Rhodes v. Silkroad Equity, LLC

In Rhodes v. Silkroad Equity, LLC, CIV A 2133-VCN, 2007 WL 2058736 (Del Ch July 11, 2007), the court held that the plaintiffs could proceed with direct claims even though their claims "did not fit snuggly within the transactional paradigm.'" In Rhodes, the plaintiffs alleged that the defendants purposely took actions against the corporation's interests in order to lower its value and drive out the plaintiffs at a bargain price. The defendants eventually did succeed in buying out the plaintiffs' shares at a bargain price. That court held that it could not "view the transactions that decreased the value of the corporation as confined to an equal dilution of the economic value of each of the corporation's outstanding shares'" because "those alleged to have benefitted directly from the Defendants' misdeeds are the defendants themselves or entities controlled by them." Id.