Civil Maps Asset Sale: Disclosure & Vote Analysis

📖 Case Narrative

On December 13, 2024, Anuj Gupta—holding approximately 7% equity in Solfice Research, Inc. (d/b/a Civil Maps)—filed a verified complaint in Delaware Chancery Court seeking books and records inspection under 8 Del. C. § 220. The complaint targets former directors Stefan Safko (CEO) and Scott Harvey (CTO) following the June 2022 asset sale to Luminar Technologies for $10.595 million.

Core Allegations: Gupta alleges the Board failed to form a special committee despite conflicts of interest, as Safko and Harvey's employment with Luminar was a mandatory closing condition. The complaint asserts the transaction failed to optimize shareholder value, favoring management and preferred shareholders. Material information was allegedly withheld despite multiple requests, including details about a $6 million compensation package to board members and employees discovered through Luminar's SEC filings.

Prior Superior Offers: The complaint references multiple higher-value proposals the company allegedly received: Ford Motor Company's $100M offer (2016-2017), Series A funding at $90M pre-money valuation (2018), TomTom's $50M majority stake offer (2021), and Luminar's own earlier term sheets of $12.5M (December 7, 2021) and $20M (December 9, 2021)—nearly double the final purchase price.

Shareholder Suppression: After requesting disclosure, Gupta received only a verbal offer of $270,000 for his shares, later reduced to $135,000, which he characterizes as discriminatory treatment of common stockholders.

Inspection Demands: The complaint seeks eight categories of documents spanning December 2020 to present, including: (1) communications with all potential acquirers; (2) board evaluation and approval records for the APA; (3) valuation analyses; (4) employment agreement negotiations between Key Employees and Luminar; (5) conflict of interest disclosures; (6) compensation distribution rationales; (7) independent advisors' fairness opinions; and (8) complete transaction documentation including emails from personal accounts if used for board-level communications.

Stated Purposes: Gupta seeks inspection to investigate potential breaches of fiduciary duty, mismanagement, corporate waste, unfair business practices, and improper influence; evaluate director independence; consider derivative litigation or corrective measures; communicate with other stockholders; and assess the accuracy of company disclosures regarding the asset sale.

Procedural Posture: Gupta filed pro se and indicated he does not seek an expedited schedule, stating the filing is to preserve his standing to inspect records with no imminent deadlines requiring accelerated proceedings.

📖 Case Narrative

On August 21, 2025, defendants Stefan Safko and Scott Harvey formally appeared before the Delaware Court of Chancery through their legal counsel, Arman Pahlavan of Perkins Coie LLP. The defendants filed a Motion to Dismiss accompanied by an Entry of Appearance, a proposed form of order, and a Certificate of Service.

Procedural Filing: The motion represents a boilerplate placeholder filing that establishes the defendants' presence in the litigation and preserves their right to challenge the complaint. Notably, the filing does not include a supporting brief or memorandum of law articulating the legal grounds for dismissal, which would typically accompany such a motion in Delaware Chancery practice.

Form Documents: The submission consists primarily of procedural documents: the entry of appearance formally notifying the court of counsel's representation, the motion itself stating the request for dismissal, a proposed order for the court's consideration should it grant the motion, and proof of service on the plaintiff.

Strategic Timing: Filed more than eight months after Gupta's December 2024 complaint, the motion signals the defendants' intent to contest the §220 demand through procedural challenge rather than immediate substantive response. The absence of a supporting brief suggests either that a separate brief may be filed subsequently, or that defendants may be exploring alternative resolution paths while preserving their dismissal option.

Plaintiff filed a notarized affidavit documenting service of process on both defendants. Scott Harvey was successfully served via USPS certified mail (07/05/25 and 07/19/25), with receipt confirmed on 07/21/25. Stefan Safko, however, engaged in a pattern of evasive behavior to avoid service. Initial certified mail attempts went unpicked-up despite being available. On 07/28/25, process server Davion Stovall personally approached Safko, who refused to accept the documents. After additional investigation by process server Kristina Vardanyan—including interviewing neighbors and verifying contradictory unit information—Safko was finally served on 08/02/25 when confronted with property records identifying him as the owner and beneficial owner of Sacardus Properties, LLC. The affidavit characterizes Safko's conduct as "willful evasion and misrepresentation until confronted with irrefutable evidence." Fifteen exhibits (A-O) support the service documentation, including USPS receipts, process server affidavits, property records, invoices, and a comprehensive evidence chain showing the sequence of events.

Overview: This notarized affidavit from Shanmukha Sravan Puttagunta, Solfice's founding CEO and largest stockholder, provides critical evidence supporting plaintiff Gupta's claims of fiduciary misconduct. Sravan attests to creating the company's foundational value, then experiencing systematic exclusion and attempted disenfranchisement after transitioning leadership to defendants Safko and Harvey.

Foundation and Value Creation: As Solfice's founder, Sravan incorporated the Delaware company, served as original CEO, and is the principal inventor on the core patent portfolio (Exhibit A). He contributed 18 months of uncompensated labor developing foundational IP, technical architecture, and product roadmap—work that enabled Solfice to achieve a peak valuation exceeding $100 million (Exhibit C). He remains the single largest stockholder across all stock classes (Exhibit B).

Pattern of Misconduct: After appointing Stefan Safko as successor CEO and Scott Harvey as CTO, management sought to procure from Sravan: (1) a power of attorney transferring his voting rights and authorizing $500,000 in discretionary distributions (Exhibit D), and (2) release waivers extinguishing his ability to bring fiduciary claims (Exhibit E). When Sravan refused to sign these documents, he was systematically excluded from material information about the company's finances, governance, and strategic transactions.

Undisclosed Side Arrangements: In connection with the Luminar asset sale, Safko and other insiders received undisclosed compensation, inducements, or side arrangements. The $500K proxy proposal demonstrates that inducements were actively offered to management and select stakeholders. Sravan's affidavit establishes it is "highly probable" that similar inducements were extended to controlling stockholder Fabien Chraim, whose vote was decisive in approving the asset sale. Under Safko's leadership, company valuation collapsed from $100M to $10M with no stockholder communications or transparency.

Legal Significance: This affidavit establishes proper purpose for books and records inspection under 8 Del. C. § 220 to investigate whether the Luminar transaction was tainted by undisclosed self-dealing or coercion, and whether fiduciaries discharged their duties of loyalty, candor, and fairness to all stockholders. The testimony demonstrates why transparency into side arrangements and insider compensation is essential to determine if the transaction was conducted fairly.

Strategic Posture: This 58-page combined opposition brief dismantles defendants' procedurally defective motion to dismiss while simultaneously advancing plaintiff's affirmative request for books and records inspection. The brief demonstrates that defendants' motion violated Delaware Rules by failing to include required opposing affidavits, improperly seeking discovery through motion practice, and ignoring the court's actual denial of their prior demand letter dismissal attempt.

Core Evidentiary Pillars: The brief marshals six converging factual foundations establishing credible basis for wrongdoing: (1) the $500,000 inducement offer to Sravan (declined) coupled with the demand for proxy vote and liability waiver—proving defendants knew something was wrong with the deal structure; (2) Fabien Chraim's tainted controlling vote, where he switched from "not fair" to approval after becoming a Luminar employee, with employment contingent on transaction approval; (3) employment-contingent closing conditions in APA Section 7.2(e) requiring Harvey/Safko employment before deal could close—making their compensation a condition precedent, not optional awards; (4) board minutes completely silent on the ~$700K in compensation despite being the single largest use of sale proceeds; (5) use of a Gmail channel (civilmapsprocess@gmail.com) for official corporate notices, suggesting an effort to route communications outside normal corporate channels; and (6) the 10-Q discrepancy where Luminar disclosed ~$700K total employee compensation while the India team alone received six figures—indicating Stewart/Safko compensation was deliberately concealed from stockholders.

Procedural Arguments Defeating Motion to Dismiss: The brief establishes four independent grounds why the motion must be denied: (1) defendants filed a motion to dismiss when no complaint exists—only plaintiff's affirmative petition for inspection; (2) defendants violated Civil Rule 7(b)(1) by failing to include required opposing affidavits, making the motion facially deficient; (3) defendants are improperly attempting to conduct discovery through motion practice rather than following the Section 220 summary proceeding framework; and (4) the Court already denied defendants' attempt to dismiss via demand letter on August 22, 2025, and defendants are now attempting an end-run around that ruling.

Section 220 Legal Framework: The brief anchors its analysis in three controlling Delaware precedents: AmerisourceBergen Corp. v. Lebanon County Employees' Retirement Fund (establishing the "credible basis" standard and "lowest possible burden of proof"); KT4 Partners LLC v. Palantir Technologies Inc. (authorizing inspection of personal email accounts when used for corporate business); and Wal-Mart Stores, Inc. v. Indiana Electrical Workers Pension Trust Fund (granting inspection where compensation gaps suggested potential self-dealing). The brief demonstrates that plaintiff's showing exceeds the credible basis threshold on all elements: proper purpose (investigating wrongdoing/mismanagement), essential and sufficient scope, and necessary and essential timeframe.

Requested Inspection Scope (Three-Stage "Inside-Out" Protocol): The brief proposes a tailored, staged inspection beginning with: (1) Inner Circle—Stefan Safko, Scott Stewart, and their controlled entities' communications, compensation records, and transaction documents; (2) Middle Ring—Fabien Chraim's communications and compensation (as the tainted controlling voter); and (3) Outer Ring—if Stage 1-2 reveal the Gmail channel was a routing mechanism, inspection of civilmapsprocess@gmail.com and related accounts. This protocol directly mirrors the KT4 Partners v. Palantir framework and ensures plaintiff receives the "tools at hand" needed to evaluate claims while respecting privacy and proportionality concerns.

Equity and Fee Shifting: The brief requests equitable relief if the Court determines plaintiff's formal verification was technically deficient—noting that substance should prevail over form, especially given defendants' own procedural violations. Additionally, the brief seeks fee shifting under Delaware's bad faith exception, arguing that defendants' filing of a facially deficient motion to dismiss (lacking required affidavits, ignoring prior Court ruling, seeking improper discovery) constitutes bad faith litigation conduct warranting cost allocation.

Controlling Vote Taint Theory: A central thread throughout the brief is the controlling vote taint analysis showing how Fabien Chraim's vote was rendered unreliable by his conflict of interest. Exhibit F demonstrates that when Chraim's tainted vote is removed, the transaction failed to receive majority-of-the-minority approval from disinterested stockholders. This implicates the entire fairness doctrine and shifts the burden to defendants to prove the transaction's fairness—a showing that requires full inspection of the compensation arrangements that were concealed from stockholders.

Strategic Significance: This opposition brief serves dual purposes: it defeats defendants' improper dismissal attempt while simultaneously building the substantive case for inspection. By demonstrating six converging evidentiary pillars and three controlling precedents, the brief establishes that plaintiff has cleared the "lowest possible burden" for Section 220 relief. The proposed three-stage inspection protocol provides the Court with a roadmap for proportional, tailored discovery that addresses privacy concerns while ensuring plaintiff receives the documents necessary to evaluate potential claims. The brief's emphasis on defendants' procedural violations and bad faith litigation tactics strengthens the request for fee shifting and positions plaintiff favorably for the summary proceeding.

📖 Case Narrative

On September 11, 2025, the parties submitted a Joint Status Report following their court-ordered meet and confer process. Delaware Chancery Court typically requires parties to meet and confer before oral argument on motions to discuss potential resolution, narrow issues, or at minimum establish the scope of their disagreements.

Defendants' Procedural Posture: Rather than engaging substantively with the §220 inspection demand on its merits, defendants maintained their purely procedural defense strategy. The joint status report reflects defendants' refusal to address the underlying questions at the heart of Gupta's complaint: whether the asset sale process was conducted fairly, whether conflicts of interest were properly disclosed, and whether the transaction maximized value for common stockholders.

Evasion of Substantive Issues: By limiting their response to technical procedural objections rather than producing any documents or addressing the propriety of the challenged conduct, defendants effectively deployed delay tactics characteristic of parties seeking to avoid transparency. Section 220 of Delaware law is designed as a narrow, summary proceeding specifically to prevent such obfuscation—stockholders need not prove wrongdoing to inspect books and records, only demonstrate a proper purpose.

Impact on Resolution: The defendants' approach during meet and confer made clear that no consensual resolution would be forthcoming. No partial document production was offered, no narrowing of the inspection scope was proposed, and no substantive explanations were provided for the transaction's structure or the alleged superior offers that were declined. This forced the case to proceed to full briefing and potential oral argument on what should have been a straightforward inspection request.

Tactical Observation: The procedural defense strategy—while legally permissible—raises questions about what the requested documents might reveal. Delaware courts have long recognized that resistance to §220 demands, particularly through technical objections rather than substantive engagement, can itself suggest the presence of information that fiduciaries prefer to keep from stockholder scrutiny.

The Resignation Defense and Four Independent Grounds for Rejection: This 67-page opposition brief systematically dismantles defendants' central argument that their 2022 resignations shield them from custodial duties under §§ 220 and 278. Plaintiff advances four independent reasons why this defense fails: (1) resignation does not absolve fiduciaries of custodial obligations for transactions they orchestrated while in office—Delaware law makes clear that fiduciary duties of loyalty and disclosure apply when directors negotiate and approve conflicted transactions, and custodianship over transaction records continues beyond resignation when those materials were created or controlled during directorship; (2) the Asset Purchase Agreement itself confirms that inducement and release agreements were embedded as closing conditions (not after-the-fact arrangements), making them express closing deliverables that defendants negotiated, approved, and made conditions precedent to the transaction while still serving as fiduciaries; (3) defendants retain custodianship over drafts, negotiation materials, and electronic communications that evidenced their role in structuring these closing conditions—resignation cannot erase possession, custody, or control over materials they created, received, or transmitted in their fiduciary capacities; and (4) the credible basis standard for inspection is minimal, and plaintiff has demonstrated clear evidence of conflicted arrangements requiring investigation through employment offers and seller-side releases embedded as closing deliverables, silence in board minutes regarding these substantial arrangements, and structured channeling of inducements through the buyer rather than transparent corporate processes.

The Counterparty Signatures Argument: A novel and compelling section of the brief establishes that the APA's closing conditions necessarily produced dual-signed agreements requiring both employee/fiduciary signatures (including Safko and Harvey as Key Employees) and counterparty signatures by Luminar or its acquisition vehicle. By approving the APA, defendants agreed that these fully executed agreements were conditions precedent to closing—they could not close without signing and without receiving counterparts signed by the buyer. This reality establishes that defendants had final, executed copies in their possession or control. Under Delaware contract law, a closing condition requiring executed documents necessarily contemplates delivery of dual-signed counterparts to the parties. The brief argues it is not credible for defendants to suggest they signed inducement agreements yet never received the buyer's signed copies, and that if defendants claim the buyer retained exclusive custody, equity compels inspection because a fiduciary cannot defeat § 220 by outsourcing closing deliverables to a counterparty and then disclaiming custody.

Comprehensive Rebuttals to Defense Arguments: The brief systematically addresses every anticipated defense argument with targeted rebuttals. On timing and laches: the September 2022 demand tolled the statute of limitations (proper § 220 demand suspends limitations while stockholder pursues inspection), the December 2024 complaint was filed within the three-year statutory window under § 278, and preservation letters were sent to ensure no loss of material evidence—defendants' refusal to respond (when § 220 requires response within five business days) explains any delay, not plaintiff's lack of diligence. On the complaint being "short on facts": § 220 exists precisely to let stockholders obtain facts before pleading merits claims; when fiduciaries refuse to cooperate with a proper demand, the record will look "thin" by definition—Delaware law does not require proving a merits case or litigating end-use to secure inspection. On service issues: the delay in formal service was due to defendants' calculated evasion (affidavit documents multiple certified mailings Safko refused to collect and in-person attempts where he physically declined papers), while Harvey received service by certified mail with electronic return receipt on July 21, 2025. On stockholder status: the "CANCELED" legend on plaintiff's digital certificate is an administrative flag applied by cap-table vendors upon dissolution, not a legal adjudication—unlike merger, dissolution does not extinguish stockholders, as § 278 expressly continues the corporation to "distribute to its stockholders any remaining assets."

Personal Jurisdiction and the § 3114 Framework: The brief establishes that jurisdiction lies under 10 Del. C. § 3114 because this § 220 case is, in substance, "by or on behalf of" a Delaware corporation that survives dissolution under § 278, and the former directors are proper parties to effectuate inspection as custodial fiduciaries. Delaware's Supreme Court in Hazout v. Tsang Mun Ting read § 3114 broadly: nonresident directors consent to Delaware jurisdiction in any civil action where the corporation is a party and the director is a "necessary or proper party," and also for actions alleging violations of duties in that capacity—regardless of continued service at filing. Where a dissolved company's records are in former directors' custody, they are proper participants for relief. Chancery routinely treats directors' materials (including personal accounts) as within the company's control for § 220 and orders production accordingly. At minimum, any caption defect is curable under Rule 21, and the Court may appoint trustees or receivers under § 279 to take charge of the dissolved corporation's records.

Two-Stage "Inside-Out" Inspection Protocol: The brief proposes a tailored, staged inspection mirroring the KT4 Partners v. Palantir framework. Stage 1 (Day 14): board minutes/consents, closing deliverables, and fully-executed compensation/release papers in defendants' possession, plus a sworn repository map identifying mailboxes, chat systems, cloud drives, closing rooms, and local devices searched. Stage 2 (Day 21, if triggered): documented requests to counterparties (buyer/affiliates/agents) and production of any received materials, plus a declaration describing responses. The protocol addresses burden concerns by imposing custodian caps, date bounds, and focused search terms, with Stage 2 triggering only upon specific gaps. Where formal board materials omit documentation of material transaction terms, informal communications become necessary and essential to understand what fiduciaries actually negotiated and approved—companies cannot use their choice of medium to keep shareholders in the dark.

Electronic Communications as Necessary and Essential: Given board minutes' silence regarding substantial closing conditions embedded in the APA, electronic communications become necessary and essential under KT4 Partners. The production scope should include: (1) draft offer letters, CIIAAs/restrictive covenants, and release agreements (all versions including markups and revisions); (2) email exchanges with the buyer regarding employment terms and closing conditions; (3) internal communications about structuring personal benefits through the transaction; and (4) communications regarding disclosure obligations and board presentation strategies. Defendants' refusal to produce these materials—or to identify their current location if held by third parties—is precisely why § 220 exists. Their historical possession and control of negotiation materials establishes custodianship regardless of subsequent resignation or dissolution. ESI and third-party communications remain within custodial scope when they address the "crux of the shareholder's purpose."

Tolling, Fee Shifting, and Equitable Relief: The brief requests that statute of limitations for related fiduciary-duty claims be tolled from the September 2022 demand through substantial completion of inspection, as proper § 220 demand suspends limitations to allow stockholders to evaluate and prepare claims. Additionally, plaintiff seeks fee shifting under Delaware's bad faith exception, arguing that defendants' filing of facially deficient motions (lacking required affidavits, ignoring prior Court ruling, seeking improper discovery through motion practice), deliberate evasion of service, and stonewalling of statutorily required five-day responses constitutes bad faith litigation conduct warranting cost allocation. If the Court determines plaintiff's formal verification was technically deficient, the brief requests equitable relief noting that substance should prevail over form, especially given defendants' own procedural violations.

Pattern of Defense Gamesmanship: The brief documents seven forms of problematic defense conduct: (1) procedural gamesmanship to avoid merits through threshold skirmishes on jurisdiction, caption formalities, and service despite actual notice; (2) misuse of dissolution formalities (cap-table "CANCELED" overlay and dissolved status) as if they extinguish stockholder status or custodial obligations; (3) jurisdiction objections that ignore defendants' own Delaware-directed conduct creating the records sought; (4) service objections contradicted by signed electronic return receipts; (5) inconsistent positions in meet-and-confer (signaling cooperation then retreating to threshold defenses); (6) withholding basic custodial certifications (if reasonable searches occurred, a two-paragraph declaration would resolve disputes); and (7) prejudice to a time-sensitive statutory right (§ 220 is summary by design; every month of procedural fencing erodes remedy utility and risks loss of ephemeral ESI).

Strategic Significance and Requested Relief: This opposition brief serves as both a defensive response to defendants' dismissal motion and an affirmative roadmap for expedited inspection. The brief requests: (1) denial of all threshold motions (12(b)(2) lack of personal jurisdiction, 12(b)(5) insufficient service, and standing challenge); (2) adoption of the staged production protocol with 14/21-day deadlines; (3) custodial declarations identifying searched locations, custodians, date ranges, and contacted counterparties; (4) preservation directive for all deal-related ESI; (5) Rule 21 caption cure if needed, without dismissal; (6) § 278 survival acknowledgment and § 279 fallback (trustee/receiver appointment for records custody); and (7) fee-shifting warning or conditional fee-shift if defendants fail to comply. By demonstrating that resignation cannot erase custodianship, that counterparty signatures establish possession, and that the credible basis standard is easily satisfied by documentary evidence of undisclosed closing conditions, the brief positions plaintiff to overcome procedural obstacles and reach the substantive inspection dispute. The emphasis on defendants' pattern of evasion and bad faith strengthens both the merits and the fee-shifting request.

Procedural Formalism and Rule 11 Sanctions: This 17-page reply brief doubles down on defendants' core procedural argument while launching an aggressive attack on plaintiff's litigation conduct. Defendants argue that plaintiff's characterization of Section 220's requirements as mere "formalism" contradicts Chancellor Allen's principle that "the entire field of corporation law has largely to do with formality" (Uni-Marts, Inc. v. Stein). The brief devotes substantial attention to requesting Rule 11 sanctions, alleging that plaintiff's answering brief was "drafted almost entirely by AI" (GPTZero detected 399 of 412 sentences as "likely AI generated"; copyleaks.com found "100%" AI content). Defendants contend this undisclosed AI usage violates Court of Chancery Rule 11's certification requirements and cite recent cases addressing AI in pro se filings (Kiefer v. UKSP, LLC; Willis v. U.S. Bank N.A.). They request that the Court strike plaintiff's filings, dismiss the action, and award attorneys' fees.

Defendants as Improper Parties to Section 220 Actions: The brief reiterates that Section 220(c) provides remedies only against corporations, not individuals—even former officers or directors. Defendants warn that allowing individuals as Section 220 defendants would fundamentally alter Delaware practice: "If the Court allows Plaintiff to name a Company's former directors as defendants in this Section 220 action, it is likely that most, if not every, Section 220 complaint in the future will name corporate directors and officers as defendants, complicating and delaying resolution of Section 220 claims." They note that pro se litigants "must abide by the same rules that apply to all other litigants" and that "Delaware courts require strict adherence to the section 220 inspection demand procedural requirements" (Central Laborers Pension Fund v. News Corp.).

Disregarding Plaintiff's Merits Arguments: The brief contends that most of plaintiff's answering brief addresses substantive grievances against Solfice rather than responding to the motion to dismiss. Defendants characterize these arguments—particularly the extensive treatment of the "resignation defense"—as anticipating arguments defendants "have not made because they are irrelevant to this Motion to Dismiss (or which they might not make at all)." The brief includes a lengthy footnote cataloging what defendants characterize as misquotations and inapposite citations in plaintiff's brief, including claims that plaintiff cites cases for propositions they don't contain (e.g., Malone v. Brincat cited for "custodial obligations" when it addresses no such topic).

Section 279 Trustee/Receiver Arguments: Defendants reject plaintiff's suggestion that the Court appoint a Section 279 trustee or receiver for dissolved Solfice. They note that Solfice is not a party to this action, making such appointment impossible at this procedural posture. Moreover, Section 279 only authorizes appointment of "1 or more of the directors of the corporation to be trustees"—not former directors. As to receivers, defendants invoke the standard that receiver appointment is "an extraordinary, a drastic and... an 'heroic' remedy" exercised "with great caution and only as exigencies of the case appear by proper proof" (Ross Hldg. & Mgmt. Co. v. Advance Realty Grp., LLC). They argue no such exigencies exist here.

Personal Jurisdiction Challenges: The brief disputes plaintiff's argument that the Court may exercise personal jurisdiction because this is "in substance" an action by or on behalf of the corporation. Defendants counter that "the substance of Section 220 permits only an action against the corporation, not its former officers or directors," and that plaintiff has not alleged facts showing sufficient Delaware contacts for long-arm jurisdiction under 10 Del. C. § 3104. They reiterate their opening brief argument that "the acts or omissions of one serving as a director of a corporation cannot be said to occur within this state merely because the corporation is domiciled here" (In re USA Cafes, L.P. Litig.).

Stock Ownership Challenge: The brief emphasizes that the stock certificate attached to plaintiff's answering brief is "prominently marked 'CANCELED.'" Plaintiff's explanation—that this "is an administrative flag applied by cap-table vendors upon dissolution or system offboarding"—references "Carta guidance" without citation. Defendants argue that under Section 220(c)(1), plaintiff bears the burden to "establish by a preponderance of the evidence" his stockholder status, and that "[a]bsent such procedural compliance, the stockholder has not properly invoked the statutory right to seek inspection, and consequently, the corporation has no obligation to respond" (Central Laborers Pension Fund). They note plaintiff's September 28, 2022 demand letter included no proof of stock ownership, rendering the Company's non-response justified.

Laches and Statute of Limitations: The brief argues plaintiff's claims are time-barred under the doctrine of laches and the analogous three-year statute of limitations. The Asset Purchase Agreement closed June 15, 2022; plaintiff sent a defective demand letter in September 2022 (lacking proof of stockholder status), then "slept on his rights" for over two years before filing in December 2024. Defendants contend the demand letter was "ineffective and did not toll the running of the statute of limitations" due to its procedural defects. They argue defendants are "exposed to prejudice as a matter of law" after the limitations period has run, noting that under the APA, "the buyer acquired all of Solfice's books and records, its computers, and all of its information technology systems." The brief further argues that plaintiff's six-month delay between filing (December 2024) and attempting service (July 2025) constitutes "unreasonable delay in the service of process," meaning "the statute will continue to run, despite the filing."

Service of Process Challenge: The brief includes an affidavit from Harvey stating he did not sign the certified mail receipt plaintiff submitted as proof of service—Harvey "was not even in the United States at the time." Defendants argue that service by mail under 10 Del. C. § 3104(d)(3) requires "a receipt signed by the addressee" under § 3104(e), and that long-arm jurisdiction is prerequisite for mail service. They request dismissal against Harvey under Court of Chancery Rule 12(b)(5) for insufficient service of process, noting plaintiff did not attempt service on the Company's registered agent or the Delaware Secretary of State under 10 Del. C. § 3114.

Strategic Posture and Requested Relief: This reply brief reflects an aggressive defensive strategy seeking outright dismissal on multiple independent grounds while simultaneously attacking plaintiff's litigation conduct through the Rule 11 sanctions request. The brief frames the case as threatening to fundamentally alter Section 220 practice if individuals can be named as defendants. Defendants request that the Court: (1) grant the motion to dismiss or drop defendants as parties; (2) impose Rule 11 sanctions; (3) strike plaintiff's AI-generated filings; and (4) award attorneys' fees and expenses. The brief was filed less than 24 hours after plaintiff's 67-page answering brief, underscoring the expedited nature of Section 220 proceedings and defendants' emphasis on procedural defects over substantive engagement with plaintiff's books and records arguments.

📖 Case Narrative

On September 20, 2025, Shanmukha Sravan Puttagunta—co-founder, former CEO (2013-2019), and largest stockholder of Solfice Research—filed a notarized affidavit providing crucial mathematical and procedural evidence supporting plaintiff's opposition to the motion to dismiss. The affidavit systematically dismantles the validity of the stockholder approval that purportedly authorized the asset sale.

The Vote Math Problem: Puttagunta establishes that Solfice had 13,761,613 outstanding shares as of the record date, requiring 7,018,423 votes (50%+1) for valid § 271 approval. The recorded tally of 54.02% appears to clear this threshold—but only barely, and only if certain problematic votes are counted. Critically, Puttagunta and Gupta together held over 35.77% of outstanding shares, yet neither was ever presented with the stockholder consent before execution. They only learned of the vote after the company had already certified § 271 compliance, violating Delaware's requirement under § 228(e) for "prompt notice" to non-consenting stockholders.

Corwin Cleansing Failure: The affidavit's most damaging revelation concerns vote taint. The 54.02% tally depended heavily on votes from Fabien Chraim (16.42%) and Scott Harvey (4.80%), whose employment and compensation agreements with Luminar were express closing deliverables in the Asset Purchase Agreement—yet none of these arrangements were disclosed to stockholders prior to the vote. Under Delaware's Corwin doctrine, votes cast by stockholders with undisclosed material conflicts cannot be counted toward an informed majority. Removing even Harvey's conflicted 4.80% alone drops the tally to 49.22%—short of the § 271 majority. If both Harvey and Chraim's votes are excluded for Corwin cleansing failure, the transaction lacks statutory approval entirely.

Procedural Violations: More than 39.06% of outstanding shares were kept uninformed and excluded from the consent solicitation. This constitutes both a § 228(e) notice violation and a failure of the full disclosure required for valid stockholder action under Delaware law.

Post-Closing Document Suppression: Following the transaction, the Voting Rights Agreement terminated by its terms (asset sale constituting liquidation), allowing Puttagunta and Gupta to temporarily appoint themselves as directors. Acting in that capacity, they formally requested the closing documents. Company counsel "begrudgingly provided only a portion"—including the Asset Purchase Agreement and executed consents, but critically, the documents were "scrubbed of inducement and employment information." The very agreements that were closing deliverables and would prove the conflicts were withheld. When full disclosure was not forthcoming, Puttagunta and Gupta resigned from the board.

Gupta's Stockholder Status: Addressing defendants' procedural defense that Gupta lacks standing, Puttagunta certifies under oath that: (1) Gupta was indisputably a stockholder at the Series A closing; (2) the cap table structure did not change between Series A and the asset sale; (3) there was no stockholder consent to recapitalize; and (4) therefore Gupta necessarily remained a stockholder at the time of sale. Puttagunta characterizes the defendants' contrary assertion as "perplexing" and harmful to their credibility, noting both defendants personally know Gupta was a stockholder since his signature appears on the Series A voting agreement.

Pattern of Concealment: The affidavit paints a picture of systematic obstruction: refusal to circulate consents to the largest common stockholders before execution, scrubbing of employment terms from produced documents, and continued assertions by defendants that they "lack possession" of documents they personally executed. Puttagunta states his belief that defendants "are engaged in procedural stonewalling designed to delay or prevent stockholders from obtaining necessary records" and "do not want this Court's impartial observation to review the vote math, the closing deliverables, or the inducements embedded in the transaction."

Supporting Exhibits: The affidavit is accompanied by five exhibits providing documentary proof: the cap table showing ownership percentages, the stockholder consent forms, voter tally calculations with and without Corwin cleansing, the voting agreement proving Gupta's stockholder status, and correspondence documenting the temporary board assignment and subsequent document requests that were only partially satisfied.

Legal Significance: This affidavit transforms Gupta's § 220 complaint from a mere inspection demand into evidence of potentially invalid corporate action. If Puttagunta's mathematics are correct—and they appear to be based on the defendants' own cap table—the company may have sold substantially all its assets without the statutorily required majority, rendering the transaction's § 271 certification false. The affidavit makes clear why books and records inspection is not just proper but essential: to establish through discovery what this preliminary evidence strongly suggests.

📖 Case Narrative

On September 22, 2025, Anuj Gupta filed a notarized affidavit directly rebutting defendants' procedural challenge to his stockholder standing. The affidavit establishes unequivocally that Gupta held 1,191,666 shares of common stock (8.66% of the Company's outstanding equity) continuously from the time of his investment through the asset sale and beyond—yet was never solicited for stockholder consent prior to the sale and received no notice afterward, in direct violation of 8 Del. C. § 228(e)'s prompt notice requirement.

Board Certification of Standing: The affidavit's most compelling evidence comes from Gupta's temporary board appointment in July 2022. Concerned about the lack of transparency surrounding the asset sale, Gupta requested access to the closing deliverables. Notably, defendants' own legal counsel—Sruti Dandamudi of Stoll Berne (the same attorney now defending Safko and Harvey in this litigation)—certified Gupta as a stockholder and temporarily assigned him to the board to conduct his inspection. This certification by defendants' counsel validates Gupta's stockholder status as of July 2022, directly contradicting their current standing challenge (Exhibit B).

Selective Document Production: During his board inspection, company counsel provided closing documents but systematically omitted the employment and inducement agreements that had been negotiated as closing deliverables—the same problematic arrangements later revealed in Sravan Puttagunta's affidavit. When Gupta's follow-up inquiries about these agreements were not answered, he resigned from the temporary board appointment. This pattern of selective disclosure mirrors the broader document suppression identified throughout the case: defendants provide formal records while withholding the compensation arrangements and inducements that would reveal conflicts of interest and vote taint.

Notice Violation: Gupta's affidavit confirms that as an 8.66% stockholder holding over 1.1 million shares, he was never solicited for his consent prior to the asset sale in January 2022. The Company's failure to provide prompt notice under § 228(e) left Gupta—along with 39.06% of stockholders per Puttagunta's calculations—uninformed of a corporate action that sold substantially all of the Company's assets. This notice failure undermines any Corwin cleansing defense, as informed stockholder approval requires that all stockholders be promptly notified of the action taken.

Legal Significance: The affidavit disposes of defendants' standing challenge as a threshold matter. Gupta's stockholder status is established through: (1) contemporaneous board certification by defendants' own counsel; (2) stock ownership records; and (3) Carta platform documentation (Exhibit A). Rather than addressing the substantive merits of the § 220 inspection demand—namely, whether Gupta has demonstrated a proper purpose to investigate potential wrongdoing in connection with the asset sale—defendants continue to pursue procedural defenses that are refuted by their own records and actions.

Time Elapsed Since Last Filing: As of today (November 9, 2025), 48 days have passed since Anuj Gupta's affidavit establishing stockholder status was filed on September 22, 2025.

Breakdown: 6 weeks and 6 days

Current Status: The motion to dismiss has been fully briefed with all supporting affidavits and exhibits filed. The case is now pending before Senior Magistrate Molina (SEM) for a ruling on defendants' motion to dismiss. The Court must decide whether:

• Individual former directors can be proper parties to a Section 220 action
• The Court has personal jurisdiction over defendants
• Plaintiff has adequately established stockholder standing
• The claims are barred by laches or statute of limitations
• Rule 11 sanctions should be imposed for alleged AI-generated briefing
• Service of process on defendant Harvey was sufficient
• Plaintiff's Section 220 demand should be granted for inspection of books and records

Expedited Nature: Section 220 proceedings are summary in nature and designed for expedited resolution. Delaware Chancery Court typically decides these matters within 60-90 days of final briefing. The approaching 7-week mark suggests a decision may be forthcoming.