Urvan v. AMMO, Inc., Consol. C.A. No. 2023-0470 PRW (Del. Ch. Feb. 27, 2024, corrected Mar. 14, 2024)

It is an axiom of Delaware law that a corporation acts through its human agents. This principle informs the causes of action available to would-be plaintiffs against a corporation and its human actors. This case follows the familiar fact pattern where, following a merger, a seller brings a variety of claims against the merged entity and its officers and directors. The plaintiff asserted an aiding and abetting fraud claim against the officers and directors of the company. The officers and directors moved to dismiss the aiding and abetting claim, arguing the intra-corporate conspiracy doctrine generally bars these types of claims because a corporation cannot conspire with itself or its agents. The exception to the general rule is when an “officer steps out of her corporate role and acts pursuant to personal motives.” Reviewing the allegations in the complaint, the Court found that the plaintiff failed to plead sufficient facts to establish that the officers and directors had acted out of their own personal motivations. The Court rejected the plaintiff’s conclusory argument that they participated in making misrepresentations in the merger agreement to hide their past wrongdoing; rather, the Court reasoned that in entering the transaction and making those representations “it seems apparent they were trying to get [the corporation] a favorable deal[.]” Thus, the Court dismissed the aiding and abetting claim.