In re Geneius Biotechnology, Inc.

In re Geneius Biotechnology, Inc.

Opinion

MEMORANDUM OPINION

MONTGOMERY-REEVES, Vice Chancellor.

The dispute in this case arises from business management disagreements between a minority stockholder and the founder of a biotechnology start-up company. The company is in the business of developing and manufacturing T-cell therapy technology implicated in treating and curing cancer. To do this, the company needs significant upfront capital, and the parties disagree, inter alia, about the manner in which the company should seek the much needed capital. Because of their disagreements, the minority stockholder petitioned this Court to appoint a receiver under 8 Del. C. § 291, alleging that the company is insolvent and a neutral party is necessary to salvage the company's remaining value, which is its intellectual property. [*2] 

The threshold issue in this case is whether the company is insolvent, which the petitioner has the burden to prove by clear and convincing evidence. But the petitioner attempts to prove insolvency without providing any opinion or evidence of the value of the company's assets. Consequently, I hold in this post-trial opinion that the petitioner has not met its burden of proving the company's insolvency by clear and convincing evidence; thus, the petitioner's request is denied.

I. BACKGROUND

On April 18, 2017, the petitioner filed a Verified Petition for Appointment of a Receiver Pursuant to 8 Del. C. § 291 (the "Petition") and a Motion to Expedite. On April 24, 2017, I granted the petitioner's Motion to Expedite, and the respondent filed a Response to the Petition on May 10. On July 12 and 19, 2017, the parties conducted trial, followed by extensive post-trial briefing.

These are my findings of fact based on the parties' stipulations, documentary evidence, and testimony of two live witnesses during trial. I accord the evidence the weight and credibility I find it deserves.¹

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