Current Month (July 2026)
Delaware Court of Chancery Outlines How to Ensure the Enforceability of an Arbitration Provision Within a Purchase Agreement
By Romney Harris, 3L Law Student at Campbell University Norman Adrian Wiggins School of Law
The Court of Chancery of the State of Delaware in Quentin Bichon v. Sharding Capital Management, LLC et al., C.A. No. 2025-1310-LWW (Del. Ch. July 21, 2026) recently enforced an arbitration clause within a purchase agreement, holding that the Court of Chancery lacked subject matter jurisdiction over the matter due to clear and unmistakable evidence that the parties intended for an arbitrator to decide questions of substantive arbitrability. This case offers unique insight as to how arbitration clauses should be written to maximize the chance of its enforceability.
The case arises from the plaintiff’s attempted purchase of 22,115 shares of Series A preferred stock of Securitize, Inc. which was held by the defendant. The stock was never actually transferred due to an undisclosed dispute, causing the plaintiff to file his complaint initiating this dispute. The defendant eventually transferred the shares, providing the equitable relief the plaintiff sought, leaving only his request for attorneys’ fees to remain. The defendant moved to dismiss under Rule 12(b)(1), arguing that an arbitrator, and not the court, has the jurisdiction to review all claims subject to this dispute.
The Court began its analysis by noting that substantive arbitrability, or whether parties agreed to arbitrate, is generally decided by the Court except when there is clear and unmistakable evidence that the parties intended otherwise. For there to be “clear and unmistakable” evidence, the Court utilized the Willie Gary two-prong test: (1) the arbitration provision generally refers all disputes to arbitration, and (2) the provision references a set of arbitral rules. The inclusion of these rules is vitally important, as they create a strong presumption that the parties intended to refer all claims to the arbitrator. The Court held that Section 7 of the Purchase Agreement expressly complied with both prongs, as it stated that “all controversies . . . shall be resolved by binding arbitration . . . conducted by JAMS [an arbitration provider with a specific set of rules and procedures] if available . . . .” The Court did note that although section 7 of the purchase agreement included a sole exception to the arbitration provision, for parties seeking injunctive relief, the Willie Gary test does not require the entirety of the dispute to be referred to arbitration if the agreement carves out exceptions.
Accordingly, the Court concluded that it lacked subject matter jurisdiction, as the arbitration provision clearly and unmistakably delegated authority to an arbitrator to determine the plaintiff’s remaining sole claim of attorneys’ fees.
North Carolina Court Allows Delaware LLCs’ Claims for Breach of Fiduciary Duty Against Former General Counsel and CEO to Survive but Dismisses Claims for Breach of Noncompete
By Nicholas Perkins, Garrett, PLLC; Ashley Oldfield, Rayburn, Cooper, & Durham, P.A.; and Shawn Garrett, Garrett PLLC
On July 23, 2026, the North Carolina Business Court issued its order and opinion on a motion to dismiss in the case of Highlights Healthcare, LLC v. Abell, which involved a business dispute between the founders, executives, owners, and managers of three related companies—Highlights Healthcare, LLC (“Highlights”), a Delaware LLC providing autism therapy services; Empyrean Hospice, LLC, a Delaware LLC providing hospice services; and HLRE, LLC (“HLRE”), a North Carolina LLC serving as a real estate holding company (collectively, the “Companies”). The Companies brought suit against their former general counsel and CEO Douglas Abell (“Abell”) and against another former CEO, James Magee (“Magee”), alleging, inter alia, that Abell and Magee had secretly worked on a competing hospice venture while still employed and serving as executives for the Companies. Defendants moved to dismiss a number of the claims under Rule 12(b)(6).
The Companies alleged that Abell breached his fiduciary duties to them by establishing a competing business, disclosing the Companies’ confidential information to the competing business, and executing unauthorized promissory notes payable to himself and his wife. The Court concluded that, under either North Carolina or Delaware law, the Companies had sufficiently alleged that Abell, as CEO and general counsel, owed fiduciary duties to the Companies and that his alleged conduct, if proven, could constitute a breach of his duties. The Court rejected defendants’ argument that the claim failed because the Companies didn’t allege any harm since neither North Carolina nor Delaware require a plaintiff to plead actual damages to state a claim for breach of fiduciary duty.
Highlights also alleged that Abell and Magee had breached their noncompete agreements. However, the Court concluded that the noncompetes were overbroad and unenforceable as a matter of law for several reasons. First, they prohibited Abell and Magee from “directly or indirectly” engaging in the business. North Carolina courts routinely refuse to enforce noncompetes with such language. Second, the geographic scope of the noncompetes was not specifically defined. And third, because the noncompetes extended to any areas in which the Companies may “actively plan to” conduct business, the restrictions were not narrowly tailored to the areas in which defendants worked or the areas in which Highlights conducted business or had existing goodwill. Accordingly, the Court dismissed the claim for breach of the noncompetes.
Abell and Magee also sought dismissal of the Companies’ claims for breach of North Carolina’s Unfair and Deceptive Trade Practice Act (“UDTP”), which were based on defendants’ alleged misappropriation of trade secrets and tortious interference with the Companies’ contracts. Because these underlying claims survived dismissal and could form the basis for a UDTP claim, the Court denied the motion to dismiss the UDTP claims.
