A court ruling has found that an affiliate of LG Electronics Inc. did not have the right to terminate two founders of Alphonso Inc., an ad tech startup that LG acquired.
The Delaware Supreme Court affirmed the trial court’s decision on Monday, stating that Zenith Electronics LLC acted wrongfully when it removed the founders from their positions.
Initially, the Delaware Chancery Court determined in January 2024 that Alphonso’s interim CEO, appointed by an LG-controlled board, was obligated to adhere to a stockholders’ agreement. This agreement required the CEO to use “reasonable efforts” to protect the founders’ rights. The Vice Chancellor concluded that the CEO violated this clause by terminating the founders.
