Executive Summary
The Delaware Court of Chancery has held, after trial, that a board which rejected a bylaw-compliant activist nomination notice breached its fiduciary duties, and it ordered the dissident slate onto the ballot. For every Delaware board entering the 2027 nomination window, the rule is now explicit: an advance notice bylaw enforces only what it says, and rejection is a defensive measure that must survive enhanced scrutiny. The posture is defensive containment: audit the bylaw text before the window opens.
The Signal at a Glance
PRIORITY 9 | SILO: Judicial
A Delaware board that used its advance notice bylaw to disqualify a full dissident slate on grounds the bylaw never contained has been found in breach of fiduciary duty, with the slate restored for the October 14, 2026 annual meeting.
The Signal
On August 28, 2026, Vice Chancellor Lori W. Will issued a post-trial memorandum opinion in ATG Capital Opportunities Fund LP v. Lane, C.A. No. 2026-0447-LWW. The court found that the board of Empery Digital, Inc. had no contractual basis to reject ATG's notice nominating nine directors, and that rejecting it anyway was an inequitable response to the threat the board perceived.
The opinion opens with the court's own frame: "Advance notice bylaws are commonplace and vital tools for Delaware corporations." The court routinely enforces them. What it will not do is enforce a disclosure requirement the board never wrote into them.
The Evidence
The board cited three deficiencies: ATG failed to identify a coordinating investor as a proxy "participant," failed to disclose a large short position in Bitcoin exchange-traded funds, and omitted biographical detail in nominee questionnaires. The court found that the bylaws incorporated the federal Schedule 14A definition of participant, which the coordinating investor did not meet, and that the bylaws required disclosure of derivative positions in Empery stock, not in Bitcoin products. Its conclusion on the rejection letter as a whole was direct: the contractual violations it asserted did not exist.
The court then applied the enhanced scrutiny framework from Coster v. UIP Companies (Del. 2023) and Kellner v. AIM ImmunoTech. Assuming the board reasonably perceived a threat to the company's Bitcoin treasury strategy, the rejection still failed the second prong. It was disproportionate, because the board could have put its concerns to stockholders through the proxy contest, and preclusive, because removing the slate assured the incumbents an uncontested election.
Two details from the trial record matter for any board. First, the court distinguished Kellner, where a rejection was upheld because the notice concealed arrangements the bylaw actually required. Second, the record included an AI-generated transcript of the March 26 board meeting, in which the rejection letter was described internally as throwing in the kitchen sink and no single omission in the notice was called detrimental. That transcript became evidence against the directors who sat in the room.
The Strategic Implication
Defensive Risk. The exposed parties are the governance committee chair and general counsel at every Delaware company whose advance notice bylaw has not been re-read against this opinion, and each director who votes to reject a notice this cycle. What breaks is the presumption that a rejection is a legal judgment; after Lane it is a Unocal defensive measure, personally attributed to the directors who approved it, and the bylaw's own text sets the ceiling on what may be demanded. The timing is the 2027 nomination window, which for spring annual meeting companies opens in the fourth quarter of 2026, before most boards next review their bylaws. The responsible move is a line-by-line audit of the advance notice bylaw against the disclosure the board would actually want from a dissident (hedging, coordination, financing), amended now, with counsel's written confirmation that any future rejection letter cites only text that exists.
Offensive Advantage. A board that already runs disciplined, minuted nomination reviews has just been handed a durable position. The court invited boards to make their case to the electorate, and rewarded the board that enforces valid disclosure requirements (Kellner) over the board that improvises them (Lane). The move is to treat the proxy contest as the forum, not the threat: document the review, disclose the concern, and let the vote settle it.
This is where the argument crystallizes. Lane is a boundary case. The Governance Boundary Principle names the line between what a board owns and what it does not; the Empery board crossed the line between governing the company and choosing who gets to govern it. The court's language is unambiguous: the right to select directors belongs to stockholders, and an advance notice bylaw does not authorize incumbents to exclude candidates because they disagree with the candidates' business plans. A board that discovers the standard it wants only after a dissident appears never owned that standard. It owned it the day it wrote it into the bylaws, or not at all.
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