Klaassen v. Allegro Dev. Corp.

106 A.3d 1035 (Del. 2014)



A claimant is deemed to have acquiesced in a complained-of act where he has full knowledge of his rights and the material facts and (1) remains inactive for a considerable time; or (2) freely does what amounts to recognition of the complained of act; or (3) acts in a manner inconsistent with the subsequent repudiation, which leads the other party to believe the act has been approved. For the defense of acquiescence to apply, conscious intent to approve the act is not required, nor is a change of position or resulting prejudice. 


Plaintiff/appellant Klaassen claimed that the remaining Allegro directors, the defendants,  in removing him as CEO, violated an equitable notice requirement and also improperly employed deceptive tactics. After a trial and without addressing its merits, the Court of Chancery held that the claim was barred under the equitable doctrines of laches and acquiescence. Klaassen appealed from a Court of Chancery judgment.


Did the Court of Chancery err in holding that the claim was barred under the equitable doctrines of laches and acquiescence?




The Court held that (1) in a proceeding brought under Del. Code Ann. tit. 8, § 225, a determination that plaintiff was not the de jure CEO of a corporation was proper, as to the extent that plaintiff's claim could be cognizable, it was equitable in nature; therefore, his removal as CEO was, at most, voidable and subject to the equitable defenses of laches and acquiescence; (2) the Court of Chancery properly found that plaintiff acquiesced in his removal as CEO, and was therefore barred from challenging that removal, as whatever may have been his subjective intent, his conduct objectively evidenced that he recognized and accepted the fact that he was no longer CEO.

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