Background
Nikita Bernstein co-founded MyJoVE Corporation in 2007 and initially served as Chief Technology Officer and director. He resigned in June 2011 but remained on the board until November 2011, when co-founders Moshe Pritsker and Klaus Korak removed him despite his objection. Bernstein retained his common stock and filed multiple books and records actions under Delaware Code Section 220 seeking information about director nominations, selection, and independence.
In December 2024, a prior books and records action revealed that MyJoVE had issued over $18 million in loans to directors Pritsker and Korak between 2021 and 2024. On April 18, 2025, Bernstein requested additional books and records about these Notes Receivable loans. Five days later, the controlling shareholders elected two new directors and removed Korak from the board. On July 27, 2025, Bernstein agreed to redeem 889,679 shares for $2.5 million pursuant to a redemption agreement containing a broad release clause.
On September 30, 2025, Bernstein’s counsel demanded books and records relating to the April 2025 board actions. MyJoVE refused to produce most documents, and Bernstein filed suit on March 4, 2026. The trial court found that a valid general release executed as part of the stock redemption barred the action.
The Court’s Holding
Magistrate David Hume, IV held that the general release in Bernstein’s redemption agreement was valid and enforceable, barring his direct books and records action. The release covered “any and all claims, charges, complaints, demands, actions, causes of action” and other enumerated categories “of every kind and nature” that Bernstein “ever had or now has” against the company and its affiliates. The court found this language clearly established the parties’ intent to release all personal claims in exchange for the stock buyback, and the language was not ambiguous.
Although the court acknowledged that the release does not prevent derivative actions—which belong to the corporation, not the individual shareholder—it held that a Section 220 books and records action is a direct action, not a derivative one. The court rejected Bernstein’s argument that Section 220 actions seeking information for future derivative litigation should be treated as derivative claims and thus exempted from the release. The court found no authority supporting an “intertwined” doctrine that would transform a direct Section 220 action into a derivative action merely because the records might support future derivative claims.
On notice, the court found that MyJoVE properly sent the Section 228 notice of board actions to Bernstein’s Massachusetts address on May 6, 2025, and that Bernstein received proper notice under Delaware statute and the common law mailbox rule. Although Bernstein’s counsel later indicated he had moved to Texas, this notification came after MyJoVE’s mailing and before Bernstein signed the release on July 27. The court found no duty to retroactively re-mail documents based on speculative notice of a move. The court also held that the release covered both known and unknown claims.
Key Takeaways
- Broad general release language using terms like “any and all claims” and “of every kind and nature” is enforceable and covers all direct claims, both known and unknown, even if not explicitly stated.
- A Delaware Section 220 books and records action is a direct action that may be barred by a general release, even if the shareholder intends to use the records in future derivative litigation.
- A release does not automatically bar derivative actions, which require express language and Court of Chancery approval under Rule 23.1, but this does not shield related direct actions from enforcement.
- Under Delaware Code Section 232, notice mailed to a shareholder’s last known address is effective upon mailing; there is no duty to re-mail based on later-discovered address changes occurring after the mailing.
Why It Matters
This decision strengthens the enforceability of general releases in stock redemption and buyback agreements. Shareholders considering settlement agreements with companies must carefully review release language, as broad terms will be interpreted to cover direct shareholder claims, including information-seeking actions. The ruling clarifies an important distinction: while derivative claims may be carved out from releases (with proper notice and court approval), direct claims including Section 220 books and records actions are fair game for release agreements.
For defendants, the decision provides strong protection when settling with shareholders, as long as the release uses sufficiently broad language. For sophisticated parties negotiating redemption agreements, the decision demonstrates that clear drafting—including explicit carve-outs for derivative claims if intended—will be honored by Delaware courts. The ruling also reaffirms that shareholders cannot strategically use Section 220 actions as an end-run around settled direct claims by recharacterizing them as precursors to derivative litigation.