- The Court of Chancery of the State of Delaware has denied Tetragon’s request for appeal in the case against Ripple over its stock redemption claim.
- Judge Zurn reiterated that XRP’s status as a security is decided by the U.S. District Court, not the SEC’s filing.
Ripple Labs has scored another victory in its legal battle with Tetragon Financial Group Limited. After the court had ruled on March 05 that Tetragon is not entitled to a stock redemption from Ripple at this point in time, the Court of Chancery of the State of Delaware has now also rejected the appeal.
As CNF reported, the court deemed Tetragon’s claim of a “securities default” to be false, as there is currently no official ruling on the status of XRP. Judge Morgan T. Zurn therefore denied Tetragon’s request for a preliminary injunction, and lifted the previously imposed injunction restricting the sale of XRP.
The UK-based asset management firm owns less than 2% of Ripple’s equity. However, it was the largest contributor to a Series C funding round, raising $175 million, and sued Ripple to buy back its stocks after the SEC lawsuit, saying it “triggered the risk of irreparable harm.”
Tetragon also loses appeal against Ripple
As Law360 reports, the Chancery Court of Delaware has now also denied Tetragon’s request for an appeal to the state Supreme Court. Judge Zurn explained in a 12-page letter ruling that Tetragon failed to show that an appeal of the preliminary injunction “involves more than review of a contract interpretation, a category that the Chancery Court has generally deemed unworthy of interlocutory appeal.”
“Tetragon’s application does not identify any particular aspect of the court’s interpretation that was erroneous, much less a specific error on a substantial issue of material importance, qualifying the decision for state Supreme Court review before the case is decided by summary judgment or trial,” Law360 said, citing the document.
Further, Zurn reiterated her March 05 decision, stating that “Tetragon was not reasonably likely to prevail on the merits because neither the Wells Notice nor the enforcement action constituted a Securities Default pursuant to the plain language of the [Ripple] shareholders’ agreement.” In addition, Zurn elicited that XRP’s status as a security is decided by the U.S. District Court, not the SEC’s filing. Judge Zurn further wrote:
With trial quickly approaching, the costs and inefficiencies associated with disrupting this case’s timeline, particularly when an appeal on a final judgment would be more appropriate for this contractual interpretation dispute, outweigh the potential benefits Tetragon asserts.
Further, Law360 also made public that Ripple moved for summary judgment and dismissal of the case following the denial of the preliminary injunction, “with trial still scheduled for March 25 and 26. The summary judgment motion remained under seal as of Friday.”