GREAT HILL EQUITY PARTNERS IV, LP v. SIG GROWTH EQUITY FUND I, LLLP

C.A. No. 7906-VCG.

GREAT HILL EQUITY PARTNERS IV, LP, GREAT HILL INVESTORS LLC, FREMONT HOLDCO, INC., and BLUESNAP, INC. (F/K/A PLIMUS), Plaintiffs, v. SIG GROWTH EQUITY FUND I, LLLP, SIG GROWTH EQUITY MANAGEMENT, LLC, AMIR GOLDMAN, JONATHAN KLAHR, HAGAI TAL, TOMER HERZOG, DANIEL KLEINBERG, IRIT SEGAL ITSHAYEK, DONORS CAPITAL FUND, INC., and KIDS CONNECT CHARITABLE FUND, Defendants.

Court of Chancery of Delaware.

Decided: December 3, 2018.


Attorney(s) appearing for the Case

Gregory V. Varallo , Rudolf Koch , and Robert L. Burns , of RICHARDS, LAYTON & FINGER, P.A., Wilmington, Delaware; OF COUNSEL: Stephen D. Poss and Adam Slutsky , of GOODWIN PROCTER LLP, Boston, Massachusetts, Attorneys for Plaintiffs.

William B. Chandler III , Ian R. Liston , and Jessica A. Hartwell , of WILSON SONSINI GOODRICH & ROSATI, P.C., Wilmington, Delaware; OF COUNSEL: Mark A. Kirsch , Scott A. Edelman , Aric H. Wu , Jeremy W. Stamelman , and Laura K. O'Boyle , of GIBSON, DUNN & CRUTCHER LLP, New York, New York, Attorneys for Defendants SIG Growth Equity Fund I, LLLP, SIG Growth Equity Management, LLC, Amir Goldman, Jonathan Klahr, Donors Capital Fund, Inc., and Kids Connect Charitable Fund.

Lewis H. Lazarus and Meghan A. Adams , of MORRIS JAMES LLP, Wilmington, Delaware; OF COUNSEL: Peter N. Flocos and Joanna A. Diakos , of K&L GATES LLP, New York, New York, Attorneys for Defendants Tomer Herzog and Daniel Kleinberg.

David S. Eagle and Sean M. Brennecke , of KLEHR HARRISON HARVEY BRANZBURG LLP, Wilmington, Delaware; OF COUNSEL: Michael K. Coran , William T. Hill , Monica Clarke Platt , and Gregory R. Sellers , of KLEHR HARRISON HARVEY BRANZBURG LLP, Philadelphia, Pennsylvania, Attorneys for Defendants Hagai Tal and Irit Segal Itshayek.


MEMORANDUM OPINION

This matter involves the acquisition of a California company, Plimus, by a private equity firm, Great Hill. Plimus's business was to facilitate transactions between online retailers of digital goods and credit card holders. Under Plimus's model, it operated as a "reseller...

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