The Delaware Supreme Court has sided against an affiliate of LG Electronics Inc. in a legal battle concerning the termination of two founders from Alphonso Inc., an ad tech startup. The ruling, issued Monday, affirms a trial court’s previous determination that Zenith Electronics LLC, an entity associated with LG, had wrongfully dismissed the founders.
The case stems from the acquisition of Alphonso by LG. The Delaware Chancery Court initially ruled in January 2024 that the interim CEO of Alphonso, who was appointed by a board controlled by LG, was obligated to adhere to a stockholders’ agreement. This agreement stipulated the use of “reasonable efforts” to safeguard the rights of the founders.
The court found that the interim CEO breached this clause of the agreement when the founders were terminated. Further details about the Vice Chancellor’s reasoning were included in the original filing from the court but are not included here.
