Uploaded March 2025 | Updated September 2026, 2 weeks ago
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Manichaean Capital LLC v. Exela Technologies Inc.
Delaware Court of Chancery
251 A.3d 694 (2021)
Although a corporation and its owners are distinct legal entities, courts may, in appropriate circumstances, disregard this separation and pierce the corporate veil. Typically, the corporate veil is pierce to hold a shareholder liable for the corporation's conduct.
However, in Manichaean Capital versus Exela Technologies, a Delaware court considered whether to reverse pierce the corporate veil, and hold a corporation liable for shareholders conduct.
Source HOV Holdings merged into Exela Technologies.
Manichaean Capital, a former Source Holdings shareholder, dissented from the merger, and was ultimately awarded a sizable appraisal award for its shares.
To facilitate the payment of this award, the Delaware Court of Chancery entered a charging order against Source Holdings interests in its subsidiaries.
The order required any funds flowing through Source Holdings or its subsidiaries to first be paid to Manichaean before flowing up to Exela.
After the appraisal award remained unsatisfied, Manichaean filed suit against Exela to collect the remainder. Manichean asserted that in addition to lacking corporate separateness, Exela and its subsidiaries were carrying out a scheme to prevent post merger Source Holdings from paying the appraisal award.
Manichaean asked the court to pierce Source Holdings corporate veil upwards to reach Exela and downwards to reach the subsidiaries, so that Manichaean could enforce the charging order against those entities.
Exela moved to dismiss Manichaean's claims. The Delaware Court of Chancery considered the motion.
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Get more case briefs explained with Quimbee. Quimbee has over 42,700 case briefs (and counting) keyed to 988 casebooks ► quimbee.com/case-briefs-overview
Manichaean Capital LLC v. Exela Technologies Inc.
Delaware Court of Chancery
251 A.3d 694 (2021)
Although a corporation and its owners are distinct legal entities, courts may, in appropriate circumstances, disregard this separation and pierce the corporate veil. Typically, the corporate veil is pierce to hold a shareholder liable for the corporation's conduct.
However, in Manichaean Capital versus Exela Technologies, a Delaware court considered whether to reverse pierce the corporate veil, and hold a corporation liable for shareholders conduct.
Source HOV Holdings merged into Exela Technologies.
Manichaean Capital, a former Source Holdings shareholder, dissented from the merger, and was ultimately awarded a sizable appraisal award for its shares.
To facilitate the payment of this award, the Delaware Court of Chancery entered a charging order against Source Holdings interests in its subsidiaries.
The order required any funds flowing through Source Holdings or its subsidiaries to first be paid to Manichaean before flowing up to Exela.
After the appraisal award remained unsatisfied, Manichaean filed suit against Exela to collect the remainder. Manichean asserted that in addition to lacking corporate separateness, Exela and its subsidiaries were carrying out a scheme to prevent post merger Source Holdings from paying the appraisal award.
Manichaean asked the court to pierce Source Holdings corporate veil upwards to reach Exela and downwards to reach the subsidiaries, so that Manichaean could enforce the charging order against those entities.
Exela moved to dismiss Manichaean's claims. The Delaware Court of Chancery considered the motion.
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![Schrems v. Data Protection Commissioner (Joined by Digital Rights Ireland) [Schrems I] | Law Case](https://i.ytimg.com/vi/U86aLpipVaM/mqdefault.jpg "Schrems v. Data Protection Commissioner (Joined by Digital Rights Ireland) [Schrems I] | Law Case
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Schrems v. Data Protection Commissioner (Joined by Digital Rights Ireland) [Schrems I]
European Court of Justice
Case C-362/14 (2015)
European Union regulations strictly control the transfer of personal data from data controlling entities in Europe to countries outside the EU referred to as third countries.
The regulations require third countries to ensure an adequate level of data protection.
In data protection commissioner versus Facebook Ireland Limited and Maximilian Schrems, the European Court of Justice considered whether the United States met this standard. In two thousand, the US and the EU negotiated an agreement called the Safe Harbor Principles to authorize private companies to transfer personal customer data from Europe to the states.
The European Commission issued a decision called an adequacy decision certifying that Safe Harbor guaranteed an adequate level of data protection for European citizens.
However, safe harbor allowed the American government unlimited access to personal data for national security and other purposes.
In two thousand thirteen, former government contractor Edward Snowden leaked information revealing that American security agencies engaged in extensive warrantless data collection and had direct access to the data held by major companies like Google and Facebook.
Austrian citizen, Maximilian Schrems, had a Facebook account. European Facebook users had to contract with Facebook Ireland, a Facebook subsidiary.
Facebook Ireland sent users personal data to Facebook in the US. Following the Snowden league, Shremes filed a complaint with Irelands data protection commissioner, that countrys data supervisory authority. Schrems asked the authority to prohibit Facebook Ireland from transferring his data to the US because US law didnt adequately protect personal data.
The authority rejected Schrems complaint because of safe harbor.
Schrems appealed to Irelands high court, which requested an opinion on the safe harbor decisions validity from the European Court of Justice.
The European Court invalidated the decision and referred the case back to the authority.
Thereafter, the US and EU negotiated a new agreement called Privacy Shield. The European Commission issued an adequacy decision approving Privacy Shield. Privacy Shield was similar to Safe Harbor, but created an ombudsperson to investigate data privacy complaints from European citizens.
Again, however, Privacy Shield allowed the federal government unlimited access to personal data for national security reasons.
Schrems refiled his complaint. The authority referred the case to Irelands high court, which again referred the case to the European Court of Justice for a preliminary ruling.
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