CHANCERY COURT ISSUES DECLARATORY JUDGMENT REGARDING BOARD AND MEMBER ACTIONS TAKEN IN CONTRAVENTION OF CORPORATION’S BYLAWS
By: Susan A. Apel & Rachel Cheasty Sanders
In Rainbow Mountain, Inc. v. Terry Begeman, C.A. No. 10221-VCMR (Del. Ch. March 23, 2017), the Delaware Court of Chancery issued a declaratory judgment on cross-motions for summary judgment regarding whether pro se defendant, Terry Begeman, was properly removed as a director, member, and officer of plaintiff nonstock corporation Rainbow Mountain, Inc. (“Rainbow Mountain” or the “corporation”). Based on uncontroverted facts, the Court determined that Terry had been properly removed as Secretary, but retained his position as Senior Vice-President, director and member. Under the bylaws, as a “Regular Member” of Rainbow Mountain, Terry had the right to occupy the corporation’s land.