Background
During an expedited trial, ATG Capital Opportunities Fund LP sought to maintain redactions in Joint Exhibit 955, a native spreadsheet containing its internal assessment of Empery Digital, Inc.’s stockholder electorate. The redactions concealed the names of stockholders selected by ATG.
ATG invoked Delaware’s business strategy immunity, contending that disclosure could allow the defendants to target particular stockholders and influence their votes outside the litigation. The parties submitted letters on August 3 and 4 addressing the dispute.
The Court’s Holding
Vice Chancellor Lori W. Will denied ATG’s request to maintain the redactions. Although the compilation may have assisted ATG in formulating a strategy, the court held that the underlying stockholder names were facts, not themselves a business strategy protected by the narrow, qualified business strategy immunity.
The court also concluded that the existing confidentiality order adequately addressed ATG’s asserted risk of non-litigation harm. ATG could designate the information Highly Confidential, limiting its use to the litigation. Rather than require an unredacted version of the dense spreadsheet during trial, the court ordered ATG to produce a standalone list of the previously redacted stockholder names by midnight; the list could be designated Highly Confidential.
Key Takeaways
- Business strategy immunity does not shield underlying factual information merely because it was used to develop a litigation or business strategy.
- Stockholder names are not, standing alone, a protected business strategy.
- A confidentiality order may mitigate claimed harms from disclosure and defeat a request to withhold relevant evidence.
Why It Matters
The ruling reinforces the Court of Chancery’s narrow approach to business strategy immunity, particularly in proxy-contest litigation. Parties cannot generally withhold relevant stockholder-identification evidence simply because an opponent could use it strategically outside the case.
It also illustrates a practical trial-management remedy: requiring production of a targeted list instead of reopening or reprocessing a burdensome native exhibit, while preserving confidentiality protections.