).
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
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read as pertaining to the same subject matter. Tabas v. Crosby, 444 A.2d 250, 255
(Del. Ch. 1982). Here, the record does not reflect compliance with the procedure
prescribed by Section 3114(c), including the required mailing by the Register in
Chancery. Accordingly, Pinczower cannot rely on his service of Hava Nation under
Section 3104 to establish service on Black under Section 3114, and the claims
against Black are dismissed for insufficient service of process. But setting aside
Pinczower’s procedural failings, his arguments fail on the merits of the Motion to
Dismiss.
C. The Employment Agreement Did Not Become Binding.
It is well settled that under Court of Chancery Rule 12(b)(6) the complaint
will be dismissed where the plaintiff would not be entitled to recovery “under any
reasonably conceivable set of circumstances . . . susceptible of proof.” Cent. Mort.
Co. v. Morgan Stanley Mortg. Cap. Hldgs., 27 A.3d 531, 535-36 (Del. 2011). While
the Court must accept all well-pleaded allegations as true, id., it need not “accept
conclusory allegations unsupported by specific facts . . . or draw unreasonable
inferences in favor of the non-moving party.” Price v. E.I. DuPont de Nemours &
Co., Inc., 26 A.3d 162, 166 (Del. 2011), overruled on other grounds by Ramsey v.
Ga. S. Univ. Advanced Dev. Ctr., 189 A.3d 1255, 1277 (Del. 2018). The Court need Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
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not “accept every strained interpretation of the allegations proposed by the plaintiff.”
Malpiede v. Townson, 780 A.2d 1075, 1083 (Del. 2001).
Taken together, Section 327 of Title 8 of the Delaware Code and Court of
Chancery Rule 23.1 prescribe the two minimal requirements that must be met by a
plaintiff seeking to initiate a derivative action: (1) that the plaintiff be a stockholder
of the corporation at the time he commences the suit and (2) that the plaintiff
continue to maintain their status as shareholder throughout litigation. Parfi Hldg.
AB v. Mirror Image Internet, Inc., 954 A.2d 911, 935 (Del. Ch. 2008) (internal
citations omitted).
Pinczower claims that he is a Hava Nation stockholder through his
Employment Agreement,87 under which he was set to receive 5,000 shares of Hava
Nation common stock, to be vested immediately upon execution of the agreement,
and options to purchase an additional 5,000 shares.88 As a preliminary matter of
87
Compl. ¶¶ 9, 18, 43, 60, 80–82. The Complaint also appears to premise Pinczower’s stockholder status on purported equitable liens against shares held by Shaw, Black, and Sabel. See Compl. ¶ 80 (alleging that Pinczower became the “majority shareholder (by way of equitable lien against Shaw’s shares)”). Defendants challenged that theory in their Opening Brief. DOB pp. 30–33. In response, Pinczower clarifies that his invocation of equitable liens “concerns the remedy available after liability is established.” PAB p. 32. I therefore do not consider the purported liens as an independent basis for Pinczower’s stockholder status.
88
Emp. Agrmt. § 4(a).
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timing, even if the Employment Agreement had become binding on May 19, 2025,
as Pinczower alleges, Black’s March-April withdrawals precede that date.89
Pinczower therefore lacks standing under Section 327 to pursue a derivative claim
based on those withdrawals. Accordingly, Pinczower’s standing to pursue derivative
claims based on later conduct turns on whether the Employment Agreement became
binding.
1. Texas Law Governs the Formation Issue for Purposes of the
Motion.
The Employment Agreement provides that it “shall be governed and
interpreted in accordance with Texas law.”90 Because the existence of an
enforceable Employment Agreement is itself disputed, however, I do not rely on that
provision to determine the law governing contract formation. Instead, because
Pinczower applies Texas law and Defendants, while reserving the choice-of-law
issue, assume for purposes of the Motion to Dismiss that Texas law applies, I assume
without deciding that Texas law governs Pinczower’s contract claims.91
Under Texas law, a valid contract requires “(1) an offer; (2) acceptance in
strict compliance with the terms of the offer; (3) a meeting of the minds; (4) each
89
Compl. ¶¶ 31, 42–43.
90
Emp. Agrmt. § 19.
91
PAB p. 25; DOB p. 24 n.2.
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party’s consent to the terms; and (5) execution and delivery of the contract with the
intent that it be mutual and binding.” Levetz v. Sutton, 404 S.W.3d 798, 803 (Tex.
App. 2013) (citing Cessna Aircraft Co. v. Aircraft Network, L.L.C., 213 S.W.3d 455,
465 (Tex. App. 2006)). And “where an offer prescribes the time and manner of
acceptance, those terms must ordinarily be complied with to create a contract.”
Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex. 1995).
Mostly, mutual assent to a written contract is evidenced by the parties’
signatures and delivery with the intent to bind, but neither is essential to contract
formation. Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007); Phillips
v. Carlton Energy Grp., LLC, 475 S.W.3d 265, 277 (Tex. 2015). Thus, “[a] contract
need not be signed to be ‘executed’ unless the parties explicitly require signatures as
a condition of mutual assent.” Mid-Continent Cas. Co. v. Global Enercom Mgmt.
Inc., 323 S.W.3d 151, 157 (Tex. 2010) (citations omitted). Whether a signature is
required therefore turns on the parties’ intent. If the parties unconditionally assent
to the terms of an agreement, the absence of a signature does not prevent contract
formation; but if they intend that the agreement be signed before becoming binding,
no contract arises until that condition occurs. Simmons & Simmons Constr. Co. v.
Rea, 286 S.W.2d 415, 418 (Tex. 1955). Whether the parties intended formal
execution as a prerequisite to contract formation is ordinarily a question of fact, Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
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although in appropriate circumstances that issue may be resolved as a matter of law.
Foreca, S.A. v. GRD Dev. Co., Inc., 758 S.W.2d 744, 746 (Tex. 1988); Scaife v.
Associated Air Ctr., Inc., 100 F.3d 406, 410–11 (5th Cir. 1996).
In determining whether the parties intended a written agreement to be binding
before formal execution, the Texas Supreme Court has looked at the circumstances
identified in Section 27 of the Restatement (Second) of Contracts. Foreca, S.A. v.
GRD Dev. Co., Inc., 758 S.W.2d 744, 746 n.2 (Tex. 1988). Those circumstances
include:
the extent to which express agreement has been reached on all the terms
to be included; whether the contract is of a type usually put in writing;
whether it needs a formal writing for its full expression; whether it has
few or many details; whether the amount involved is large or small;
whether it is a common or unusual contract; whether a standard form of
contract is widely used in similar transactions; and whether either party
takes any action in preparation for performance during the negotiations. Restatement (Second) Of Contracts § 27 cmt. c (A.L.I. 1981).
a. The /s/ Notation Does Not Establish Execution of the
Employment Agreement.
Pinczower first argues that the Employment Agreement was executed because
its signature page contains typed /s/ notations above the signature line for both Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
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Pinczower and Shaw.92 Below is an image of the Employment Agreement’s
signature page.93 Pinczower alleges that this represents the signed version:
Notably, the Employment Agreement expressly calls for execution by “actual
or facsimile signature.”94 Pinczower claims that the /s/ notation constitutes an
electronic signature under the Texas Uniform Electronic Transactions Act and that
an electronic signature satisfies the Employment Agreement’s requirement of an
92
PAB pp. 14 n.16, 25.
93
Compl. Ex. N at 16.
94
Emp. Agrmt. § 17.
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“actual or facsimile signature.”95 I need not decide whether an electronic signature
constitutes an “actual” signature under the Employment Agreement because
Pinczower’s argument fails at an earlier step.
Texas defines an “electronic signature” as “an electronic sound, symbol, or
process attached to or logically associated with a record and executed or adopted by
a person with the intent to sign the record.” TEX. BUS. & COM. CODE §
322.002(8). Thus, the mere presence of an electronic symbol on a document does
not establish that it is the identified person’s electronic signature. Instead, the
symbol must have been executed or adopted by that person with the intent to sign
the record. Section 322.009 similarly provides that an electronic signature is
attributable to a person “if it was the act of the person,” which may be shown in any
manner. Id. § 322.009(a). The effect of an attributed signature is determined from
“the context and surrounding circumstances at the time of its creation, execution, or
adoption.” Id. § 322.009(b).
Pinczower concedes that he was the one who placed the /s/ notation above
Shaw’s signature block.96 Shaw therefore did not place the notation himself.
95
PAB pp. 14 n.18, 25; Emp. Agrmt. § 17.
96
MTD Tr. 42:17–21 (“With regards to Your Honor’s specific question as to the existence of the /s/ for the signatures, that was typed in by plaintiff on both the plaintiff’s side as well as the company’s side and was ratified, once again, by Mr. Shaw.”).
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Pinczower nevertheless contends that Shaw subsequently “ratified” the notation.97
To the extent Pinczower contends that Shaw adopted the /s/ notation as his electronic
signature, Texas law requires that Shaw have done so “with the intent to sign the
record.” Id. § 322.002(8). The surrounding circumstances do not support such a
conclusion. After Pinczower supplied Shaw with a redlined draft of the Employment
Agreement, Shaw replied: “Thanks. Works for me, including 4a. I suggest dating
the PDF Monday, May 19 and I’ll sign on that date.”98 Shaw’s statement that he
would sign the Employment Agreement on May 19 contemplates a future act of
signing rather than the adoption of the /s/ notation already placed there by
Pinczower. Accordingly, the/s/ notation does not establish that Shaw electronically
signed the Employment Agreement.
b. The Parties Contemplated Execution as the Means of
Manifesting Assent.
Having concluded that the typed notations do not establish execution of the
Employment Agreement, I turn to whether the parties nevertheless intended to be
bound in the absence of their signatures. The Fifth Circuit confronted a similar
question in Scaife v. Associated Air Ctr., Inc., 100 F.3d 406 (5th Cir. 1996).
97
PAB pp. 14–15, 25–26.
98
Shaw Email.
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In Scaife, the Fifth Circuit considered whether parties negotiating the
renovation of an aircraft intended to be bound before formal execution of their
written agreement. 100 F.3d at 406–08. The negotiations began when Scaife began
soliciting bids for the renovation, and Associated Air Center (“AAC”) sent Scaife’s
chief pilot a proposal accompanied by a letter requesting that he execute the
agreement and “return one fully executed copy.” Id. at 407.
Negotiations ensued, and the proposed agreement underwent several
revisions. Id. at 407–08. Although the anticipated execution date passed without an
executed agreement, Scaife deposited $800,000 into his bank account in anticipation
of the first installment, prepared a check payable to AAC, arranged three months of
lodging for his chief pilot, and informed two competing bidders that he had selected
AAC for the renovation. Id. at 411.
When Scaife’s counsel eventually asked why AAC had not sent the agreement
for execution, AAC disclosed that concerns had arisen regarding the scope of the
proposed work and asked whether Scaife would consider changes to reduce AAC’s
costs. Id. at 408. Scaife declined and insisted that AAC honor the negotiated, but
unsigned, agreement. Id. No version of the agreement was ultimately delivered and
signed by both parties, and Scaife sued after AAC refused to perform. Id. at 408,
411.
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The Fifth Circuit held that the evidence offered established “that the parties
intended to manifest their assent through a formal written contract signed by both
parties.” Id. at 411. Several features of the proposed agreement informed that
conclusion. The proposal contained signature blocks and provided:
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized representative at Dallas, Texas, on
the date first above written.
Id. The agreement also made one-third of the contract price due upon signing and
prohibited modification except by a writing signed by both parties. Id. at 410. And
the parties’ communications continued to contemplate future execution of the
agreement. Id. at 410–11. Taken together, these circumstances demonstrated that
the parties intended formal execution, rather than agreement on the negotiated terms
alone, to manifest their assent. Id. at 411.
The court arrived at this conclusion notwithstanding Scaife’s conduct in
anticipation of performance. Although Scaife had deposited funds, prepared a
check, arranged lodging, and rejected other bidders, those actions did not
demonstrate that AAC intended to be bound absent execution. Instead, the Fifth
Circuit reasoned that “[n]o evidence show[ed] that AAC began work on the aircraft
or acted in any affirmative manner to assent to the agreement notwithstanding the
lack of delivery and formal execution of the contract.” Id. at 411.
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Here, unlike in Scaife, Pinczower alleges that he performed under the
Employment Agreement and that Hava Nation accepted his performance.99 That
said, Pinczower’s performance and Hava’s acceptance of his services still must be
considered alongside the evidence of how the parties intended to manifest assent to
the Employment Agreement. Several features of the Employment Agreement
resemble those in Scaife.
The Employment Agreement contained signature blocks.100 The signature
page contains the following clause:
IN WITNESS WHEREOF, the Company and the Executive have
executed this Agreement as of the date and year first above written.101
The Employment Agreement included a $6,250 signing bonus due within 48 hours
of signing.102 The Employment Agreement contemplated that any discharge,
modification, waiver, or termination be evidenced by a signed writing.103 Further,
the Employment Agreement states that “[t]he execution of [the Employment
Agreement] may be by actual or facsimile signature.”104 These provisions are much
99
Compl. ¶¶ 45–49, 72; PAB pp. 22–23.
100
Emp. Agrmt. p. 16.
101
Id.
102
Id. § 23.
103
Id. § 20.
104
Id. § 17.
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like the evidence of intent relied upon in Scaife. Like the agreement there, the
Employment Agreement contained signature blocks and execution language, tied a
payment obligation to signing, and required certain future changes to be
memorialized in a signed writing. Taken together, these provisions establish that the
parties contemplated signing as the means by which they would manifest assent.
The parties’ contemporaneous communications further support that
conclusion. As discussed above, after receiving the final draft, Shaw responded:
“Thanks. Works for me, including 4a. I suggest dating the PDF Monday, May 19
and I’ll sign on that date.”105 Pinczower characterizes “Works for me” as Shaw’s
acceptance of the Employment Agreement.106 But Shaw’s response distinguishes
between agreement on the terms and the contemplated act of execution. His
statement that the terms “[w]ork[] for me” was immediately followed by his
statement that “I’ll sign on that date.” As in Scaife, the Shaw’s response, therefore
contemplated signature as the means of manifesting assent, notwithstanding their
agreement on the terms.
105
Shaw Email.
106
PAB pp. 13–14, 25–26.
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That conclusion does not end the inquiry. Pinczower relies on the parties’
conduct both before and after May 19 as evidence that Hava assented to the
Employment Agreement notwithstanding the contemplated execution.107
c. The Waiver and Indemnification Agreement Do Not
Establish Assent to the Employment Agreement.
On May 8, 2025, Pinczower and Black executed a waiver and consent letter
(the “Waiver”).108 In the Waiver, Pinczower disclosed potential conflicts arising
from his prior representation of Black and sought Black’s informed consent to
Pinczower representing Hava Nation or Shaw.109 Black signed the Waiver, thereby
acknowledging his consent to Pinczower joining Hava Nation as legal counsel and
waiving potential conflicts arising from Pinczower’s prior representation of
Black.110 Pinczower nevertheless relies on the Waiver as evidence that Hava Nation
assented to the Employment Agreement because Black and Shaw then constituted
Hava Nation’s board.111
107
PAB pp. 14–18, 25–26.
108
Waiver; Compl. ¶ 37.
109
Waiver.
110
Waiver; Compl. ¶ 37.
111
PAB pp. 14–15, 25–26.
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The Waiver does not support that inference. It does not purport to execute or
approve the Employment Agreement, nor does it reference the Employment
Agreement or its compensation and equity terms. Instead, Black consented to
Pinczower joining Hava Nation as legal counsel for purposes of addressing the
potential conflicts identified in the Waiver.112 And the Employment Agreement
called for execution by Shaw and Pinczower—not Black. Black’s execution of the
Waiver therefore does not satisfy the contemplated execution of the Employment
Agreement.
The timing of the Waiver further undermines Pinczower’s reliance on it as
evidence of assent to the Employment Agreement. Black executed the Waiver on
May 8, before Shaw’s May 19 email stating, “Works for me, including 4a. I suggest
dating the PDF Monday, May 19 and I’ll sign on that date.”113 That communication
indicates that the parties were addressing the terms of the Employment Agreement
after Black executed the Waiver. Thus, even assuming Black’s execution of the
Waiver could evidence assent to the Employment Agreement, it does not establish
112
Waiver; see also Compl. ¶ 37. Black was giving his informed consent to a conflict of interest, not executing the Employment Agreement.
113
Waiver; Shaw Email; see Compl. ¶¶ 37, 52.
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his assent to the terms of the Employment Agreement subsequently presented to
Shaw for execution.
Pinczower also points to a May 23 indemnification agreement (the
“Indemnification Agreement”), which he drafted, as evidence that Shaw had already
assented to the Employment Agreement and subsequently ratified it.114 The
Indemnification Agreement provides Pinczower with additional protection related
to his assistance in Sabel’s termination and potential resulting litigation. 115 It also
memorializes Shaw’s invitation for Pinczower to join Hava Nation as legal counsel
and contemplates responsibilities Pinczower would undertake in that role.116
The Indemnification Agreement was executed four days after Shaw’s May 19
email and therefore provides some evidence that Shaw continued to contemplate
Pinczower joining Hava Nation as legal counsel.117 It confirms Shaw’s invitation
for Pinczower to replace Sabel as general counsel and describes responsibilities that
overlap with the Employment Agreement’s job description.118 Pinczower argues
114
Indem. Agrmt.; Compl. ¶¶ 38–40; PAB pp. 14–15, 25–26.
115
Indem. Agrmt.; Compl. ¶ 38.
116
Indem. Agrmt.; Compl. ¶ 38.
117
Indem. Agrmt.; Shaw Email; Compl. ¶¶ 38, 42.
118
Indem. Agrmt.; Emp. Agrmt.
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that these similarities, together with the timing of the Indemnification Agreement,
evidence Shaw’s ratification of the Employment Agreement.119
But the Indemnification Agreement does not reference or incorporate the
Employment Agreement, state that the Employment Agreement had been executed
or become effective, or expressly adopt its terms.120 Instead, it states, “You confirm
that at this time you initiated to me a formal invitation to join the Company as legal
counsel and liaison . . . .”121 Pinczower acknowledges the Indemnification
Agreement’s prospective language but attributes it to the parties executing several
documents in a different sequence than originally contemplated.122 Even accepting
that explanation, the Indemnification Agreement objectively confirms Shaw’s
invitation for Pinczower to serve as Hava Nation’s legal counsel; it does not connect
that relationship to the terms of the Employment Agreement. Nor does it suggest
that Shaw intended his execution of the Indemnification Agreement to substitute for
his contemplated execution of the Employment Agreement.
119
PAB pp. 14–15.
120
Indem. Agrmt.
121
Id.; see also Compl. ¶ 38.
122
PAB p. 15 n.20.
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d. Hava Nation’s Subsequent Conduct Does Not
Establish Assent to the Employment Agreement.
Pinczower further argues that Hava Nation’s subsequent conduct ratified the
Employment Agreement.123 It does not. As the Texas Supreme Court has explained,
“[i]t is the undoubted rule that where the contract contemplates the execution of it
by signing either party has the right to insist upon the condition, and mere acts of
performance upon the part of one who has not signed will not validate the contract.”
Simmons & Simmons Const. Co. v. Rea, 286 S.W.2d 415, 418 (Tex. 1955) (quoting
1 Williston on Contracts, p. 59, s 28.28a). Where signing is a condition of assent,
the relevant inquiry is whether the party’s subsequent “acts, words or conduct”
reasonably give rise to an inference that the party nevertheless intended to assent to
the agreement in the absence of the contemplated signature or “intended to waive
signing as a condition of such assent.” Id. at 419.
Simmons illustrates this principle. There, a general contract and subcontractor
agreed on the essential terms of a subcontract, which the general contractor reduced
to a formal written agreement. Id. at 416. The agreement provided for signatures
by both parties and required the subcontractor to furnish a performance bond “after
signing.” Id. The general contractor instructed the subcontractor to obtain the bond,
123
Id. pp. 15–18, 26.
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sign the agreement, and return it for the general contractor’s signature. Id. Although
the subcontractor complied, the general contractor declined to sign the agreement.
Id. The Texas Supreme Court held that the circumstances demonstrated that the
general contractor intended signing to be a condition of its assent. Id. at 418-19. In
reaching that conclusion, the court reasoned that nothing in the general contractor’s
“acts, words or conduct” reasonably gave rise to an inference that it “intended to
assent to the instrument in the absence of the signatures of the parties or that [it]
intended to waive signing as a condition of such assent.” Id. at 419.
The same reasoning applies here. As explained above, the parties
contemplated signatures as a condition of assent to the Employment Agreement.
Pinczower nevertheless points to his subsequent performance and Hava Nation’s
acceptance of his services, including his performance of general counsel duties,
Hava Nation’s identification of him as its legal counsel in dealings with outside
counsel, and his later promotion to CEO.124 Those allegations reasonably support
an inference that Hava Nation authorized Pinczower to perform services on its behalf
and accepted those services. But they do not reasonably support the further inference
that Hava Nation intended to assent to the Employment Agreement notwithstanding
124
Id.
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the absence of the contemplated signatures or intended to waive signing as a
condition of that assent. See Simmons, 286 S.W.2d at 419.
Most importantly, the alleged conduct does not objectively connect
Pinczower’s performance to the Employment Agreement. In Simmons, the Texas
Supreme Court distinguished Girard Life Insurance, Annuity & Tr. Co. v. Cooper,
where the parties had agreed upon the terms of a construction contract and the
contractor was expressly directed to proceed with the work. 162 U.S. 529, 543
(1896). The contractor then completed the work in accordance with the agreed-upon
plans and specifications. Id. at 540, 543. Under those circumstances, the Supreme
Court concluded that the parties had reached an agreement before performance
began and that “the preparation and signing of a formal writing would only have
called into existence additional evidence of the fact.” Id. at 543; see Simmons, 286
S.W.2d at 418-19 (distinguishing Girard).
Here, by contrast, Pinczower does not allege that Hava Nation directed him to
perform under an already-completed agreement or subsequently represented that the
Employment Agreement had become effective. Although Hava Nation’s conduct
may demonstrate that Pinczower performed services for the Company and that the
Company accepted those services, it does not, without more, reasonably support an Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
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inference that Hava Nation thereby dispensed with the contemplated execution and
assented to the terms of the Employment Agreement.
Pinczower claims that his performance of general counsel duties, Hava
Nation’s acceptance of those services, the Company’s dealings with outside counsel
through Pinczower, and his subsequent promotion to CEO and invitation to join the
Board evidence assent to the Employment Agreement.125 These actions, taken
together, do not reasonably support an inference that Hava Nation intended to assent
to the Employment Agreement notwithstanding the absence of the contemplated
signatures or intended to waive signing as a condition of that assent. None of that
conduct references the Employment Agreement, represents that it had become
effective, or otherwise objectively connects Hava Nation’s acceptance of
Pinczower’s services to the terms of the Employment Agreement.
Because the Employment Agreement never became binding, Pinczower
cannot obtain a declaration that the Employment Agreement is valid and enforceable
or maintain a claim for breach of that argument. Counts III and IV are therefore
dismissed.
D. Pinczower Cured His Rule 23.1 Procedural Defects but Lacks
Derivative Standing.
125
Id.
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A more fundamental defect remains: Pinczower is not a Hava Nation
stockholder. “Section 327 is clear that stock ownership at the time of challenged
conduct is a prerequisite to maintaining a derivative action . . . .” Desimone v.
Barrows, 924 A.2d 908, 927 (Del. Ch. 2007).
Pinczower’s remaining claim to stockholder status rests on the Employment
Agreement, which provided for 5,000 shares to vest immediately upon execution.126
Still, the Employment Agreement never became binding because the parties did not
execute it in the manner they contemplated. Because the Employment Agreement
never became binding, it did not confer the shares on which Pinczower bases his
stockholder status. He therefore lacks standing to pursue his derivative claims, and
Counts I, II, VII, VIII, and IX are dismissed.
E. Counts X and XI Fail Because Pinczower Has No Enforceable
Right to the Equity Interests or Corporate Positions He Claims.
Counts X and XI rest on Pinczower’s asserted ownership of Hava Nation
equity and his purported status as a Hava Nation officer and director.127 Count X
seeks declarations confirming Pinczower’s ownership of the shares, stock options,
liens, and equity interests reflected in his capitalization-table updates.128 Count XI,
126
Emp. Agrmt. § 4(a); Compl. ¶¶ 9, 43(B).
127
Compl. ¶¶ 79–88.
128
Id. ¶¶ 80–84.
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in turn, seeks injunctive relief preventing Defendants from interfering with his
asserted rights as a stockholder, officer, and director, as well as enforcement of a
non-compete provision.129 To the extent Counts X and XI depend on equity
promised under the Employment Agreement, they fail for the reasons already
explained: the agreement never became binding and thus conferred no shares or
options to Pinczower.
Pinczower also claims ownership of Hava Nation equity through “equitable
liens” that he purported to impose on shares and options held by Sabel, Shaw, and
Black.130 Title 8 Section 324 provides a statutory procedure for attaching shares of
stock to satisfy a debt or other demand. When a debtor appears on a corporation’s
books as holding or owning shares, options, or an interest therein, those interests
may be attached under § 324. 8 Del. C. § 324(a). The attachment process is served
on an officer, director, or registered agent of the corporation, after which the
corporation must certify the interests its books reflect as belonging to the debtor. Id.
§ 324(b). Any eventual sale requires a court order, and no order of sale may issue
until entry of a final judgment. Id. § 324(a). Only after the resulting sale is
completed and confirmed does the purchaser become entitled to the shares or other
129
Compl. ¶¶ 86–88.
130
Id. ¶¶ 18, 52, 60, 65, 80–81.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
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interests sold. Id. § 324(c). And a valid equitable lien does not grant the lienholder
the ability to vote the shares.
Pinczower followed none of these procedures. Instead, he purported to
impose “equitable liens” unilaterally on Sabel’s, Shaw’s, and Black’s equity
interests and afterward treated those liens as conferring ownership upon himself.
Even assuming Pinczower possessed a debt or other demand that could support
attachment of those interests, nothing in § 324 permits a creditor to obtain ownership
of another person’s shares merely by declaring a lien against them.
Nor do the allegations support Pinczower’s claimed status as a Hava Nation
officer or director. Although Shaw invited Pinczower to join the Board and sought
to replace Black with Pinczower as CEO, the Complaint does not allege that
Pinczower was elected to the Board as required by Hava Nation’s bylaws.131
Likewise, the bylaws provide that Hava Nation’s executive officers “shall be chosen
by the Board of Directors” and require the primary terms of an officer’s employment
to be set forth in an employment agreement between the officer and the Company.
The Complaint does not allege that the Board took formal action to appoint
131
Id. ¶¶ 53–57; see also Compl. Ex. I.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
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Pinczower as CEO, and, as explained above, Pinczower never entered into a binding
Employment Agreement with Hava Nation.
Thus, the predicates underlying Counts X and XI fail. Pinczower did not
acquire the shares or options contemplated by the Employment Agreement, his
purported liens did not confer ownership of the shares held by others, and he was
neither elected a Hava Nation director nor appointed CEO in accordance with the
Company’s bylaws. Counts X and XI are therefore dismissed.
F. The Court Retains Subject-Matter Jurisdiction Over Pinczower’s
Promissory Estoppel and Quantum Meruit Claims.
In Counts V and VI, Pinczower pleads promissory estoppel and quantum
meruit in the alternative and seeks compensation for services he allegedly provided
to Hava Nation.132 Defendants do not seek dismissal of Counts V and VI on the
merits, but argue that if the Court dismisses Pinczower’s other claims, Counts V and
VI should be dismissed for lack of subject-matter jurisdiction because they seek
purely legal relief.133 The dismissal of those claims, however, would not necessarily
deprive the Court of jurisdiction over Counts V and VI.
132
Compl. ¶¶ 74–75.
133
DRB p. 30.
Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
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A Court of Chancery Rule 12(b)(1) motion to dismiss will be granted “if it
appears from the record that the Court does not have jurisdiction over the claim.”
Duff v. Innovative Discovery LLC, 2012 WL 6096586, at *4 (Del. Ch. Dec. 7, 2012)
(citation modified). The Court of Chancery can acquire subject matter jurisdiction
over a case in three ways: “(1) the invocation of an equitable right; (2) a request for
an equitable remedy when there is no adequate remedy at law; or (3) a statutory
delegation of subject matter jurisdiction.” Israel Disc. Bank of N.Y. v. First State
Depository Co., 2012 WL 4459802, at *4 (Del. Ch. Sep. 7, 2012) (citing ASDC
Hldgs., LLC v. Richard J. Malouf 2008 All Smiles Grantor Annuity Trust, 2011 WL
4552508, at *4 (Del. Ch. Sep. 14, 2011)). The plaintiff bears the burden of
establishing jurisdiction. Israel Disc. Bank of N.Y. v. First State Depository Co.,
2012 WL 4459802, at *4 (Del. Ch. Sep. 7, 2012).
Once the court has subject matter jurisdiction over at least one claim, it may
exercise jurisdiction over related legal claims under the cleanup doctrine. Darby
Emerging Markets Fund, L.P. v. Ryan, 2013 WL 6401131, at *8 (Del. Ch. Nov. 27,
2013). The cleanup doctrine “provides the Court of Chancery with jurisdiction to
resolve purely legal causes of action that are before it as part of the same controversy
over which the Court originally had subject matter jurisdiction in order to avoid
piecemeal litigation.” Kraft v. WisdomTree Investments, Inc., 145 A.3d 969, 974 Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
Page 47 of 48
(Del. Ch. 2016). The cleanup doctrine may be invoked for a variety of reasons,
including avoiding multiplicity of suits, promoting judicial efficiency, and affording
complete relief in one action. Darby Emerging Markets Fund, L.P., 2013 WL
640113, at *8.
Wal-Mart Stores, Inc. v. AIG Ins. Co. is particularly informative. 2006 WL
3742596 (Del. Ch. Dec. 12, 2006). There, the Court of Chancery considered whether
it retained jurisdiction over Wal-Mart’s sole remaining legal claim after the
Delaware Supreme Court affirmed the dismissal of Wal-Mart’s equitable claims. Id.
at *2–3. The Court retained jurisdiction for reasons of “efficiency and judicial
economy,” reasoning that its jurisdiction over a controversy is generally determined
at the time the complaint is filed and remains unaffected by post-complaint
developments. Id. at *3 (quoting Giordano v. Marta, 1999 WL 350493, at *2 (Del.
Ch. Apr. 28, 1999). Wal-Mart thus illustrates that the subsequent dismissal or
mootness of equitable claims does not automatically divest the Court of jurisdiction
over remaining legal claims.
While Defendants are correct that Counts V and VI seek purely legal relief,
the Court should nevertheless retain jurisdiction over those claims for reasons of
judicial efficiency under the cleanup doctrine. At the time the Complaint was filed,
Pinczower asserted eleven distinct causes of action, several of which directly invoke Lawrence E. Pinczower v. Nissim Black and Hava Nation Corp.,
C.A. No. 2025-1011-DH
October 1, 2026
Page 48 of 48
the Court’s equitable jurisdiction.134 Count I asserts a claim for breach of fiduciary
duty; Count VII seeks to impose a constructive trust; Count IX seeks injunctive relief
for violation of a non-compete provision; and Count XI, seeks injunctive relief
enforcing Pinczower’s alleged share-ownership rights and the non-compete
provision.135 Because the Complaint invoked equitable jurisdiction when filed, the
subsequent dismissal of those claims does not automatically require dismissal of the
related legal claims in Counts V and VI. The Court will therefore exercise its
discretion under the cleanup doctrine to retain them in the interest of judicial
efficiency.
III. CONCLUSION
For the reasons explained above, I recommend that Counts V and VI not be
dismissed and that the remaining counts be dismissed. This is a report pursuant to
Court of Chancery Rule 144.
Sincerely,
/s/ David Hume, IV
David Hume, IV
Magistrate in Chancery
cc: All counsel of record (by File & ServeXpress)
134
Compl. ¶¶ 69–88.
135
Id. ¶¶ 69, 76, 78, 85–88.