Section 225 bid fails on fake records

A Delaware Chancery judge threw out a bid for control of Tracki, Inc. after finding the claim rested on fabricated corporate records. (courts.delaware.gov) Vice Chancellor Lori W. Will ruled on March 27, 2026, in *Ami Shafrir Berg v. Shai Bar-Lavi, et al.*, C.A. No. 2025-0959-LWW. Berg had sued under Section 225 of the Delaware General Corporation Law, a fast-track procedure for deciding who lawfully holds a board or officer seat. (courts.delaware.gov) (delcode.delaware.gov) The opinion said Berg claimed to be Tracki’s sole stockholder and director and relied on a purported 2019 written consent to justify removing the defendants. After trial, the court found he was not a stockholder or director and lacked standing to pursue the case. (courts.delaware.gov) Section 225 cases are narrow by design: the court decides who validly occupies corporate office, not every business dispute between the parties. That makes the underlying paper trail unusually important, because voting power, board seats, and written consents all turn on authentic records. (delcode.delaware.gov) (harvard.edu) The court said trial evidence, including expert forensic evidence about the stock ledger, showed the records Berg relied on were fabricated. It also said the case had been litigated in bad faith and shifted fees to the defendants, while cutting their fee request by half because the defendants admitted backdating documents and giving false testimony. (courts.delaware.gov) That split outcome turned the case into a warning about recordkeeping as much as board control. Delaware law lets stockholders remove directors by written consent in some circumstances, but only if the person claiming that power can prove real ownership and valid voting rights. (delcode.delaware.gov) (natlawreview.com) The litigation moved quickly, as Section 225 cases often do. The suit was filed in August 2025, trial was held on December 16 and 17, 2025, and post-trial briefing was completed on February 2, 2026, before the court issued its decision on March 27. (natlawreview.com) (courts.delaware.gov) Tracki was the company at the center of the fight, and the opinion traced the dispute to a long business relationship between Berg and Bar-Lavi that deteriorated as the tracking-device business grew. By the time the case reached Delaware, the court said both sides had treated basic corporate formalities as optional. (courts.delaware.gov) (reedsmith.com) The case ended with neither side getting a clean win. Berg lost his control claim because the records failed, and the defendants lost half their fee request because the court found their own conduct tainted the case too. (courts.delaware.gov)