Trial in this matter is scheduled for March 25 and 26.22 For the reasons I will explain, I recommend against certifying Tetragon’s question of contractual interpretation for interlocutory appeal. 2021-0007-MTZ Ma of 12 March 9, Ripple opposed the Application20 and moved for summary judgment 21 that motion remains pending. Tetragon also moved for expedited consideration of the Application,18 which I granted on March 8.19 On 14 See D.I. On March 5, I delivered my Ruling, denying Tetragon’s motion for a preliminary injunction.15 I found that Tetragon was not reasonably likely to prevail on the merits because neither the Wells Notice nor the enforcement action constituted a Securities Default pursuant to the plain language of the Shareholders’ Agreement.16 I also vacated the temporary restraining order.17 Tetragon filed its Application for certification of an interlocutory appeal on March 8, requesting that this Court allow the Supreme Court to review the meaning and application of the Securities Default provision. I heard argument on the preliminary injunction on February 17. 2021-0007-MTZ Ma of 12 The parties conducted fact and expert discovery, and briefed their positions on the preliminary injunction.14 The parties focused on whether the Wells Notice and enforcement action constituted a Securities Default as defined by the Shareholders’ Agreement.
2021-0007-MTZ Ma of 12 Agreement, Tetragon could demand redemption of its shares via a “Redemption Request” upon a Securities Default.8 Following receipt of a valid Redemption Request, the Stockholders’ Agreement required Ripple to redeem Tetragon’s shares within sixty days and apply all of its available cash and other assets to the redemption.9 Tetragon also moved for expedition and a temporary restraining order enjoining Ripple from using its assets for any purpose other than redemption of Tetragon’s shares.10 I heard those motions on January 15,11 and ordered expedition of the entire case, with a preliminary injunction hearing set for mid-February.12 I also entered a less burdensome temporary restraining order than Tetragon requested, which enjoined Ripple from making extraordinary, or “net negative,” purchases of its cryptocurrency, XRP, outside the ordinary course of business.13 7 Compl. District Court for the Southern District of New York.6 In addition to a declaration that a Securities Default occurred, Tetragon sought specific performance of its redemption right.7 Under the Stockholders’ 4 See generally D.I. Securities and Exchange Commission (or (1) another governmental authority or (2) a governmental agency of similar stature and standing) to constitute a security on a current and going forward basis (and not, for the avoidance of doubt, a determination that XRP was a security in the past).5 Tetragon contends each of two events constitutes a Securities Default: an October 2020 “Wells Notice” from the SEC, and a December 2020 enforcement action the SEC filed in the U.S. (“Ripple” or “Defendant”).4 Section 5.4 of the Stockholders’ Agreement defines a Security Default as follows: A ‘Securities Default’ means if XRP is determined on an official basis (including without limitation by settlement) by the U.S. Securities and Exchange Commission (the “SEC”) triggered the “Securities Default” provision in a contractual agreement (the “Stockholders’ Agreement”) between Tetragon and defendant Ripple Labs, Inc. BACKGROUND On January 4, 2021, Tetragon filed its complaint in this action, seeking, among other things, a declaration that certain actions by the U.S. This letter cites that transcript as “PI Ruling.” 3 PI Ruling 9:17–21. The transcript of the Ruling has been finalized and distributed to the parties, but not yet posted to the docket. 2021-0007-MTZ Dear Counsel: In this expedited contractual dispute, Plaintiff Tetragon Financial Group Limited (“Tetragon” or “Plaintiff”) has applied for certification of an interlocutory appeal (the “Application”)1 from this Court’s March 5 oral ruling and written order (collectively, the “Ruling”).2 The Ruling denied Tetragon’s motion for preliminary injunction, concluding that Tetragon was not reasonably likely to prevail on the merits at trial.3 For the following reasons, I deny Tetragon’s Application. Schulman, Esquire Abrams & Bayliss LLP 20 Montchanin Road, Suite 200 Wilmington, Delaware 19807 Tetragon Financial Group Limited v. Taylor, Esquire Ross Aronstam & Moritz LLP 100 South West Street, Suite 400 Wilmington, Delaware 19801 RE: Michael A. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734 MaGarrett B. COURT OF CHANCERY OF THE STATE OF DELAWARE LEONARD L.
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