Delaware Chancery Nixes Section 225 Claim Over Fake Corporate Records

Delaware Court of Chancery denied relief in a Section 225 case citing fraudulent corporate documents.

The Delaware Court of Chancery issued a post-trial memorandum on March 27, 2026, in Ami Shafrir Berg v. Shai Bar-Lavi and Saul Bienenfeld, finding major issues with the authenticity of corporate documents submitted in a contested Section 225 action.

• The court found that plaintiff Berg had relied on fabricated documents to assert ownership and directorial control over Tracki, Inc.
• Vice Chancellor Will noted, "This suit is a product of mutual deceit. Both parties treated fundamental requirements of Delaware corporations—not to mention the most basic expectations of this court—as mere suggestions."
• Berg was held to lack authority to issue the 2025 Written Consents, making all related actions invalid.
• The court determined Berg was neither a stockholder nor director, stripping him of standing under Section 225 to seek resolution on corporate control.

Bad faith conduct prompted the court to shift half of the defendants’ attorneys’ fees and costs to the plaintiff. The defendants were also found to have engaged in backdating and false testimony, highlighting broader issues with both parties’ respect for corporate governance standards.

The court dissolved a prior interim order and denied the plaintiff’s enforcement motion as moot, drawing a line under the litigation. The case underscores Delaware’s continued insistence on accurate corporate records and honest dealings in governance disputes, reaffirming that falsified paperwork can result in dismissal and financial penalties.

The full opinion is available here and additional analysis can be found on LexBlog.

Yes, but: Both plaintiff and defendants engaged in improper conduct, but only the plaintiff’s action was dismissed and sanctioned.