White Marble v. Chen

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

WHITE MARBLE LLC, a limited )
liability company organized in )
Delaware and beneficially owned by )
Dr. Xiaodi Hou, and WHITE )
MARBLE INTERNATIONAL )
LIMITED, a company incorporated )
in Samoa and beneficially owned by )
Dr. Xiaodi Hou, )
)
Plaintiffs, )
)
v. ) C.A. No. 2024-1208-PAF
)
MO CHEN, )
)
Defendant. )

POST-TRIAL MEMORANDUM OPINION

Date Submitted: July 22, 2025
Date Decided: October 31, 2025

Joseph L. Christensen, Anne M. Steadman, CHRISTENSEN LAW LLC,
Wilmington, Delaware; Ashley R. Altschuler, Harrison S. Carpenter, Ryan D.
Konstanzer, Alexander T. Dickinson, MCDERMOTT WILL & EMERY LLP,
Wilmington, Delaware; David Azar, MILBERG COLEMAN BRYSON PHILLIPS
GROSSMAN, LLC, Los Angeles, California; Richard Liu, INNOVATIVE
LEGAL SERVICES, P.C.; Attorneys for Plaintiffs White Marble LLC and White
Marble International Limited

Thomas P. Will, Elise Wolpert, MORRIS, NICHOLS, ARSHT & TUNNELL LLP,
Wilmington, Delaware; Jon M. Talotta, Sean M. MacDonald, Erica Shuler,
HOGAN LOVELLS US LLP, Tysons, Virginia; Matthew Sullivan, Shannon
Zhang, HOGAN LOVELLS US LLP, New York, New York; Attorneys for
Defendant Mo Chen

FIORAVANTI, Vice Chancellor
Two co-founders of a Delaware corporation collectively held a majority of the

corporation’s voting power. They later executed an irrevocable proxy and power of

attorney and, at the same time, entered into a separate voting agreement. The proxy

gave one co-founder the right to vote the other’s shares for two years. By contrast,

the voting agreement gives the same co-founder the right to direct the vote of the

other’s shares and specifies that it terminates only upon the parties’ mutual

agreement.

This post-trial decision resolves a dispute over the validity and duration of the

voting agreement. The co-founder who surrendered his voting rights contends that,

like the proxy agreement, the voting agreement terminates after two years.

Alternatively, he seeks reformation for mistake or a declaration that the voting

agreement is unenforceable due to lack of consideration, fraudulent inducement, and

ethical violations by the other co-founder’s counsel. The other co-founder concedes

that the proxy agreement expired after two years but maintains that the voting

agreement is effective until both parties agree to terminate it.

The court concludes that the parties entered into a valid voting agreement

supported by consideration, that they manifested mutual assent to that agreement,

and that there was neither mutual nor unilateral mistake. The court also concludes

that there was no fraudulent inducement and that any alleged violations of the rules

of professional conduct have no bearing on the validity or enforceability of the
agreement. The court further concludes that the voting agreement’s unambiguous

termination provision requires mutual agreement of the parties. Therefore, judgment

will be entered in favor of the defendant.

I. BACKGROUND
These are the facts as the court finds them after trial.1

1
Other factual findings are contained in the analysis of the claims. Deposition testimony
is cited as “(Surname) Dep.”; trial exhibits are cited as “JX”; stipulated facts in the pre-
trial order are cited as “PTO”; and references to the docket are cited as “Dkt.,” with each
followed by docket number and the relevant section, page, paragraph, or exhibit. Citations
to testimony presented at trial are in the form “Tr. # (X),” with “X” representing the name
or surname of the speaker. Citations to the transcript of post-trial oral argument, Dkt. 196,
are in the form of “Post-Trial Arg.” After being identified initially, individuals are
referenced herein by their names or surnames without regard to honorifics. No disrespect
is intended. First names are used herein for clarity and without intending disrespect or
familiarity. Unless otherwise indicated, citations to the parties’ briefs are to post-trial
briefs. When resolving factual disputes, this decision generally gives more weight to
contemporaneous evidence. See Lynch v. Gonzalez, 2020 WL 4381604, at *5 (Del. Ch.
July 31, 2020) (“[T]he relative weight given to any particular piece of evidence, and
particularly witness testimony, is a matter for the court to determine as the trier of fact.”
(citation modified)), aff’d, 253 A.3d 556 (Del. 2021) (TABLE); see, e.g., BCIM Strategic
Value Master Fund, LP v. HFF, Inc., 2022 WL 304840, at *2 (Del. Ch. Feb. 2, 2022) (“The
witness testimony often conflicted with the contemporaneous record. In resolving factual
disputes, this decision generally has given greater weight to the contemporaneous
documents.”). Dates and times are indicated in Pacific Time (UTC-7/UTC-8) for
consistency, even where events occurred in the People’s Republic of China. The Joint List
of Exhibits records the timestamp of the first message in a text thread; subsequent messages
may have been sent later. The court identified inaccuracies in certain exhibits’ timestamps
and corrected them using other contemporaneous exhibits in the record. Moreover, several
of the exhibits are in Chinese. The parties supplied notarized English translations, yet
disputes about their accuracy remain. This opinion resolves any divergences through
context and close textual analysis of the documents that bear on the disputed language, read
against the full record. When necessary to reflect the parties’ disagreement, this opinion
presents both versions.

2
A. The Parties

CreateAI Holdings Inc., formerly known as TuSimple Holdings Inc.

(“TuSimple” or the “Company”), is a Delaware corporation.2 TuSimple has two

classes of common stock. Class A common stock entitles the holder to one vote

per share.3 Class B common stock entitles the holder to ten votes per share and is

convertible at any time into one share of Class A common stock.4

White Marble LLC is a Delaware limited liability company.5 As of

November 9, 2022, it held 13,367,314 shares of TuSimple’s Class A common

stock.6 After transfers to trusts, White Marble LLC continues to hold 10,567,321

shares of Class A common stock of TuSimple.7 White Marble International

Limited (together with White Marble LLC, “White Marble” or the “Plaintiffs”) is

a Samoan entity that owns 12,000,000 shares of TuSimple Class B common stock.8

2
JX 5 (the “Prospectus”) at 39.
3
Id. at 1.
4
Id.
5
PTO ¶ 11.
6
Id.
7
Id.; Song Dep. 209:24−210:14.
8
PTO ¶ 12.

3
Xiaodi Hou (“Hou”) beneficially owns both White Marble entities. 9 Hou co-

founded TuSimple.10

Mo Chen (“Chen” or the “Defendant”) is the other co-founder of TuSimple.11

Chen beneficially owns 12,000,000 shares of TuSimple Class B common stock.12

B. Factual Background

1. Early history and formation of TuSimple

Hou studied in China and the United States, specializing in artificial

intelligence and deep learning.13 After earning a Ph.D. in Computation and Neural

Systems from the California Institute of Technology, Hou founded the startup

CogTu Technologies Limited (“CogTu”).14 Sina Corporation (“Sina”), a Chinese

media conglomerate, financed CogTu.15 When CogTu exhausted its funding, Sina

9
Id. ¶ 13.
10
Id.
11
Id. ¶ 14.
12
Dkt. 41 (“Answer”) ¶ 13.
13
Tr. 9:10−9:20 (Hou).
14
Id. at 9:21−10:2; Prospectus at 143. CogTu had built an online advertising platform
that used image-recognition technologies to improve advertisement targeting.
Tr. 9:21−10:2 (Hou).
15
Tr. 10:3−9 (Hou); JX 1; Prospectus at 75, 140, 143. Sina is a private company and
wholly owned subsidiary of a vehicle ultimately owned by New Wave MMXV Limited, a
British Virgin Islands company controlled by Charles Chao. See Sina Corporation, Form
20-F (2019) at 43. “Despite the fact that a SEC filing may constitute hearsay with respect
to the truth of the matters asserted therein, courts may consult these documents to ascertain

4
executive, Yunli Liu (“Yunli”), initiated discussions with Hou regarding the

formation of a new venture with the involvement of another individual. 16 In 2014,

Yunli introduced Hou to Chen,17 who was also the founder and the majority owner

of Hydron, Inc. (formerly known as Turingtech or Turing Auto, “Hydron”), a

facts appropriate for judicial notice under D.R.E. 201.” In re Santa Fe Pac. Corp. S’holder
Litig., 669 A.2d 59, 70 n.9 (Del. 1995) (citing Kramer v. Time Warner Inc., 937 F.2d 767,
774 (2d Cir. 1991)); see also Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 320
(Del. 2004) (indicating that courts can take judicial notice of filings with the Securities and
Exchange Commission (“SEC”) (citing Southmark Prime Plus, L.P. v. Falzone, 776 F.
Supp. 888, 893 (D. Del. 1991)). Sina is the parent company and controlling stockholder
of Weibo Corporation, a leading social media platform in China, and Weibo Corporation’s
variable interest entity, Beijing Weimeng Technology Co., Ltd. (“Weimeng”). See Weibo
Corporation, Form 20-F (Dec. 31, 2020). Chao is the chairman of Weibo Corporation’s
board of directors. Prospectus at 144−145. In April 2020, a Chinese state-backed
investment vehicle obtained a 1% equity interest in Weimeng and special governance
rights, i.e., “the right to appoint a director to Weimeng’s three-member board of directors,
and veto rights over certain matters related to content decision and certain future financings
of Weimeng.” Weibo Corporation, Form 20-F (Dec. 31, 2020) at 87; Angela Xiao Wu,
Golden shares in Chinese platforms: The state as news licensor and minority shareholder,
2 Platforms & Society 1 (2025). See Yulin Sun, Golden Shares Reimagined: Decoding
China’s Special Management Shares (March 20, 2024) https://ssrn.com/abstract=4765649
(describing the Chinese government’s development and use of the Special Management
Share (“SMS”) mechanism drawing distinctions with the European golden share models),
id. at 15 (“China’s strategy of applying SMS also demonstrates its desire to tighten control
over some of China’s largest companies softly. . . . [T]he SMS system is designed to
‘ensure that state-owned capital is always the center of the shareholding reform process,
and to ensure that it adheres to the correct content orientation and business direction.’”).
16
Tr. 10:13−19 (Hou); PTO ¶ 18; Hou Dep. 49:5−22; Tr. 10:3−9 (Hou).
17
Tr. 11:1−11 (Hou); Hou Dep. 49:2−5.

5
Chinese hydrogen-fueled truck manufacturing company backed by Sina.18 In 2015,

Hou and Chen co-founded TuSimple.19

TuSimple’s stated mission was to develop software and hardware for

autonomous trucking and create an autonomous freight network to make long-haul

commercial trucking safer and more efficient.20 Hou served as Chief Technology

Officer (“CTO”), focusing on research and development.21 Chen served as Chief

Executive Officer (“CEO”), responsible for strategy and fundraising.22 In its early

days, Hou and Chen were the only members of the Company’s Board of Directors

(the “Board”), with Chen serving as Executive Chairman.23

18
Chen Dep. 165:7−8, 166:8−11; JX 40 at 2; JX 323 at 48; Dkt. 42 (“Answer”) ¶ 21.
19
PTO ¶¶ 13−14. Hou Dep. 48:20−49:1, 50:6−13. Sina had previously extended a loan
to CogTu, which was transferred to TuSimple. Tr. 10:10−12 (Hou). See JX 6 at 12
(“TuSimple was originally incorporated as Tusimple (Cayman) Limited, a limited liability
company in the Cayman Islands, on October 25, 2016. In February 2021, the Company
deregistered as a Cayman Islands exempted company and continued and domesticated as
a corporation incorporated under the laws of the State of Delaware.”); see also JX 310 at
39 (referring to the repayment of the outstanding related-party loan of approximately
$3.7 million from Jinzhuo Hengbang Technology (Beijing) Co., Ltd. during the year that
ended on December 31, 2021).
20
Tr. 12:4−10 (Hou).
21
Id. at 11:8−15, 12:4−10; Hou Dep. 51:21−22, 52:9−14.
22
Prospectus at 143; Hou Dep. 51:19−21; Tr. 10:6−8 (Hou).
23
Prospectus at 143.

6
Sina was TuSimple’s first outside investor.24 It invested through its affiliate

Sun Dream Inc. (“Sun Dream”) by purchasing Series B redeemable convertible

preferred stock.25 In April 2019, Sina’s CEO, Guo Wei (also known as Charles)

Chao (“Chao”) joined the TuSimple Board.26 In June 2020, Cheng Lu (“Lu”)

became the fourth director.27 In September 2020, he replaced Chen as CEO.28 That

same month, Sina’s Chief Financial Officer, Bonnie Yi Zhang (“Zhang”), had also

joined the Board.29

2. TuSimple conducts an IPO, and scrutiny increases.

In April 2021, TuSimple conducted an initial public offering (“IPO”) of its

Class A common stock on Nasdaq, raising over $1 billion.30 By that time, Sun

Dream held more than five percent of TuSimple’s equity and had extended

convertible loans to the Company.31 In its registration statement for the IPO,

24
Tr. 10:3−9, 10:16−19 (Hou); JX 1; JX 5 at 75, 140.
25
Prospectus at 75.
26
Id. at 144.
27
Id. at 143.
28
Id. at 143; Hou Dep. 51:19−21; Tr. 10:6−8 (Hou). Lu holds a master’s degree in
business administration and has professional experience in both China and the United
States. See generally Lu Dep. 15:11−19:10.
29
Prospectus at 145.
30
JX 4; JX 6 at 12, 22; Tr. 282:11−21 (Lu); Hou Dep. 50:14−19. Following the IPO, the
Company’s market capitalization was $8.5 billion. JX 4.
31
Prospectus at 140, 161−163.

7
TuSimple disclosed that, on March 1, 2021, the Committee on Foreign Investment

in the United States (“CFIUS”) had requested that the Company file a notice

concerning Sun Dream’s holdings and that those holdings would convert into Class

A common stock upon completion of the IPO.32

In early 2022, U.S. regulators’ scrutiny of TuSimple intensified. On

February 18, TuSimple entered into a National Security Agreement (“NSA”) with

the U.S. government.33 The NSA sought to insulate the Board from Sina’s

influence. It prohibited Sina from nominating replacement directors or increasing

its holdings and required the appointment of a security director and a government

security committee.34 Thereafter, Sina’s board representatives—Chao and Zhang—

did not seek reelection at the 2022 annual meeting.35

On March 3, Lu resigned as CEO and director.36 After Lu’s resignation, the

Board appointed Hou as CEO and elected him to serve as the Chairperson of the

32
Id. at 140. The submission of a “notice” refers to the formal filing under 31 C.F.R.
§ 800.501(b)(2), whereby CFIUS may request the parties to a transaction that raises
national security considerations to file a notice outlining information on the transaction in
question.
33
JX 8 at 2−3; see Tr. 325:14−15 (Lu); id. at 202:24−203:2, 215:23:24 (Timmons); JX 517
at 9; JX 518 at 4; Chen Dep. 104:15−16.
34
JX 8 at 2.
35
JX 9 (referring to Chao as Cao Guowei and to Zhang as Zhang Yu).
36
JX 10 at 2, 5−10; Tr. 28:16−20 (Hou); Hou Dep. 52:19−53:5.

8
Board.37 In April, TuSimple announced that Chen would not stand for reelection. 38

At the 2022 annual meeting, stockholders elected five directors: Hou, Brad Buss

(“Buss”), Karen Francis (“Francis”), Michelle Sterling (“Sterling”), and Reed

Werner.39 Except for Hou, the other four directors were considered independent,

and none were affiliated with either Sina or Hydron.40

Around that time, TuSimple’s business performance began to deteriorate. In

April, a TuSimple test vehicle struck a highway barricade during road testing. 41

Securities class actions followed. In June, TuSimple’s audit committee (the “Audit

Committee”), with legal advisers from Sullivan & Cromwell LLP, launched an

internal investigation into potential related-party transactions with Hydron.42

In September 2022, Chen grew increasingly dissatisfied with Hou’s

leadership and began exploring options to sell his shares.43 But, because he was

37
Tr. 28:16−20 (Hou); Hou Dep. 52:19−53:5; JX 10 at 2.
38
JX 11 at 3.
39
TuSimple, Form 8-K (June 13, 2022); JX 11 at 3−5; JX 12 at 11−14.
40
See TuSimple, Schedule 14A (Apr. 29, 2022) at 12 (“Each member of each committee
of our board of directors, except for [] Hou who sits on our government security
committee only, qualifies as an independent director in accordance with the listing
standards of the Nasdaq Global Select Market.”).
41
JX 513 at 26−27.
42
JX 38 at 2−3; JX 40 at 2−3. The Audit Committee also focused on possible use of
Company resources or intellectual property. Tr. 289:7−24 (Lu); JX 38 at 3; JX 40 at 3.
43
JX 14 at 2; see generally JX 16.

9
aware of the ongoing investigation into TuSimple’s ties to Hydron, which

constituted material non-public information, the Company’s insider trading policy

prevented him from engaging in any sale.44

3. The Board terminates Hou as CEO and CTO.

By late October 2022, tensions within TuSimple had reached a breaking

point. The independent directors were pressing Hou to resign. Between

October 28 and 30, Hou and Chen spoke multiple times as Hou considered his

options.45 Despite the NSA’s restrictions, Sina executives—Chao, Zhang, and

Yunli—remained focused on TuSimple’s operations and governance. The

evidentiary record contains a large volume of communications during the critical

time period among Chen, Chao, Yunli, and Zhang (together, the “Sina bloc”)

44
JX 16 at 1. Under TuSimple’s Insider Trading Policy, Chen was not eligible to set up a
Rule 10b5-1 “trading plan.” See JX 17 at 24. During that same period, a former executive
of TuSimple warned Chen that TuSimple was losing its key players and that its value
would fall to zero if it stayed on its current path. JX 15 at 2. He urged Chen to push for
Hou’s removal or convert his Class B shares. JX 14 at 2. He also told Chen that three
directors would support the leadership change, which would have given Chen the backing
of the Board majority. Id.
45
JX 18 at 4; JX 19 at 5−6; JX 20 at 4; JX 21 at 4; JX 24 at 4; JX 25 at 4; JX 27 at 4. Chen
covered Hou’s legal fees until November 20, when Yunli directed him to cease payments.
See JX 203 at 4. Hydron paid part of the Gunderson legal fees incurred by TuSimple.
JX 217 at 1. Neither Plaintiffs nor Defendant developed this issue through trial or
deposition testimony.

10
discussing the Company’s governance.46 At that time, the Sina bloc did not want

Hou to resign voluntarily.47 Hou’s continued wavering, which his wife, Amanda

46
Message threads among the Sina bloc members concerning TuSimple’s governance are
voluminous. See JX 18 (Chao and Chen; Oct. 27, 2022, 5:19 p.m. – 5:27 p.m.); JX 22
(Yunli and Chen; Oct. 28, 2022, 6:25 a.m. – 7:15 a.m.); JX 29 (Chao and Chen; Oct. 30,
2022, at 10:34 a.m. – 12:33 a.m.); JX 32 (Chao and Chen; Oct. 30, 2022, at 6:40 p.m. –
12:00 a.m.); JX 522 (Yunli and Chen; Oct. 30, 2022, 6:40 p.m. – Oct. 31, 2022, 4:30 p.m.);
JX 36 (Chen, Yunli, and another individual; Oct. 31, 2022, at 3:13 a.m. – 12:12 p.m.); JX
416 (Zhang and Chang; Oct. 31, 2022, 7:24 a.m. – Nov. 4, 2022, 7:35 a.m.); JX 37 (Yunli,
Chao, and Chen; Oct. 31, 2022, 3:22 p.m. – 11:41 a.m.); JX 43 (Yunli and Chen; Nov. 1,
2022, 3:58 a.m.); JX 45 (Yunli and Chen; Nov. 1, 2022, 7:20 a.m. – 8:59 a.m.); JX 42
(Zhang, Chen, Yunli, and Chao; Nov. 1, 2022, 2:42 p.m. – 12:46 p.m.); JX 521 (Yunli and
Chen; Nov. 3, 2022, 5:54 p.m. – Nov. 4, 2022, 4:11 p.m.); JX 50 (Zhang, Chen, Yunli, and
Chao; Nov. 4, 2022, 7:03 a.m. – 12:20 p.m.); JX 417 (Zhang and Chang; Nov. 4, 2022,
9:24 a.m. – 5:01 p.m.); JX 47 (Yunli and Chen; Nov. 4, 2022, 5:54 p.m. – 3:13 p.m.); JX
48 (Yunli and Chen; Nov. 5, 2022, 3:26 a.m. – 9:43 a.m.); JX 49 (Yunli and Chen; Nov. 5,
2022, 4:06 a.m. – 10:22 a.m.); JX 523 (Yunli and Chen; Nov. 5, 2022, 4:06 a.m. – 10:22
a.m.); JX 418 (Zhang and Chang; Nov. 5, 2022, 7:08 a.m. – 8:30 a.m.); JX 420 (Zhang and
Chang; Nov. 5, 2022, 9:43 a.m. – Nov. 6, 2022, 4:59 a.m.); JX 57 (Zhang and Chang; Nov.
5, 2022, 3:08 p.m. – 4:30 p.m.); JX 52 (Zhang and Chen; Nov. 6, 2022, 1:54 a.m. – 3:01
a.m.); JX 55 (Chen, Zhang, Chao, and another individual; Nov. 6, 2022, 5:51 a.m. – Nov.
7, 3:10 p.m.); JX 421 (Zhang and Chang; Nov. 6, 2022, 5:55 a.m. – 6:40 a.m.); JX 422
(Zhang and Chang; Nov. 6, 2022, 12:04 p.m. – Nov. 17, 2022, 7:36 a.m.); JX 53 (Zhang
and Chen; Nov. 6, 2022, 10:24 p.m. – 11:20 p.m.); JX 526 (Zhang and Chen; Nov. 6, 2022,
10:24 p.m. – Nov. 7, 2022, 4:58 a.m.); JX 63 (Chen, Chang, Lu, Zhen, and Chao; Nov. 7,
2022, 1:12 a.m. – 3:59 p.m.); JX 59 (Chao, Chen, and Yunli; Nov. 7, 2022; 9:43 a.m. –
10:21 a.m.); JX 64 (Hou and Yunli; Nov. 7, 2022, 5:35 p.m. – 10:41 p.m.); JX 80 (Chen,
Chang, Lu, Zhen, and Yunli; Nov. 8, 2022, 12:57 a.m. – Nov. 9, 2022, 3:03 p.m.); JX 65
(Chen, Chao, Yunli, and another individual, Nov. 8, 2022, 4:42 a.m. – 2:31 p.m.); JX 423
(Chang, Lu, Chen, and Chao; Nov. 8, 2022, 6:05 a.m. – 6:12 a.m.); JX 77 (Chang, Yunli,
Lu, Zhen, Alice, and Chen; Nov. 8, 2022; 8:57 a.m. – 3:59 p.m.); JX 68 (Chen, Lu, Chang,
Zhang, Chao, and Yunli; Nov. 8, 2022, 4:01 p.m. – Nov. 9, 2022, 4:53 a.m.); JX 105
(Chang, Yunli, Lu, Zhen, Alice, and Chen; Nov. 8, 2022, 4:02 p.m. – Nov. 9, 2022, 12:08
p.m.); JX 71 (Chen, Lu, Yunli, and another individual; Nov. 8, 2022, 5:08 p.m. – Nov. 9,
2022, 2:15 a.m.); JX 525 (Chen and Lu; Nov. 9, 2022, 12:33 a.m. – 3:08 p.m.); JX 83
(Chen and Chao; Nov. 9, 2022, 1:09 a.m. – 1:25 a.m.); JX 119 (Lu and Yunli; Nov. 9,

11
Song (“Song”), and his lawyers exacerbated, soon became a source of concern and

aggravation for the Sina bloc.48

2022, 2:31 a.m. – 6:35 a.m.); JX 93 (Yunli, Chang, Lu, Chen, and Zhen; Nov. 9, 2022, 5:40
a.m. – 6:52 a.m.); JX 98 (Yunli and Chen; Nov. 9, 2022, 7:27 a.m. – 9:11 a.m.); JX 524
(Yunli and Chen; Nov. 9, 2022, 7:27 a.m. – 9:11 a.m.); JX 139 (Chang, Lu, Zhen, Chen,
and Yunli; Nov. 9, 2022, 9:32 p.m. – Nov. 10, 2022, 4:08 a.m.); JX 143 (Yunli and Chen;
Nov. 9, 2022, 10:19 p.m. – Nov. 10, 2022, 3:41 a.m.); JX 137 (Yunli and Zhen; Nov. 9,
2022, 10:26 p.m. – Nov. 10, 2022, 1:01 a.m.); JX 138 (Yunli and Zhen; Nov. 9, 2022,
10:26 p.m. – Nov. 10, 2022, 9:27 a.m.); JX 156 (Chang, Chen, Zhen, Lu, and Chao; Nov.
10, 2022, 12:51 a.m. – 9:27 a.m.); JX 157 (Chen and Zhang; Nov. 10, 2022 12:52 a.m.);
JX 527 (Chen and Zhang; Nov. 10, 2022, 12:54 a.m. – 6:11 a.m.); JX 175 (Chen and Chao;
Nov. 10, 2022, 2:40 a.m. – 10:00 a.m.); JX 186 (Chen, Chao, and Lu; Nov. 10, 2022; 4:55
p.m. – Nov. 11, 2022, 11:29 a.m.); JX 188 (Chang, Lu, Chen, and Zhen; Nov. 10, 2022,
6:32 p.m. – Nov. 11, 2022, 4:23 a.m.); JX 190 (Yunli and Zhen; Nov. 11, 2022, 12:21 a.m.
– 3:22 a.m.); JX 191 (Yunli and Zhen Nov. 11, 2022, 3:27 a.m.); JX 419 (Zhang and Chang;
Nov. 11, 2022, 7:40 a.m.); JX 201 (Yunli and Zhen; Nov. 17, 2022, 6:31 a.m.); JX 202
(Yunli and Zhen; Nov. 17, 2022, 6:31 a.m. – Apr. 22, 2023, 7:15 a.m.); JX 424 (Zhang and
Chang; Nov. 17, 2022 7:36 a.m. – Nov. 18, 2022, 3:29 p.m.); JX 425 (Zhang and Chang;
Nov. 17, 2022 9:21 a.m. – Nov. 19, 2022, 3:38 a.m.); JX 203 (Yunli and Chen; Nov. 20,
2022, 12:21 a.m. – 2:45 a.m.); JX 207 (Hou and Yunli; Nov. 23, 2022, 8:22 p.m. – 10:01
p.m.); JX 215 (Yunli and Chen; Nov. 28, 2022, 4:32 a.m. – 5:20 a.m.). Chen was not a
Sina executive, but these communications and other evidence presented at trial show that
he acted in close coordination with Sina’s leadership. See generally Curtis J. Milhaupt &
Wentong Zheng, Beyond Ownership: State Capitalism and the Chinese Firm, 103 Geo.
L.J. 665, 669 (2015) (“[W]ith respect to the relationship between firms and the state, a
focus on ownership alone is likely to mislead in the Chinese context, and policies pivoting
on equity ownership are likely to miss the mark.); id. at 716 (“Because the Chinese
economy under the institutions of state capitalism is highly susceptible to capture . . .,
successful Chinese firms of all ownership types share important traits that distinctions
based on corporate ownership alone simply do not pick up.”). The Sina bloc’s
communications reveal a hierarchy of loyalty and respect. See, e.g., JX 30; JX 42 at 7;
JX 46 at 4 (referring to Chao as “Chief” or “boss”); Tr. 18:4 (Hou) (referring to Yunli and
Chen as “law brothers”); Tr. 111:9−11, 111:14−21 (Song); Chen Dep. 148:17−150:1.
47
At the same time, Chen had communicated to Hou that “Sina [wa]s not satisfied.” See
JX 22 at 4.
48
JX 23 at 5−6; JX 29 at 7−8; id. at 7 (evidencing that Hou’s intention was to resign
voluntarily); JX 36 at 4; Lu Dep. 129:16−25, 130:13−18.

12
On October 30, Chen informed Chao that the Board had given Hou an

ultimatum: resign that day or face termination the following day. 49 The Sina bloc,

however, persuaded Hou not to resign and recruited him to support their broader

strategy to remove the other four members of the then-Board.50 On October 31,

the Company announced that the Board had terminated Hou as CEO and CTO and

removed him as Chairperson of the Board, although he remained as a director.51

That same day, the Wall Street Journal reported that TuSimple “face[d] federal

investigations into whether it improperly financed and transferred technology to a

Chinese startup [i.e., Hydron].”52 In response, TuSimple filed a Form 8-K

disclosing Hou’s removal and that the Audit Committee was investigating potential

related-party transactions.53 The filing stated that the ongoing Audit Committee

investigation had revealed that, during 2021, TuSimple’s employees might have

spent paid hours working on matters for Hydron.54 Hou forwarded the Wall Street

49
JX 28 at 5. Chao directed Chen to prepare a blank resolution in anticipation of the
Board’s action.
50
The strategy is reflected in an October 31, 2022, text message between Yunli and Chen,
reporting on his conversation with Hou, during which Hou agreed to: (1) wait for the
Board to fire him, (2) no longer be the CEO, and (3) work with Chen and Chao to
overthrow the Board at the appropriate time. JX 32 at 4; JX 522 at 3.
51
JX 28 at 2.
52
JX 34 at 1.
53
Tr. 16:11−14 (Hou); JX 38 at 2, 5.
54
JX 38 at 2. The estimated value of the paid hours was less than $300,000.

13
Journal article to his counsel at Quinn Emanuel Urquhart & Sullivan, LLP

(“Quinn”) and Kirkland & Ellis LLP (“K&E”).55 Despite the article’s tenor and

TuSimple’s filing, the Sina bloc reacted positively.56 When Chao read the language

describing the Hydron investigation, he commented: “This is nothing remarkable.

It shows they have nothing.” Yunli added, “Yeah, they [could] vote to fire the

CEO based on this alone.”57

After Hou’s removal, the Sina bloc shifted its focus to regaining control of

the Company’s Board and ending the Company’s obligation to comply with

Nasdaq’s independence requirements.58 On November 1, Chen circulated a draft

letter to other members of the Sina bloc, addressed to TuSimple’s stockholders. 59

The letter called for the reinstatement of “the original members of the Company’s

management, including, without limitation, [] Chen, [] Lu and [] Pat Dillion

[sic].”60 On the same day, both Yunli and Chen communicated with Hou, who

55
JX 33 at 1; JX 34 at 1. That evening, a K&E lawyer advised him not to send “the letter.”
JX 41 at 2.
56
JX 37 at 5−6.
57
Id.
58
JX 39 at 5.
59
JX 42 at 6. Chen sought guidance from Chao and Zhang on how to revise it. Id.
60
JX 42 at 7. Patrick Dillon was TuSimple’s Chief Financial Officer at the time of the
IPO. Prospectus at 144.

14
continued to hold approximately 29.7 percent of the Company’s voting power. 61

In those communications, Yunli and Chen emphasized that Hou bore the

responsibility for the course of events that had unfolded and urged him to focus on

technical matters.62

In the days that followed, the Sina bloc continued to strategize while

maintaining close contact with Hou.63 Chen and Yunli discussed whether Hou

would agree to cede his voting rights for two years, and whether a proxy

arrangement would suffice if they could not directly secure voting control over

Hou’s Class B shares.64 The discussions carried on into November 5 and 6. Zhang

noted that, under the NSA, the security director did not have to be independent so

long as CFIUS agreed.65 Chen sent Zhang a draft stockholder consent for the

61
JX 43; JX 44; JX 323 at 3.
62
JX 45 at 5.
63
JX 47; JX 521.
64
JX 521 at 4. In the same exchange, Chen observed that their most immediate obstacle
lay with the three independent directors, who, in his view, had derailed a potential
acquisition. See JX 47 at 6. Yunli wondered if Hou feared that they might “go after him.”
JX 521 at 4; see also JX 47 at 6 (translating “go after him” as “harm him”).
65
JX 50 at 6. Chao responded “[t]hat’s good.” Id.

15
removal of directors.66 In a separate text message exchange,67 Zhang shared a

checklist of action items, including the documents to be signed, the signature

methods, and the timing.68 When Chen relayed to the group that Hou’s lawyers

had suggested amending the certificate of incorporation to prevent additional stock

issuances, Chao commented that limiting issuances was contingent on Hou

surrendering his voting rights.69

On November 7, Chen’s lawyers in the Beijing office of Gunderson Dettmer

Stough Villeneuve Franklin & Hachigian, LLP (“Gunderson”) were preparing the

final drafts of three documents that would execute the Sina bloc’s strategy: (i) an

irrevocable proxy and power of attorney; (ii) a stockholder consent to remove

directors; and (iii) a voting agreement. Chen informed two Gunderson lawyers—

Richard Chang (“Chang”) and Zhen Liu (“Zhen”)—that he would be going to their

66
JX 52 at 4. Chen informed Zhang that the proxy was still being prepared. Id. Zhang
indicated that the proposal would become effective upon the signing of enough
stockholders and that delivery to the corporation’s offices is required. Id. at 2. Chen then
shared a Word file labeled “Irrevocable Proxy and Power of Attorney - White Marble.”
JX 53 at 4; JX 526 at 3.
67
The Sina bloc commented on the release of a Form 8-K, which indicated that no FBI
investigation was ongoing. JX 55 at 6; JX 56 at 1. In addition, Mo Chen asked whether
the “T” day had been set, and Zhang responded that it had not been decided yet. JX 55
at 6. Chao then asked whether Chen’s lawyers had provided any feedback, and Chen
responded that “[t]hey received the instructions, and [are] now start[ing] to prepare.” Id.
68
JX 55 at 6; JX 79.
69
JX 55 at 7.

16
offices and instructed them to “[g]et the files ready” for him to sign.70 Later that

day, the Sina bloc, together with Chang, Zhen, and Lu, coordinated the logistics of

delivering the documents to the Company’s registered office in the United States. 71

Chang then shared PDF versions of the documents with Chen, Lu, Chao, and

Zhang.72

That same day, TuSimple filed a Form 8-K disclosing that Hou had been

terminated due to “concerns about his lack of candor and transparency with the

Board” and “in connection with an ongoing investigation that was initiated by the

[] Audit Committee.”73 While the Sina bloc and their attorneys finalized the

logistics,74 Hou was in regular contact with his counsel and Yunli.75

70
JX 61 at 5.
71
JX 63 at 5−6. See also Lu Dep. 124:11−126:12 (indicating that it was unclear why Chen
could not personally travel to the United States).
72
JX 63 at 6−7. The PDF documents were labeled as follows: (i) “Irrevocable Proxy and
Power of Attorney;” (ii) “TSP - Stockholder Consent (Removal of Directors)(Draft 1105);”
and (iii) “Voting Agreement.” Id.
73
JX 56 at 1; JX 58.
74
JX 70; JX 71; JX 72. Lu told Chen that the Interim Chief Financial Officer Eric Tapia
would be leaving the office at 2:00 p.m. the next day and that the Company’s lawyers
would be working remotely. JX 77 at 16−17. Chen flagged that one open issue was
“study[ing] how to make” TuSimple’s former Chief Product Officer Charles Price an
“independent director.” JX 76 at 5; see Prospectus at 143, 145.
75
JX 54 at 1; JX 60. Hou’s attorney from Quinn introduced him to attorneys at the
Delaware law firm of Abrams & Bayliss LLP (“A&B”). JX 51 at 1. On November 7,
Song contacted Bee Choo Lim, from the Asian Infrastructure Investment Bank, to request

17
4. The November 9 meeting and execution of the documents

a. While Chen and the Sina bloc finalize their plans, the
signed documents are transferred to the United
States.

On November 8, 2022, a Gunderson attorney met with Xiao Liu (“Xiao”),

one of Hou’s lawyers from Quinn’s China office.76 Gunderson informed Xiao that

“the business side” had agreed to sign a proxy that would also protect Hou from

any appearance of retaliation against the Board.77 Xiao said that he would show

the proxy to his U.S. colleagues and that he “won’t create any obstacles.” 78 When

Xiao mentioned that Hou wanted to issue a public statement about Hydron,

Gunderson told him that Company matters took priority.79

That afternoon, Chang told Lu that Hou needed to sign the “voting

agreement + proxy.”80 Lu noted that the signed version of the Irrevocable Proxy

her cell phone number as “[they] might need to move really quickly in the next couple of
days” and “need to reach out to [her] to exchange information and ask [her] opinions.”
JX 62 at 1; Song Dep. 88:19−21. Song also indicated that there was no SEC or FBI
investigation ongoing, but that the board had “voluntarily reached out to [the] SEC this
morning and invited further scrutiny, as part of a measure to protect themselves” [i.e., the
board members]. JX 62 at 1. Song claimed that she contacted Choo to ask if she would
be open to considering a board position. Song Dep. 89:8−11.
76
JX 80 at 3; Timmons Dep. 16:6.
77
JX 80 at 3; Timmons Dep. 16:6.
78
JX 80 at 4.
79
Id. The members to the chat also discussed the removal of the then-CEO and President,
Ersin Yumer, but Chen indicated that “[t]he boss said there’s no rush.” Id. at 4−5.
80
JX 68 at 5; JX 69 at 3.

18
and Power of Attorney still contained bracketed language.81 Chang responded that

they would have that fixed at Gunderson’s San Diego office without affecting the

signature page.82

Later that evening, Chen, Yunli, Lu, and Zhen discussed the final

arrangements for “signing tomorrow.”83 Gunderson associate Alice Lu (“Alice”)

agreed to accompany Lu to Hou’s home in San Diego.84 After receiving detailed

instructions,85 she worried that a hotel lobby was too public if she needed to record

the signing.86 Zhen replied that they were going to Hou’s home and that she should

follow Lu’s lead.87

81
JX 68 at 5; JX 69 at 3 (“Just to clarify, the second page of the proxy has a line: [The
Principal Parties agree to permit an appropriate legend on certificates evidencing the
Subject Shares reflecting the grant of the irrevocable proxy contained in this irrevocable
proxy and power of attorney.]”). Lu also pointed out that the signature pages with Chen’s
signature had no date. JX 68 at 5−6; JX 69 at 3−4.
82
JX 68 at 5; JX 69 at 3.
83
JX 77 at 24−26.
84
JX 78 at 1; JX 91 at 4; JX 92 at 2. Alice booked her ticket from San Francisco to San
Diego the day before and was instructed to bill her expenses to Chen’s client number. JX
84 at 1; Lu Dep. 132:22−133:4.
JX 97 at 1; JX 511 at 1. Alice was told that it would be “[b]est not to go to the S[an]
85

D[iego] office” to scan the documents. JX 90 at 1−2.
86
Id. at 2.
87
Id.

19
Meanwhile, Hou spoke with his attorneys at Quinn, who informed him that

they had updates and additional information regarding his options. 88 Hou also

contacted K&E.89 Xiao at Quinn then emailed Chang at Gunderson, memorializing

a prior call with Zhen and Chang and noting that Hou, Chen, and the other

stockholders had a common interest.90 Xiao attached a “Stockholder Written

Consent Amending TuSimple Bylaws” that the U.S. team had drafted to freeze

board action, while warning that informal voting understandings among

stockholders could trigger the constraints of Delaware’s antitakeover statute (8 Del.

C. § 203).91

That evening, Yunli informed others in the Sina bloc that he told Hou “he

need[ed] to sign tomorrow” and that Hou “was a little hesitant [because] [h]e [did

88
JX 85 at 1; JX 86 at 1; JX 87 at 1.
89
JX 88 at 3−4. Hou also contacted other law firms. See JX 73 at 2; JX 74 at 2; JX 75 at
2.
90
JX 89 at 1.
91
Id.; JX 507. The email from Xiao explained that “DGCL Section 203 puts a 3-year
moratorium on ‘business combinations’ with a company when a stockholder becomes an
‘interested stockholder’ … [i.e.,] owners of 15% or more of the outstanding voting stock
of the corporation” and that “‘ownership’ [] includes ‘any agreement, arrangement or
understanding for the purpose of . . . voting . . . stock.’” JX 89 at 1 (emphasis in the
original); JX 507. Xiao concluded his email by writing that “[a] consequence of becoming
an interested stockholder is that the client would be prohibited from receiving ‘the benefit,
directly or indirectly … provided by or through the corporation or any direct or indirect
majority-owned subsidiary.’ [] Our concern is that this would mean that the client could
no longer receive director compensation.” JX 89 at 1; JX 507.

20
not] know the specific details.”92 But once Yunli assured him that the existing

board would be dissolved if he cooperated, Hou “suddenly got excited and agreed

to proceed.”93 Consistent with Yunli’s account, at 11:34 p.m., Hou texted Lu that

he had just spoken to “Chief [Yunli].”94 After confirming that Lu was going to be

in San Diego the following day, Hou shared his home address.95 Hou then added:

“let’s do it. I took the personal risk I talked about this afternoon. After all, I don’t

have any deals. So even if being arrested, it would be only a couple of days ”96

That night, an unnamed courier left Hong Kong with documents that Chen had

signed earlier that day.97

Overnight into November 9, Hou remained in contact with his lawyers at

Quinn.98 Shortly after midnight, Xiao asked Gunderson for the prepared

92
JX 98 at 4.
93
Id.
94
JX 119 at 15−16; JX 340 at 2; Lu Dep. 144:22−25.
95
JX 119 at 15−16; JX 340 at 2. One of Hou’s attorneys from Quinn testified that he was
aware that a meeting would take place on November 9, but did not know that the
agreements would be discussed. Timmons Dep. 35:15−24. Perhaps this attorney was not
aware of that fact, but other Quinn attorneys certainly were.
96
JX 119 at 15−16; JX 340 at 2. See also JX 525 at 3 (Chen to Lu: “Wishing you all the
best!”).
97
JX 65−66; Lu Dep. 120:1−6.
98
JX 99 at 1.

21
paperwork.99 Quinn told Hou that they had been speaking with Chen’s attorneys

at Gunderson and wanted to discuss next steps.100 At 2:04 a.m., Chang at

Gunderson sent Quinn three PDF documents labeled as follows: (i) “Voting

Agreement;” (ii) “Irrevocable Proxy and Power of Attorney - White Marble;” and

(iii) “TSP - Stockholder Consent.”101 The version of the Irrevocable Proxy and

Power of Attorney sent to Hou’s counsel contained no bracketed language.102

At 3:21 a.m., Hou asked Quinn to share “the proxy terms from the other side

so [he could] review the specific terms and content.”103 Quinn forwarded Chang’s

email and the three attachments.104 The terms of the draft Voting Agreement and

the draft Irrevocable Proxy and Power of Attorney stated that the two instruments

would terminate only by written mutual agreement of White Marble and Chen.105

99
JX 106 at 1 (bearing the subject line “Call just now”); JX 109 at 1.
100
JX 115 at 1; Hou Dep. 194:8−197:2, 200:16−202:4 (acknowledging the documents’
transmittal but claiming that “no one at Quinn told [Hou]” about the prior conversations
with Chen’s lawyers).
101
JX 109 at 1; JX 110; JX 111; JX 112.
102
JX 110 at 2.
103
JX 121 at 1.
104
JX 122 at 1; Timmons Dep. 33:14−19.
105
JX 123 at 2 § 3.1; JX 124 at 2; see also JX 127 at 2 § 3.1; JX 128 at 2.

22
At 7:44 a.m., a Quinn attorney asked Hou to “[p]lease call me when [yo]u can” and

later requested additional information about Hou’s Class B shares.106

b. Hou signs the documents.

On the morning of November 9, 2022, Lu flew from Las Vegas to San

Diego.107 Once he arrived in San Diego, he met with Alice and the pair drove to

Hou’s home, where they presented him with the documents for signature. 108

Throughout the visit, Alice live-messaged the Gunderson team to report

developments.109 Other contemporaneous communication took place between

Yunli and Lu.110 Hou had asked to speak with Yunli, who passed that information

along to Lu at 11:05 a.m.111 At 12:08 p.m., Alice asked if anyone could join a call

because “[Hou] [wa]s trying to go over the docs one by one and is looping in other

106
JX 116 at 2. At trial, Hou, Song, and their attorneys tried to refute that they had
connected after Gunderson shared the draft documents and before the signing. Hou Dep.
194:8−197:2, 209:18−210:2, 236:14−237:1; Song Dep. 172:1−8, 172:12−13; Timmons
Dep. 34:6−18. That testimony is not credible. See, e.g., Lu Dep. 149:14−18.
107
Lu Dep. 41:1−6, 52:11−12; Tr. 311:16−21 (Lu).
108
Tr. 29:10−14 (Hou); Song Dep. 102:21−24, 106:12−20, Lu Dep. 119:14−17,
132:12−15, 139:10−11, 139:20−21, 142:19−21. At trial, Lu recounted that the reason for
his involvement at that stage was his planned return as CEO since “it was important for
someone to help facilitate the signing, document delivery, and to hopefully ensure [a]
relatively smooth transition.” Id. at 127:10−21.
109
See JX 90 at 5−33.
110
JX 119 at 18.
111
Id. at 12−20.

23
lawyers to challenge this plan in general.”112 Afterwards, Yunli and Lu had a 20-

minute call.113

At 12:35 p.m., Alice reported that “[Hou] sa[id] the term of the proxy was

agreed to be two years but that [was] not reflected in the doc.” 114 At 12:54 p.m.,

Alice added that “[t]hey want two years and they were on the phone with [Yunli,

the Sina executive] who confirmed it should be two years so this is the only sticky

point.”115 At 12:57 p.m., Yunli texted Lu: “[t]wo years for that one,” referring

explicitly to a single instrument—not both documents.116 In fact, Alice later

reported that Song called Quinn “to go over the voting agreement as well.” 117 Alice

then relayed that Quinn had warned that before signing and filing the documents,

112
JX 90 at 5.
113
JX 119 at 18; Song Dep. 121:17−122:22.
114
JX 90 at 6; see also JX 132 at 1.
115
JX 90 at 6; see also JX 132 at 1; Song Dep. 131:2−3.
116
JX 119 at 19.
117
JX 90 at 8; see also JX 133 at 1; Lu Dep. 133:24−25 (“Quinn [] was on the phone at []
Hou’s house”); id. 145:12−25, 146:12−149:12, 150:13−16. Despite the contemporaneous
evidence of Hou and Song’s communication with their counsel during the November 9,
2022, meeting, at trial, they took the implausible position that no such communication
occurred. See Song Dep. 110:13−23, 116:16−117:9. Song also deleted all telephonic
records and text messages dated November 9, 2022, from her phone. See Hou Dep.
207:23−209:16 (indicating that “[t]hat [was] the moment when [Hou] talked to [the Quinn
attorney] about the proxy” but later retracting that testimony); id. 211:7−17, 252:9−254:19;
Song Dep. 117:10−121:16, 124:23−126:11, 140:1−12, 148:7−152:14. The court finds that
testimony not credible.

24
Hou should be prepared for a potential lawsuit by the four soon-to-be-removed

directors, including a motion for entry of a status quo order.118

i. The signing and the video

At 1:13 p.m., Alice wrote in the Gunderson group text thread “he’s signing”

and confirmed that they signed the documents as presented.119 But Hou wanted to

memorialize the limited duration of the proxy. So with Lu and Alice present, he

recorded a video explaining his understanding. The video was played at trial. The

transcript reads as follows:

Hou: So, for today’s date, it is November 9th, 2022. And I have signed
an irrevocable proxy and power of attorney, and according to my
understanding, this irrevocable proxy and power of attorney’s duration
is for two years, which means that it will expire on November 9th, 2024.
That’s my understanding, Cheng, is that your understanding as well?
Lu: It is. I concur. Okay.
Hou: And the second matter is that the action by unanimous written
consent of the board of directors of TuSimple Holdings Inc. We would
like to amend this board resolution by adding another clause of
appointing me, Xiaodi Hou, as the CTO of the Company condition[ed]
on the completion of the internal investigation. Is that yours?
Lu: Yes. I concur.
Hou: Okay. Thank you.120

118
JX 90 at 12; see also JX 134 at 1.
119
JX 90 at 15−16. See also JX 100 (recording Hou while signing the documents).
120
JX 90 at 15−17; JX 101; see also JX 135 at 1; JX 136 at 1; JX 144 at 1.

25
Hou made no mention of the Voting Agreement in the video. Alice reported

to the Gunderson team chat on the substance of the video recording and added that

she would “go get [Chen]’s signature.”121 The documents with Chen’s wet

signature had arrived in Los Angeles, where Hank Liu, an employee of TuSimple,

collected them and later handed them to Alice in San Diego. 122 Later that day,

Yunli sent Lu a draft letter addressed to the Board.123 The letter criticized the

Board’s actions, urged Chen’s return as Executive Chairman, sought Lu’s

reinstatement as CEO, and proposed that Hou return in a technical role after the

investigation.124

c. The fully executed versions of the documents.

Multiple communications from November 9 corroborate the shared

understanding that the Irrevocable Proxy and Power of Attorney would carry a two-

year duration. Chen wrote that they might “sign a side agreement” to specify the

two-year term.125 Hou and Song then sought out Chen and the Gunderson

121
JX 90 at 17; see also JX 94 at 1.
122
Lu Dep. 119:25−120:24; JX 66; JX 90 at 5.
123
JX 119 at 21.
124
Id. It is unclear whether the letter was delivered to the Board.
125
JX 105 at 20.

26
lawyers.126 Zhen at Gunderson proposed sending the proxy to Hou first. 127 Zhen,

the Gunderson lawyer, shared that Hou’s lawyer “[wanted] to synchronize with

[her].”128 Later, Zhen told Lu there was no need to send a new proxy because they

would revise the PDF to reflect the two-year term and ensure that the hardcopy to

be delivered the next day was “also valid for two years.”129

Hou continued conferring with counsel at K&E130 and Quinn, which

circulated other Word versions of the three documents.131 A Quinn lawyer later

sent Song a message joking that he hoped Hou was “a better cook than a

negotiator,” adding that he “understood the situation.”132 That same day, Hou’s

lawyers from three different firms conferred on the draft Voting Agreement and

the irrevocable proxy and its implications.133

126
JX 105 at 21.
127
Id.
128
Id. at 23; see also JX 140 at 2; JX 162 at 4. Zhen later referred to her involvement with
Hou as “feeding the baby .” See JX 137 at 2; JX 138 at 2; JX 142 at 6.
129
JX 142 at 6−7.
130
JX 147 at 1.
131
JX 148 at 1; JX 149 at 1; JX 150; JX 151; JX 152. The Word versions are withheld as
privileged.
132
JX 154 at 2.
133
JX 222 at 2; JX 225 at 4−5.

27
That evening, Alice circulated to Lu and the rest of the Gunderson team the

fully executed copies of: the Irrevocable Proxy and Power of Attorney (the

“Irrevocable Proxy”);134 the Voting Agreement (the “Voting Agreement”);135 a

written consent of the stockholders removing Buss, Francis, and Sterling; 136 a

written consent of Hou as the sole director appointing Lu and Chen to the Board; 137

and a unanimous written consent of the Board removing Yumer as CEO and

President, and appointing Lu as the CEO and Chen as Chairman (the “Board

Unanimous Written Consent”).138 Alice noted that “the Irrevocable Proxy [] ha[d]

been updated to reflect the two-year term as requested by [Hou].”139 The updated

Irrevocable Proxy stated that it would remain in effect “until the earlier to occur of

(i) the two-year anniversary of the date of this irrevocable proxy and power of

attorney and (ii) mutual agreement of both [Chen] and [Hou] in writing.”140 By

134
JX 164 at 1; JX 165.
135
JX 164 at 1; JX 169.
136
JX 164 at 1; JX 168.
137
JX 164 at 1; JX 167.
138
JX 164 at 1; JX 166.
139
JX 164 at 1.
140
Id. at 3; JX 165 at 2.

28
contrast, the Voting Agreement was unchanged, and the executed Board

Unanimous Written Consent did not provide for Hou’s return as CTO.141

Around the same time, Xiao, the Quinn lawyer, told Gunderson that Quinn

and co-counsel had “suggestions regarding the shareholders’ actions (and

underlying agreements).”142 Shortly after, Gunderson sent Lu the fully executed

PDF copies of the Irrevocable Proxy and the Voting Agreement “for [Hou]’s

record.”143

That evening, Hou and his counsel discussed the next steps. 144 At 7:51 p.m.,

Quinn convened an urgent call with Hou, A&B, Olshan Law, and Chang from

Gunderson.145 The call lasted about 40 minutes.146 Among the topics of discussion

were the “voting agreement [and] the irrevocable proxy.”147 After that call, Hou

141
JX 164 at 21; JX 166 at 1−2.
142
JX 183 at 1.
143
JX 171 at 1 (attaching two documents labeled “Irrevocable Proxy and Power of Attorney
11-9-22 (rv).pdf” and “Voting Agreement 11-9-22.pdf”); JX 172 at 1; JX 173; JX 174.
144
JX 141 at 1; JX 155 at 1.
JX 177 at 1 (the subject line read “[c]all re TuSimple--URGENT”); JX 178 at 1; JX
145

180 at 1; JX 181 at 1.
See JX 222 at 2 (November 9, 2022, time entry for .70 hours (“Cal[l] with client, Quinn
146

and corporate team re TuSimple”)).
147
Id. (next attorney time entry for November 9, 2022); see also JX 225 at 4−5 (November
9, 2022, time entry for 9.10 reflecting “multiple communications with [A&B], Olshun,
Gunderson, QE team and client re various issues relating to strategy,” and time entry for

29
wrote the following message to one of the Quinn lawyers who had participated:

“Thanks Brian. I think the message has been delivered. I really appreciate your

ownership and professionalism. The situation is a bit awkward now. Sorry for

giving you the extra handcuffs in this case.”148 At 11:54 p.m., Zhang from K&E

wrote to Hou “If you need anything, just let me know.”149

Overnight, Chen told Zhang that Hou had signed.150 The Sina bloc also

exchanged messages about the biographical information to be included in the

Form 8-K,151 and the Gunderson lawyers reminded each other to update the draft

Schedule 13D “about the two years.”152

5.50 reflecting “confer[ring] with team regarding [] Chen[’s] proposal; confer[ring] further
with team regarding next steps; review[ing] legal analysis from Dechert; review[ing] legal
analysis from A&B” and that there were “miscellaneous conferences with client regarding
status and consents.”); JX 225 at 5 (November 9, 2022, time entry for 1.60 indicating
“[c]alls with [] Chang and [Zhen] [at Gunderson].”).
148
JX 179 at 2. The following morning at 10:30 a.m., the same Quinn attorney texted Hou
as follows: “Please keep us posted on any developments today. Was the notice delivered?
I will be shocked if [the ousted directors] hand over the keys without a fight. We are
standing by.” Id.
149
JX 195 at 3.
150
JX 527 at 3.
151
JX 156 at 6−8.
152
Id.

30
5. The Company’s new governance

On November 10, 2022, Lu reported that the Company had confirmed the

termination of four directors.153 The Company filed a Form 8-K disclosing that,

effective that day, the Board changes left it noncompliant with Nasdaq rules on

board and committee independence.154 Hou forwarded the filing to Quinn,

commenting, “[l]ooks like it has been smooth so far.”155 When Yunli asked Zhen

from Gunderson if Hou had gotten the “2-year supplement,” Zhen confirmed that

it was in the proxy.156 Separately, Lu told James Mullen (“Mullen”), TuSimple’s

former Chief Administrative Officer and General Counsel, that Hou’s voting rights

had been taken from him, acknowledging the optics were “not great.”157 Mullen

replied: “So now Founder in Beijing who founded Hydron has full controlling

shares. Yeah, I can see why you say the optics aren’t great.”158

On November 11, the Company filed a Form 8-K announcing the four

director removals and the election of Chen to the Board as Executive Chairman,

153
JX 186 at 6.
154
JX 182 at 2.
155
JX 189 at 1.
156
JX 191 at 2.
157
JX 193 at 2; Tr. 295:14−15 (Lu); Lu Dep. 220:16−18.
158
JX 193 at 2.

31
and the appointment of Lu as CEO.159 That same week, Hou, who remained as a

director, began requesting details of the Company’s arrangements with Lu and

signaling concern about the scope and terms of Lu’s compensation.160 Chen was

evasive, replying that Chao, Sina’s CEO, had handled the decisions around Lu’s

salary.161

On November 14, Gunderson sent Chen a draft Schedule 13D,162 which was

finalized and filed the next day. The Schedule 13D’s Item 3 described a “Proxy

Voting Arrangement” under which White Marble authorized Chen to vote all White

Marble’s shares, and stated the arrangement remained “in effect until the earlier to

occur of (i) the two year anniversary of the date of the Irrevocable Proxy and

(ii) mutual agreement in writing to terminate the Irrevocable Proxy and the Voting

Agreement.”163 It contained the following disclaimer:

The foregoing description of each of the Voting Agreement and the
Irrevocable Proxy does not purport to be complete and is qualified in
its entirety by reference to, respectively, the complete text of the
Voting Agreement, which is filed as Exhibit 99.2 hereto, and the

159
JX 176. The filing formalized the changes contemplated in the stockholder written
consent executed two days earlier.
160
JX 207 at 4; JX 205 at 4; JX 206; JX 208; JX 209; JX 210 at 4.
161
JX 210 at 4; Lu Dep. 79:17−85:18 (recounting multiple meetings with Chao and Zhang
over TuSimple’s “future,” including its board composition).
162
JX 197 at 1.
163
JX 198 at 8, Item 3.

32
complete text of the Irrevocable Proxy, which is filed as Exhibit 99.3
hereto.164

The Company’s November 16 Form 8-K described the duration differently

from that of Chen’s Schedule 13D. It represented that the Irrevocable Proxy would

expire on the earlier of two years or a mutual written agreement, and the Voting

Agreement would terminate “upon mutual agreement among [] Chen and [White

Marble].”165 The same is true for the December 16 Schedule 14C.166

The November 10 disclosures drew media attention, but internal messages

show the Sina bloc was unfazed. For example, a Forbes article titled “Robot Truck

Developer TuSimple At Risk Of Nasdaq Delisting After Founders Fire Its Board”

prompted a celebratory reaction.167

164
Id.
165
JX 199 at 2. The same Form 8-K disclosed the termination Yumer. Id. at 3−11.
Meanwhile, Lu and Mullen discussed Board candidates and the Company’s path forward.
JX 200. They lamented that TuSimple had “pissed off a lot of people this past year,”
calling it “beyond a shame[,] [a]bomination[,] [and] despicable.” Id. at 2−3. When Lu
said that the Company “got to go back on being a software technology company,” Mullen
responded “[n]ot entirely sure what you all mean by that. But no doubt the tech needs to
be the top focus.” Id. at 3.
166
JX 227.
167
Compare Alan Ohnsman, Robot Truck Developer TuSimple At Risk Of Nasdaq
Delisting After Founders Fire Its Board, Forbes (Nov. 11, 2022)
https://www.forbes.com/sites/alanohnsman/2022/11/10/robot-truck-developer-tusimple-
at-risk-of-nasdaq-delisting-after-founders-fire-its-board/, with JX 201 at 2 (Zhang’s
message to Yunli: “ Mission accomplished! You played the most important role and
then just waved your sleeve and left. ”).

33
In the days that followed, Hou continued to engage with his counsel and

circulated the executed documents.168 Chen told Yunli at Sina that Hou “still

want[ed] to control the [C]ompany” and to obstruct Lu’s leadership. 169 Hou told

his lawyers that Chen and Lu’s roadmap was: “1. assemble the new board,

2. distribute stock dividend, [and] 3. sell the company.”170 In fact, Lu and Mullen

weighed the feasibility of a sale, with Mullen urging the elimination of Class B

shares and speed.171 Lu replied that divesting China was necessary and confirmed

that TuSimple China still operated.172

168
On November 27, 2022, Hou emailed the Irrevocable Proxy and Power of Attorney
and the Voting Agreement to an attorney at McDermott Will & Schulte LLP
(“McDermott”) with subject “Proxy agreement.” JX 211 at 1; JX 212; JX 213; JX 214.
As reflected in McDermott timesheet, Song had reached out to McDermott already on
November 24, 2022. See JX 519 at 3. McDermott scheduled a call with Hou and Song
for November 29. Id.
169
JX 215 at 4.
170
JX 216 at 1.
171
JX 220 at 1. Mullen warned that cash would erode, peers would catch up, and no
partner would engage with Hou and Mo in the mix. Id. He added that Nasdaq was
pressing and that he read the proxy to mean “Mo has to agree to return the voting shares
to [Hou] for the next 2 years,” concluding, “Window is short.” Id.
172
Id. at 2. Accordingly, on December 21, 2022, TuSimple disclosed that the Board had
authorized a broad restructuring plan focused on cost reduction, which contemplated
global employee headcount reduction by 25%. TuSimple, Form 8-K (Dec. 21, 2022); JX
261 at 5−6. See also JX 261 at 6:
Over time, the Board examined the possibility of selling TuSimple China and
retaining TuSimple U.S. and vice versa. In late 2022, TuSimple disclosed
that most of the cost reductions it had implemented to date had been made

34
On January 17, 2023, Song, referring to the White Marble entities, emailed

Quinn to “[s]trategize on [Hou]’s holding company’s reorg, and stock

liquidation.”173 Song had also transmitted the Voting Agreement and the

Irrevocable Proxy to Hou and her banker at JP Morgan Chase & Co. (“JP Morgan”)

because they “were trying to sell [their] shares.”174

with respect to TuSimple U.S. because selling TuSimple China was being
considered. . . (“[T]he Company continues its plan to explore strategic
alternatives for its Asia business, including a divestiture.”). In March 2022,
TuSimple announced that it was exploring possible transactions and
partnerships for its APAC businesses, but at that time, it did not seek to sell
them.
173
JX 231 at 1. The record is replete with evidence of Song’s direct participation in the
negotiations before signing, during the November 9, 2022, meeting, and in devising a
litigation strategy afterwards. Timmons Dep. 23:10−14; id. at 25:9−14 (“[W]e, Quinn [],
represents [] Hou . . . Amanda, his wife, has been involved from the very beginning in the
engagement, in the sense that she has been facilitating communications between us.”).
Song’s centrality was also known to all the individuals who are involved in the facts that
led to this litigation. See JX 23 at 6; JX 28 at 5 (Chen telling others that “H[ou’s] wife
called [him] today and told [him] that she wanted to forcefully fire the director today.”);
see also JX 154 at 2.
174
Tr. 195:16−18 (Song). A JP Morgan representative responded, summarizing her
interpretation of the mechanics of each document. JX 232. She indicated that the proxy
vested voting rights in Chen and “in a way it supersedes the voting agreement” because
Chen could “take any actions for [White Marble’s] shares” and that the voting agreement
provided only specific enforcement, so a breach might be irreversible once a vote
occurred. Id. She added that “[t]his could work in [White Marble’s] favor, except the
proxy gives [] Chen voting power over [White Marble’s] shares.” More generally, this
suggests that Song was devising a litigation strategy to liquidate White Marble’s shares.

35
6. Hou resigns from the Board.

Hou remained a director until March 8, 2023, when he resigned.175 In a

social media post, he explained his decision and criticized management’s direction

and the Company’s investigation into him.176 That month, Song circulated to

Quinn a video and an article from TuSimple China touting operational stability and

a 600-employee headcount.177 By April 3, Lu was considering delisting and

restructuring as preliminary steps to ease CFIUS pressure and potentially “giv[ing]

up B shares.”178 But Zhen, a Gunderson lawyer, pushed back, citing the risk of a

hostile takeover.179 Lu noted to Mullen that the “super voting ha[d] a sunset period,

but [in] reality . . . [Chen would] not give back [] B share[s] to [Hou].”180

On July 6, Song asked Quinn and A&B about the conversion of Class B

shares and the validity of the Irrevocable Proxy and the Voting Agreement. 181 In

late July, Hou founded Bot Auto, another company in the space of automated truck

175
Hou Dep. 53:6−14. The Company reported the resignation the next day. JX 515.
176
JX 520.
177
JX 235 at 1−2.
178
JX 237 at 1−2.
179
Id. at 2−3.
180
Id. at 7.
181
JX 239 at 1; JX 240; JX 241; JX 242. The record includes only an email with the subject
line: “[privileged and confidential] Class B stock conversion and validity of the
proxy/voting agreement.” JX 239. A&B’s response is not included in the record as
evidence because Plaintiffs withheld it on privilege grounds. Id.

36
driving.182 TuSimple’s September 7 Form 10-K reiterated that the Irrevocable

Proxy would last up to two years, and the Voting Agreement would terminate only

by mutual consent.183

In December, a representative of Innovative Legal Services (“Innovative”),

engaged by Hou, asked Gunderson to confirm their understanding that the

Irrevocable Proxy and the Voting Agreement deprived Hou and Song of any voting

power and vested voting in Chen alone.184 Chang agreed that Innovative’s reading

was consistent with Gunderson’s view.185 Innovative then demanded that the

Company retract statements to JP Morgan treating Hou as an affiliate and keeping

the trading window closed, asserting that Hou and Song had “neither voting power

nor any decision-making authorities associated with the [s]hares.”186 JP Morgan

responded that the Company still viewed Hou as an affiliate, the trading window

remained closed, and that it would not process the sell instructions.187

182
Tr. 55:15−18 (Hou); id. at 168:3−9, 169:14−16 (Song). At trial, Lu testified that Hou
had registered a company domain called “Bot Auto” in December 2022, and that Bot Auto
is “a direct competit[or], Level 4 self-driving trucks,” and that “over 40 employees that
used to work at TuSimple are now at [Bot Auto].” Tr. 325:8−14 (Lu).
183
JX 245 at 111. The same language appeared in the definitive proxy dated October 30,
2023. JX 252 at 18.
184
JX 253 at 2.
185
Id. at 1. Two days later, Chang told JP Morgan that “Chen ha[d] voted.” JX 258 at 1.
186
JX 256 at 1; JX 254 at 1. See also JX 255.
187
JX 259 at 1.

37
7. The 2024 developments

On January 17, 2024, TuSimple filed a Form 8-K announcing its intention

to voluntarily delist its common stock from Nasdaq and terminate its registration

with the SEC.188 By then, Hou and Song were already coordinating a litigation

strategy with counsel, including a “possible [V]oting [A]greement challenge.”189

In April, Lu emailed the Compensation Committee proposing a retention

package and referring to the impending end of the two-year agency arrangement

between Chen and Hou, the risk of activism, and management’s low ownership. 190

On August 22, Lu executed an amended and restated employment agreement and

a severance and change in control agreement.191

Public scrutiny intensified over the summer. On July 8, “Concerned

Shareholders” sent a letter criticizing management and raising concerns about

potential self-dealing.192 A follow-up letter arrived on July 30.193 On August 2,

Hou emailed directors Zhen Tao and Albert Schultz regarding several matters: the

188
TuSimple Holdings Inc., Form 8-K (Jan. 17, 2024); JX 262.
189
JX 265 at 3−7; JX 270 at 1.
190
JX 274 at 13. Chen instructed that there was “[n]o need to reply.” JX 274 at 12−13;
see also JX 275 at 1.
191
JX 283; JX 284; JX 285; JX 286; JX 287; JX 288.
192
JX 276.
193
JX 277; JX 278; JX 279.

38
July 8 letter, the removal of a temporary restraining order restricting transfers to

China, the $189 million federal securities class action settlement, and the Audit

Committee’s independence.194 Schultz replied on August 13 that the Board had

authorized outside counsel at Skadden, Arps, Slate, Meagher & Flom LLP to

investigate the relevant factual and legal issues.195

Around the same time, the Company announced a pivot into generative

artificial intelligence for animation and video games.196 In a September 2024 press

event, Lu and Chen unveiled an Artificial Intelligence Generated Content strategy,

dismissed negative media reports as “false lies,”197 and emphasized cost-cutting

measures, regulatory pressures, delisting, and a shift toward licensing and patent

monetization, highlighting the cash on the balance sheet and headcount

reductions.198 Chen explained that Hou’s proxy was designed to last only two years

and that it was about to expire.199 Chen suggested that Hou might be driving some

negative coverage200 and framed treasury movements across jurisdictions as lawful

194
JX 294 at 1−2.
195
Id. at 1.
196
JX 280; JX 301 at 2.
197
JX 301 at 1.
198
Id. at 6, 10−11, 13, 15; JX 303 at 9.
199
JX 301 at 16, 18.
200
Id. at 26−27.

39
corporate allocations.201 Both Chen and Lu tied the business model change to

regulatory scrutiny202 and confirmed renewed hiring in China.203 Chen also

acknowledged that TuSimple and Hydron shared personnel.204

From early September, Song advanced Hou’s strategy.205 She engaged

Okapi Partners, a provider of proxy solicitation and investor response services, and

began a board candidate search focused on turnaround and liquidation

experience.206 The Company released its definitive proxy on November 8.207 On

November 12, Hou texted Song a screenshot from the “Voting Agreement” section

highlighting the sentence “the Voting Agreement remains in effect” and

commented, “A thief is still a thief.”208 On November 13, Song emailed the proxy

services firm Broadridge Financial Solutions, Inc. about the information sharing

and security protocols to be followed for shares held by White Marble to limit

201
Id. at 33; JX 303 at 40−41.
202
JX 301 at 11, 38; JX 303 at 45.
203
JX 301 at 9.
204
Id. at 5.
205
JX 292; JX 299.
206
JX 295; JX 296 (forwarding an email titled “proxy address attempted theft”); JX 297 at
1; JX 298 (attaching the shareholder July 30, 2024 letter).
207
JX 309.
208
JX 311 at 3.

40
Chen, Gunderson, and Skadden’s involvement in the proxy process. 209 On

November 15, Hou wrote to counsel: “I have some ideas against Sina. Let’s chat

tonight.”210 On November 25, Hou sent a letter to the Board, blaming Chen and

Lu for the 91% stock price collapse and the unapproved business model change. 211

The letter further referred to Hou’s legal actions to restore his voting rights and

urged liquidation with pro rata distribution.212

C. Procedural History

Hou, through White Marble, filed a verified complaint for declaratory

judgment (the “Complaint”) on November 22, 2024, along with a motion to

expedite proceedings and a motion for a temporary restraining order.213 The

Complaint named both the Company and Chen as defendants.214 On December 13,

2024, the court entered a status quo order (the “Status Quo Order”). 215 The Status

Quo Order allowed the 2024 annual meeting to proceed but restricted the

209
JX 314 at 1. The email stated, in part: “No third party—including TuSimple’s legal
team, shareholder, proxy holders, Mo Chen, his attorney Richard Chang . . .— has
authorization to access or manage the proxy info of White Marble LLC and White
Marble International.”
210
JX 315 at 3.
211
JX 321; JX 322.
212
JX 321 at 3.
213
Dkt. 1 (“Compl.”).
214
Id. at 1, ¶¶ 15−16.
215
Dkt. 26.

41
Defendant and the Company from taking major corporate actions without approval,

and suspended voting of the disputed shares outside the meeting until the court’s

determination of who controls the shares at issue.216

On January 6, 2025, White Marble filed a first amended verified complaint

for declaratory judgment (the “Amended Complaint”), which is the operative

complaint.217 The Amended Complaint no longer names the Company as a party

to these proceedings. The Amended Complaint asserts two counts.218 The parties

agreed to expedited proceedings with respect to Count I.219 The Plaintiffs seek a

declaratory judgment that White Marble is entitled to vote its shares in the

Company and Chen has no rights to vote those shares, that the parties’ voting

arrangement expired on November 9, 2024, or that the agreement is invalid and

unenforceable. Count II asserts a claim for breach of fiduciary duty against Chen.

On January 21, 2025, Chen moved to dismiss Count II of the Amended

Complaint.220 Count II of the Amended Complaint is not the subject of these

expedited proceedings.

216
Dkt. 26.
217
Dkt. 34 (“Am. Compl.”).
218
See id. ¶¶ 144−221.
219
Dkt. 41.
220
Dkt. 40.

42
The court held a two-day trial, followed by post-trial briefing and

argument.221

II. ANALYSIS
A. Legal Standard

The Declaratory Judgment Act authorizes Delaware courts to “declare rights,

status and other legal relations whether or not further relief is or could be claimed.”

10 Del. C. § 6501. A party “may have determined any question of construction or

validity arising under [a] contract . . . and obtain a declaration of rights, status or

other legal relations thereunder.” Id. § 6502.

As a general rule, “the plaintiff has the burden of proof in a declaratory

judgment action.” Policemen’s Annuity & Benefit Fund of Chicago v. DV Realty

Advisors LLC, 2012 WL 3548206, at *11 (Del. Ch. Aug. 16, 2012), aff’d, 75 A.3d

101 (Del. 2013). Plaintiffs must satisfy their “burden of proving each

element . . . of each of their causes of action against [the] Defendant by a

preponderance of the evidence.” OptimisCorp v. Waite, 2015 WL 5147038, at *55

(Del. Ch. Aug. 26, 2015), aff’d, 137 A.3d 970 (Del. 2016). “Proof by a

preponderance of the evidence means proof that something is more likely than not.

It means that certain evidence, when compared to the evidence opposed to it, has the

221
Dkts. 176−177, 179, 194, 196.

43
more convincing force and makes you believe that something is more likely true

than not.” Id. (citation modified).

B. Contract Avoidance

Plaintiffs assert a cornucopia of arguments to avoid the Voting Agreement.

They include: failure of contract formation, mistake, fraudulent inducement, and

ethical violations of counsel.222 And if all of those arguments fail, Plaintiffs contend

the Voting Agreement must be interpreted as terminating after two years.

1. Contract formation
“[A] valid contract exists when (1) the parties intended that the contract

would bind them, (2) the terms of the contract are sufficiently definite, and (3) the

parties exchange legal consideration.” Osborn ex rel. Osborn v. Kemp, 991 A.2d

1153, 1158 (Del. 2010). Whether the parties intended to be bound is determined

objectively. See Eagle Force Hldgs., LLC v. Campbell, 187 A.3d 1209, 1229–30

& n.144 (Del. 2018). “[W]here the putative contract is in the form of a signed

writing, that document generally offers the most powerful and persuasive evidence

of the parties’ intent to be bound.” Id. at 1230.

As to this element, “[c]onsideration requires that each party to a contract

convey a benefit or incur a legal detriment, such that the exchange is ‘bargained

222
Pls.’ Opening Br. 26−53; Pls.’ Reply Br. 11−31.

44
for.’” Cox Commc’ns, Inc. v. T-Mobile US, Inc., 273 A.3d 752, 764 (Del. 2022)

(citing E.I. DuPont de Nemours and Co. v. Pressman, 679 A.2d 436, 446 (Del.

1996)). “Contracting is a bargained-for exchange.” Pressman, 679 A.2d at 446; see

also Restatement (Second) of Contracts § 71(1) (1981) (“To constitute

consideration, a performance or a return promise must be bargained for.”). “If the

requirement of consideration is met, there is no additional requirement of [] a gain,

advantage, or benefit to the promisor or a loss, disadvantage, or detriment to the

promisee.” Restatement (Second) of Contracts § 79(a). A single bargained-for

performance or promise may furnish consideration for multiple promises in return.

See 3 Williston on Contracts § 7:54 (4th ed.); see also Restatement (Second) of

Contracts § 80 & cmt. a (“Since consideration is not required to be adequate in

value . . ., two or more promises may be binding even though made for the price of

one. A single performance or return promise may thus furnish consideration for

any number of promises.”).

a. The Voting Agreement is supported by consideration.

Plaintiffs contend that, if the Voting Agreement stands on its own, it lacks

consideration and mutuality.223 They characterize the actual trade as the removal of

223
Pls.’ Opening Br. 35−36; Pls.’ Reply Br. 22.

45
the Board and a pathway for Hou’s return as CTO.224 Plaintiffs also suggest that

Chen “gained nothing,” urging the court to treat adequacy as part of the inquiry.

Those arguments fail.

At the time of contracting, the parties acknowledged that the Voting

Agreement was supported by consideration.225 Although that recital is not outcome-

determinative, it “facially supports a finding that the agreement is supported by

consideration, absent facts suggesting that no such consideration was actually given

or expected.” Moscowitz v. Theory Ent. LLC, 2020 WL 6304899, at *12 (Del. Ch.

Oct. 28, 2020); see Restatement (Second) of Contracts § 87 cmt. c (“A recital in a

written agreement that a stated consideration has been given is evidence of that fact

as against a party to the agreement, but such a recital may ordinarily be contradicted

by evidence that no such consideration was given or expected.”); id. § 218 cmt. b

(“A recital of fact in an integrated agreement is evidence of the fact, and its weight

depends on the circumstances. Contrary facts may be prove[n].”); id. § 218 cmt. e

(“Where consideration is required, the requirement is not satisfied by a false recital

224
Pls.’ Opening Br. 31; Pls.’ Reply Br. 22−23.
225
JX 169 at 1 (“In consideration of the mutual promises and covenants set forth herein,
and certain other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged.”).

46
of consideration, although in some circumstances a recital of consideration may

make a promise binding without consideration.”).

The Voting Agreement is supported by consideration. A stockholder’s

promise to surrender discretionary voting and “vote[] as directed by the offeror” is

itself valid consideration “personal to the stockholder.” Schreiber v. Carney,

447 A.2d 17, 23 (Del. Ch. 1982); see also id. at 25 (describing Delaware’s

approach to voting agreements as liberal). That is precisely what the Voting

Agreement does. Governance agreements are about allocating control, and

consideration is inherent in that allocation. “[V]oting agreement[s] [are] supported

by consideration personal to the stockholder, whereby the stockholder divorces his

discretionary voting power and votes as directed by the offeror.” Id. at 23.

Stockholder agreements allow parties to “allocate control rights directly by

contract,” thereby enabling control sharing that would otherwise be difficult to

achieve. Gabriel Rauterberg, The Separation of Voting and Control: The Role of

Contract in Corporate Governance, 38 Yale J. Reg. 1124, 1140 (2021); id. at 1144

(“[O]ne reason that parties value the ability to contract over their votes [is that] it

facilitates shareholders’ ability to share control in ways that would otherwise be

difficult to achieve.”); see also Rohe v. Reliance Training Network, Inc., 2000 WL

1038190, at *16 n.49 (Del. Ch. July 21, 2000) (“[S]tockholders can bind

47
themselves contractually in a stockholders agreement in a manner that cannot be

permissibly accomplished through a certificate of incorporation.”).

Plaintiffs’ contention that Chen gained nothing from the Voting Agreement is

a quibble over the adequacy of consideration, not its existence. Adequacy of the

consideration is irrelevant. Once there is a bargained-for exchange, courts do not

police adequacy of consideration. Restatement (Second) of Contracts § 79;

see Osborn, 991 A.2d at 1159 (“[W]e limit our inquiry into consideration to its

existence and not whether it is fair or adequate. Mere inadequacy of consideration,

in the absence of any unfairness or overreaching, does not justify a denial

of . . . specific performance where in other respects the contract conforms with the

rules and principles of equity.”) (citation modified).

The same bargained-for exchange can support multiple contemporaneous

promises. See Restatement (Second) of Contracts § 80. “[A]ll writings that are part

of the same transaction are interpreted together.” Id. § 202(2); accord Fla. Chem.

Co., LLC v. Flotek Indus., Inc., 262 A.3d 1066, 1081 (Del. Ch. 2021)

(“‘[C]ontemporaneous contracts between the same parties concerning the same

subject matter should be read together as one contract.’”) (quoting Comerica Bank

v. Glob. Payments Direct, 2014 WL 3567610, at *7 (Del. Ch. July 21, 2014)).

Here, the contemporaneous exchange transferred immediate voting control to Chen

(via the Irrevocable Proxy) and bound Plaintiffs to vote as Chen directs in ongoing

48
corporate affairs (via the Voting Agreement). The same negotiated governance

trade, i.e., centralized voting control, supports both instruments.

Plaintiffs’ arguments are premised upon the notion that the Voting Agreement

is superfluous. The Irrevocable Proxy gave Chen the right to vote Hou’s shares for

two years. According to Plaintiffs, the Voting Agreement gave Chen the lesser right

to require Hou to vote as Chen directed for the same two-year period. Were that so,

then there would be no need for a Voting Agreement of the same duration.

Plaintiffs’ theory then begs the question: Why did Hou, who was being

advised by at least three law firms that reviewed the documents, sign a meaningless

Voting Agreement? Neither Hou nor Plaintiffs have a persuasive explanation. The

Voting Agreement reflects an objective intent to be bound, contains sufficiently

definite obligations, and is supported by consideration. Therefore, the court will

proceed to interpret the fully executed writings under Delaware’s objective

approach.

b. Meeting of the minds

“[I]n the making of a contract . . . there must be a meeting of the minds of

the parties.” Josloff v. Falbourn, 125 A. 349, 350 (Del. 1924); see also Eagle

Force, 187 A.3d at 1212 (“there must be a ‘meeting of the minds’ that there is a

contract supported by consideration.”). Delaware determines assent objectively.

See Restanca, LLC v. House of Lithium, Ltd., 2023 WL 4306074, at *18 (Del. Ch.

49
June 30, 2023), (“Under Delaware law, ‘overt manifestation of assent—not

subjective intent—controls the formation of a contract.’”) (quoting Black Horse

Cap., LP v. Xstelos Hldgs., Inc., 2014 WL 5025926, at *12 (Del. Ch. Sept. 30,

2014), aff’d, 328 A.3d 328 (Del. 2024). Where the alleged contract is a signed

writing, “that document generally offers the most powerful and persuasive

evidence of the parties’ intent to be bound.” Eagle Force, 187 A.3d at 1230.

Indefiniteness defeats contract formation only if the “terms in an agreement are so

vague that a court cannot determine the existence of a breach” or fashion a remedy.

Cont’l Ins. Co. v. Rutledge & Co., Inc., 750 A.2d 1219, 1230 (Del. Ch. 2000) (citing

Haft v. Dart Grp. Corp., 877 F.Supp. 896, 906 (D. Del. 1995)); see Indep. Cellular

Tel., Inc. v. Barker, 1997 WL 153816, at *4 (Del. Ch. Mar. 21, 1997); Litle v.

Waters, 1992 WL 25758, at *6 (Del. Ch. Feb. 11, 1992) (each citing Restatement

(Second) of Contracts § 33(2)). A “misunderstanding” negates assent only “if the

parties attach[ed] materially different meanings to their manifestations and []

neither party kn[ew] or ha[d] reason to know the meaning attached by the other;”

otherwise, the agreement is given the meaning of the party whose understanding

was known or should have been known. Restatement (Second) of Contracts §§

20(1)(a), 20(2)(b).

50
Plaintiffs argue that there was no mutual assent because Hou intended to grant

voting authority for only two years.226 They invoke Kotler v. Shipman Associates,

LLC, 2019 WL 4025634 (Del. Ch. Aug. 21, 2019), arguing that the parties never

agreed to the same terms. Kotler involved competing versions of a warrant

negotiated amid a “haphazard” exchange of drafts, with parties’ signature pages not

attached to a single, common document. There, the court concluded that there was

no objective manifestation that both sides assented to the same material terms, such

as the scope and the duration of a non-compete provision. Id. at *16–18. The present

case is distinguishable.

Objective manifestations of intent are controlling. Both the Irrevocable Proxy

and the Voting Agreement are complete, unambiguous writings.227 Plaintiffs have

offered no contemporaneous document that supports a two-year term for the Voting

Agreement. They point to informal statements (e.g., post-signing text messages or

statements Chen made at the September 2024 press conference), but they refer only

to the Irrevocable Proxy and not to the Voting Agreement. These informal

statements cannot vary clear contractual language that Plaintiffs received, reviewed,

226
Pls.’ Opening Br. 40; Pls.’ Reply Br. 25. See also Pls.’ Opening Br. 50−51 (advancing
the theory that Chen’s story is implausible and is a litigation-invented position not
supported by contemporaneous evidence).
227
Def.’s Answering Br. 35−36, 40−41.

51
and executed without objection.228 To be sure, Hou’s video memorializing the

additions or revisions to the documents that he signed on November 9, 2022, made

no mention of the Voting Agreement—a separate document that he had just signed.

Had Hou intended the Voting Agreement to be limited to something other than what

its unambiguous terms provide, he surely would have said so in the video.

The parties executed a single Voting Agreement, which contains an

unambiguous termination clause requiring mutual agreement. This case is the

opposite of Kotler, where the plaintiff failed to prove the existence of a contract

because the parties never assented to the same version of a warrant agreement amid

a “haphazard” exchange of drafts. Id. at *1. Here, there is one signed Voting

Agreement; the Plaintiffs identify no competing executed version, no redlined

document inserting a two-year limit, and no term sheet or email that includes a two-

year term in that contract. Plaintiffs’ reliance on a post-signing “Proxy Voting

Agreement” label in Chen’s November 15 Schedule 13D, which specified that the

description did “not purport to be complete” and referred the reader to “the complete

text” of the attached Voting Agreement and Irrevocable Proxy,229 and on post-

signing statements cannot vary an unambiguous writing. See Coates v. Netro Corp.,

228
Id. at 37−40.
229
JX 198 at 8, Item 3.

52
2002 WL 31112340, *4 (Del. Ch. Sept. 11, 2002) (holding that a proxy statement

discussion of the terms of a certificate and bylaws was not misleading where the

discussions “were qualified in their entirety by reference to the attached

documents”); see GMG Cap. Invs., LLC v. Athenian Venture P’rs I, L.P., 36 A.3d

776, 783 (Del. 2012) (reaffirming Delaware’s objective theory and parol evidence

rule, which provide that clear, unambiguous contract terms control and cannot be

contradicted by extrinsic evidence).

The only instrument that objectively carries the two-year limit is the

Irrevocable Proxy. The November 9 video identifies that document by title. Nothing

shows that Chen knew or had reason to know that Plaintiffs attached a different

meaning to the Voting Agreement’s termination clause.

The parties manifested assent to the same Voting Agreement. The terms of

the Voting Agreement are definite, and no contrary executed text imposes a two-

year limit on that instrument. Therefore, the court concludes that there was a

meeting of the minds on the Voting Agreement, and a contract was formed.

c. Mistake

Plaintiffs seek reformation of the Voting Agreement based on a mutual or

unilateral mistake as to its duration. These arguments fail for the same reasons as

Plaintiffs’ “lack of consideration” and “no meeting of the minds” arguments failed.

53
Reformation is an equitable remedy that permits a court of equity to modify a

written instrument so it reflects the parties’ actual agreement when, because of fraud

or mistake, the writing does not express their actual intent. “It is settled law that the

equitable remedy of reformation may be used to express the ‘real agreement’ of the

parties involved.” Libeau v. Fox, 892 A.2d 1068, 1072 (Del. 2006) (citation

modified). The party seeking reformation must demonstrate that the writing fails to

accurately capture the parties’ actual intent due to fraud, mutual mistake, or

unilateral mistake coupled with the other party’s knowing silence. “The Courts of

this State have always insisted in reformation cases on a showing of mutual mistake

or, in appropriate cases, unilateral mistake on plaintiff’s part coupled with knowing

silence on defendant’s part.” Collins v. Burke, 418 A.2d 999, 1002 (Del. 1980); see

also 2 Donald J. Wolfe, Jr. & Michael A. Pittenger, Corporate and Commercial

Practice in the Delaware Court of Chancery § 16.05 (2024).

To obtain reformation based on mutual mistake, Plaintiffs must prove by clear

and convincing evidence that: (i) before execution, the parties reached a specific

prior understanding on a material term, (ii) the written instrument failed to reflect

that understanding because of a mistake, and (iii) the requested reformation would

make the writing conform to that prior understanding. Cerberus Int’l, Ltd. v. Apollo

Mgmt., L.P., 794 A.2d 1141, 1151–52 (Del. 2002). The clear and convincing

evidence standard “‘preserve[s] the integrity of written agreements by making it

54
difficult to modify executed contracts.’” Glidepath Ltd. v. Beumer Corp.,

2018 WL 2670724, at *10 (Del. Ch. June 4, 2018) (quoting In re TIBCO Software

Inc. S’holders Litig., 2015 WL 6155894, at *13 (Del. Ch. Oct. 20, 2015)); see Off.

Comm. of Unsecured Creds. of Motors Liquid. Co. v. JPMorgan Chase Bank, N.A.,

103 A.3d 1010, 1015–16 (Del. 2014) (“As a matter of ordinary course, parties who

sign contracts and other binding documents, or authorize someone else to execute

those documents on their behalf, are bound by the obligations that those documents

contain.”).

i. Mutual mistake

“To establish a mutual mistake of fact, the plaintiff must show by clear and

convincing evidence that (1) both parties were mistaken as to a basic assumption,

(2) the mistake materially affects the agreed-upon exchange of performances, and

(3) the party adversely affected did not assume the risk of the mistake.” Hicks v.

Sparks, 89 A.3d 476, 2014 WL 1233698, at *2 (Del. Mar. 25, 2014) (TABLE).

Plaintiffs contend that if Chen “always intended” a perpetual Voting

Agreement while Hou intended a two-year duration, then both sides were mutually

mistaken. Plaintiffs rely on the November 9 video, Gunderson’s drafting, and the

Schedule 13D’s reference to a “Proxy Voting Agreement.”230 But Plaintiffs have

230
Pls.’ Opening Br. 43–44; Pls.’ Reply Br. 26–27.

55
not identified a single document supporting the conclusion that the pre-execution

agreement specifically placed a two-year limit in the Voting Agreement. References

to “proxy” in conversation do not establish a prior meeting of the minds to insert a

two-year term into a different agreement with its own signature page and distinct

termination provision. See Fortis Advisors LLC v. Johnson & Johnson, 2021 WL

5893997, at *19 (Del. Ch. Dec. 13, 2021) (“specific meeting of the minds regarding

a term that was not accurately reflected in the final, written agreement must be

shown”) (citation modified).

Plaintiffs point to the descriptive language included in Chen’s November 15,

2022, Schedule 13D, which referred to a “Proxy Voting Agreement” with a two-year

duration. They then cite Metro Communication Corp. BVI v. Advanced Mobilecomm

Technologies Inc., 854 A.2d 121 (Del. Ch. 2004), for the proposition that “Delaware

law has long recognized that misleading partial disclosure can give rise to liability

for the speaker where the same party could not be liable had he simply remained

silent.”231 See id. at 130. But Plaintiffs’ reliance on Metro Communication is

misplaced. Metro Communication addressed common-law fraud by nondisclosure

at the pleadings stage and turned on whether omitted facts rendered separate

statements misleading. It did not authorize rewriting an otherwise clear, executed

231
Pls.’ Reply Br. 28.

56
contract. Here, Chen’s Schedule 13D was filed six days after execution of the

Voting Agreement. It also expressly directed readers to the attached agreements for

their specific terms. Plaintiffs and their sophisticated counsel received drafts of the

Voting Agreement before signing the fully executed versions on the day of signing,

studied and discussed their implications, and raised no issues. 232 That course of

performance is inconsistent with a shared, pre-execution understanding that the

Voting Agreement would expire in two years. See Glidepath, 2018 WL 2670724, at

*11–12 (noting that the clear and convincing standard guards against post hoc

attempts to modify executed writings).

Plaintiffs also assert that Gunderson mistakenly omitted a two-year limit from

the Voting Agreement and that Chen seeks to capitalize on the error. But Plaintiffs’

own lawyers—not just one lawyer, but multiple lawyers from some of the most

preeminent firms on planet earth233—received the drafts and the final signed

agreements. None of them registered any concern that the express terms of the

Voting Agreement were not what the parties intended. The Voting Agreement’s

termination clause is short, prominent, and unambiguously states that termination

requires mutual agreement. If a two-year sunset on the Voting Agreement were an

232
Tr. 166:16−167:1 (Song); JX 222 at 2.
233
This includes one firm that boasts of being the “most feared firm in the world.” JX 86
at 2; JX 115; JX 408.

57
agreed, material term, Plaintiffs’ army of sophisticated lawyers would be expected

to notice and address its absence before or at the time Hou signed it. See Scion

Breckenridge Managing Member, LLC v. ASB Allegiance Real Estate Fund, 68 A.3d

665, 676–79 (Del. 2013) (recognizing reformation for scrivener’s error or unilateral

mistake with knowing silence but still requiring clear and convincing proof of the

prior term and inequitable conduct).

Therefore, Plaintiffs have not proved by clear and convincing evidence a

specific, pre-execution agreement to impose a two-year limit on the Voting

Agreement that the executed writing failed to memorialize. The request for

reformation on grounds of mutual mistake is denied.

ii. Unilateral mistake

To obtain reformation based on a unilateral mistake, the party seeking

reformation must prove both “that it was mistaken and that the other party knew of

the mistake but remained silent.” Glidepath, 2018 WL 2670724, at *12 (quoting

Scion, 68 A.3d at 678). This argument fails for the same reasons as Plaintiffs’ claim

of mutual mistake.

Plaintiffs contend that Hou was mistaken in believing that the Voting

Agreement carried a two-year limit, again relying upon the November 9 video and

the November 15, 2022 Schedule 13D’s “Proxy Voting Agreement” description.

58
They further assert that Chen knew or had reason to know of that mistake but said

nothing.234

Plaintiffs did not prove unilateral mistake. The two-year term of the

Irrevocable Proxy does not show Chen’s awareness that Plaintiffs believed the

Voting Agreement’s termination clause was subject to the same term. Hou and his

counsel received the documents on the execution date that unequivocally stated that

the Voting Agreement would terminate upon the agreement of the parties, not before.

Hou and his lawyers reviewed and discussed the Voting Agreement that day and

never raised an issue then or at any time before filing this action nearly two years

later. The Voting Agreement was publicly filed with the SEC and specified that any

description of the Voting Agreement and Irrevocable Proxy was qualified by the

terms of the two documents. Those facts undercut any suggestion that Defendant

knew Plaintiffs labored under a contrary understanding yet stayed silent.

Plaintiffs have not shown by clear and convincing evidence that Chen knew

that Hou mistakenly believed that the Voting Agreement would terminate in two

years and remained silent. Reformation for unilateral mistake is therefore denied.

d. Fraudulent inducement

The elements of fraudulent inducement are:

234
Pls.’ Opening Br. 45–46; Pls.’ Reply Br. 28.

59
(1) a false statement or misrepresentation, usually one of fact, made by
the defendant; (2) that the defendant knew was false or made with
reckless indifference to the truth; (3) the statement was intended to
induce the plaintiff to act or refrain from acting; (4) the plaintiff’s action
or inaction was taken in justifiable reliance upon the representation; and
(5) the plaintiff was injured as a result of the reliance.

Restanca, 2023 WL 4306074, at *25. A party seeking to prove fraudulent

inducement must do so by a preponderance of the evidence. See Stone & Paper

Invs., LLC v. Blanch, 2021 WL 3240373, at *26 (Del. Ch. July 30, 2021),

aff’d, 312 A.3d 1155 (Del. 2024), and aff’d sub nom. Skinner v. Stone & Paper Invs.,

LLC, 319 A.3d 270 (Del. 2024) (TABLE).

Plaintiffs contend Chen, through Lu and Alice, fraudulently induced Hou to

sign the Voting Agreement after representing that the November 9 video “would

address” the two-year issue, and that Hou would not have signed but for those

representations.235

Plaintiffs have not carried their burden. First, the record does not identify an

affirmative statement that the Voting Agreement would terminate in two years.

Plaintiffs point to generalized assurances that the “video would address” the two-

year issue. But the video discusses the “Irrevocable Proxy and Power of Attorney,”

which is the only instrument that objectively carries a two-year limit. It makes no

mention of the Voting Agreement. Plaintiffs also cannot support their fraudulent

235
Pls.’ Opening Br. 47–48.

60
inducement claim with the description of the “Proxy Voting Agreement” in the

Schedule 13D. As explained above, the Schedule 13D post-dates the execution of

the Voting Agreement by six days and is qualified by the terms of the two

agreements that were attached to the filing.

Second, scienter was not shown. Plaintiffs’ theory posits that Chen knew the

Voting Agreement was perpetual yet fostered a contrary impression. The drafting

record, however, indicates that counsel focused on placing the two-year limit in the

Irrevocable Proxy rather than in the Voting Agreement, as reflected in the executed

papers.236 That course is inconsistent with an intent to mislead about the Voting

Agreement’s duration. Plaintiffs cite no communication in which Chen, Alice, or

Lu told Hou that the Voting Agreement itself would sunset in two years.

Third, justifiable reliance is lacking. Plaintiffs and their sophisticated counsel

received the fully executed agreements on the day of signing; the Voting

Agreement’s termination clause is short and explicit, i.e., termination occurs “by

mutual agreement.” Plaintiffs raised no contemporaneous objection after receiving

the signed documents. On these facts, reliance on an asserted, extra-textual two-

year limit for the Voting Agreement—contrary to the plain termination language—

was not justifiable. See Restanca, 2023 WL 4306074, at *25 (requiring justifiable

236
JX 164; JX 165; JX 169; JX 173; JX 174; JX 212; JX 213.

61
reliance). The same conclusion follows even if one credits Hou’s deposition

testimony at face value: there is no documentary support tying any pre-signing

statement to the Voting Agreement’s term, and the executed text was available for

review.

Plaintiffs failed to prove a materially false statement about the Voting

Agreement’s term, scienter, or justifiable reliance. Therefore, the fraudulent

inducement claim fails. The drafting and execution record instead shows that the

two-year limit was implemented in the Irrevocable Proxy (as counsel worked to do),

and the Voting Agreement bears an entirely different termination clause based on

the mutual agreement.237

e. Gunderson’s alleged ethical violations

Plaintiffs advance a separate theory to challenge the contract’s validity based

on Gunderson’s conduct. They argue that the Voting Agreement is void, voidable,

or subject to reformation to a two-year term because of Gunderson’s alleged

unethical behavior.238 They contend that Gunderson’s conduct was central to the

origination of this litigation and that Delaware courts should not condone it. Their

specific allegation is that Gunderson engaged with a represented party without the

237
JX 164.
238
Pls.’ Opening Br. 51−54.

62
consent or presence of Hou’s attorney, in violation of professional responsibility

rules in both California and Delaware.239

This contention focuses on Alice’s presence at Hou’s residence on

November 9, a failure to contact Quinn, continued communications about legal

issues with Hou, and the failure to involve Quinn when changing the date and officer

designations as the core of the complained-of conduct.240 They also argue that

Gunderson changed the description in its invoices to conceal work performed for

Chen personally.241

This late-blooming, made-for-litigation construct is unconvincing. Hou’s

attorneys understood the events of November 9 and raised no complaints. They

reviewed all of the documents and identified no issues at the time of execution, after

they were publicly filed, or before this litigation. Hou and his lawyers held a call on

the evening of November 9 with Chen’s lawyers at Gunderson and never mentioned

any concern about a Gunderson lawyer or Lu being present at Hou’s home.

239
Id. at 52 (citing Rule 4.2 of the Delaware Lawyers’ Rules of Professional Conduct (“In
representing a client, a lawyer shall not communicate about the subject of the
representation with a person the lawyer knows to be represented by another lawyer in the
matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by
law or a court order.”) and its California equivalent, California Rule of Professional
Conduct 4.2).
240
Pls.’ Opening Br. 52.
241
Id. at 53; JX 204; JX 332.

63
Plaintiffs rely on In re Fuqua Industries, Inc. Shareholder Litigation, 2006

WL 2640967, at *8 (Del. Ch. Sept. 7, 2006), aff’d sub nom. Abrams v. Sachnoff &

Weaver, Ltd., 922 A.2d 414 (Del. 2007) (TABLE), and Sheppard, Mullin, Richter &

Hampton, LLP v. J-M Manufacturing Company, Inc., 425 P.3d 1, 28 (Cal. 2018), to

support reformation of the Voting Agreement or a declaration that it is unenforceable

based upon an ethical violation. Fuqua Industries involved an entirely different

scenario regarding an undisclosed fee-sharing arrangement between class counsel

and a class representative. The court held that such an arrangement, undisclosed to

the class and the court, was unethical and unenforceable because it struck at the

structural safeguards of representative litigation. Id. at *8–9. Fuqua Industries does

not carry Plaintiffs’ burden here. There, the offensive agreement was itself the

instrument between the lawyer and the client. See id. at *1, 7–8. Here, Plaintiffs

ask the court to set aside or rewrite agreements between nonlawyers based on alleged

violations of the rule barring counsel’s contacts with a represented party during fast-

moving events. A violation of Rule 4.2 of the Delaware Lawyers’ Rules of

Professional Conduct does not, standing alone, void an otherwise lawful agreement

executed by a sophisticated party who, as the record shows, constrained his

attorneys’ representation.

Sheppard is similarly inapposite. There, the law firm agreed to represent a

client in a federal qui tam action while concurrently representing the client’s

64
adversary in unrelated matters, without obtaining the client’s informed written

consent to waive the conflict. After the conflict was discovered and the law firm

was disqualified from representing the client, the firm sued the client for unpaid fees

and sought to compel arbitration under the engagement agreement. The arbitrator

ruled in favor of the law firm, and the trial court confirmed the award. Sheppard,

425 P.3d at 5. The appeals court reversed, holding that the entire agreement was

unenforceable because it violated the rules of professional conduct. Sheppard,

Mullin, Richter & Hampton, LLP. v. J-M Mfg. Co., Inc., 198 Cal. Rptr. 3d 253, 265–

269 (Cal. Ct. App. 2016) as modified on denial of reh’g (Feb. 26, 2016), review

granted and opinion superseded sub nom., Sheppard, Mullin, Richter & Hampton v.

J-M Mfg., 368 P.3d 922 (Cal. 2016), and aff’d in part, rev’d in part, 425 P.3d 1 (Cal.

2018). The California Supreme Court affirmed in part and reversed in part, holding

that “the undisclosed conflict . . . render[ed] the engagement agreement

unenforceable in its entirety.” Sheppard, 425 P.3d at 28. Like Fuqua Industries, the

alleged ethical breach in Sheppard involved an undisclosed concurrent conflict,

which is a violation of ethical rules governing the attorney-client relationship and

against public policy. The allegations that Plaintiffs raise here do not implicate an

undisclosed conflict and do not go to the essence of the attorney-client relationship.

More generally, any effort to convert alleged violations of the Delaware

Lawyers’ Rules of Professional Conduct or the California Rules of Professional

65
Conduct into claims, defenses, or sanctions in this action is misplaced. The

Delaware Supreme Court has held that “[t]he Rules are to be enforced by a

disciplinary agency, and are not to be subverted as procedural weapons,” and that

“[a]bsent misconduct which taints the proceeding, thereby obstructing the orderly

administration of justice, there is no independent right of counsel to challenge

another lawyer’s alleged breach of the Rules outside of a disciplinary proceeding.”

Appeal of Infotechnology, Inc., 582 A.2d 215, 220−21 (Del. 1990); see also

Crumplar v. Superior Ct. ex rel. New Castle Cnty., 56 A.3d 1000, 1009 (Del. 2012)

(“If a trial judge believes an attorney has committed misconduct, referral to the

Office of Disciplinary Counsel . . . is the proper recourse in the absence of

prejudicial disruption of the proceeding.”).

Plaintiffs fail to make a showing of the elements required for reformation.

They have not demonstrated that counsel obtained a signature by bypassing Hou’s

counsel in a way that tainted consent, or that any communication caused a

misrepresentation, duress, or undue influence. Their inference from the redactions

in Alice’s messages is speculative. So is Plaintiffs’ inference from the invoices.

Nothing in the record establishes that the agreement memorializes an unethical

client-lawyer bargain. And contemporaneous facts cut the other way: Hou had

counsel; those lawyers were aware of the sequence of events; and Plaintiffs reviewed

the documents without raising any objections. Even crediting Plaintiffs’

66
characterizations, the asserted violations do not supply a basis to void, reform, or

time-limit the Voting Agreement. Accordingly, the court concludes that Plaintiffs

have not met their evidentiary burden to succeed on this account.

2. Contract interpretation
Having dispensed with Plaintiffs’ challenges to the existence and

enforceability of the Voting Agreement, the court now turns to the meaning of that

agreement. “Delaware adheres to the ‘objective’ theory of contracts, i.e., a contract’s

construction should be that which would be understood by an objective, reasonable

third party.” Osborn, 991 A.2d at 1159 (Del. 2010). “When interpreting a contract,

the Court will give priority to the parties’ intentions as reflected in the four corners

of the agreement.” GMG, 36 A.3d at 779.

[W] here [contractual] language at issue is clear and unambiguous. . .,
the parol evidence rule bars the admission of evidence from outside
the contract’s four corners to vary or contradict that unambiguous
language. But, where reasonable minds could differ as to the contracts
meaning, a factual dispute results and the fact-finder must consider
admissible extrinsic evidence.

Id. at 783; see also Salamone v. Gorman, 106 A.3d 354, 368 (Del. 2014) (holding

that extrinsic evidence is used only if ambiguity exists).

67
a. The Irrevocable Proxy and the Voting Agreement are
two separate documents

The terms of the Voting Agreement reflect the best evidence of a shared

bargain. Eagle Force, 187 A.3d at 1230. Those terms are unambiguous.242 The

duration of the Voting Agreement is not tied to the Proxy Agreement. Plaintiffs

contend that the parties reached a unitary agreement in principle whose terms were

memorialized across multiple writings and unwritten aspects, and that the writings

were not fully integrated.243 In their view, the absence of an integration clause or

anti-reliance provision confirms the writings were not meant to be complete, and

the Voting Agreement “never was meant to stand alone.”244 They add that the

business context makes a unitary reading the only plausible one and that

Defendant’s construction yields an “absurd” result because the Irrevocable Proxy’s

exclusivity clause explicitly prohibits entering into a voting agreement.245 They

ask the court to consider the November 9 video and other extrinsic material as proof

242
Post-Trial Arg. Tr. 46:16–18, 47:2–4.
243
Pls.’ Opening Br. 26.
244
Id. at 26−27; Pls.’ Reply Br. 15−17. At trial, Song testified that when the JP Morgan
representative emailed her on January 24, 2023, she understood that the Irrevocable Proxy
and the Voting Agreement were two separate agreements. Tr. 167:2−6 (Song).
245
Pls.’ Reply Br. 16−17; JX 212 at 2 (“Other than this irrevocable proxy and power of
attorney, neither [of the White Marble’s entities] shall . . . enter into a voting agreement or
other similar understanding or arrangement with respect to the Subject Shares.”).

68
that the writings were not the entire deal and that “proxy” was used loosely to refer

to the whole arrangement.246 Plaintiffs’ arguments are without merit.

The Irrevocable Proxy and the Voting Agreement are distinct documents.

The Irrevocable Proxy confers proxy rights for two years; the Voting Agreement

is a contractual commitment to vote as directed thereafter on corporate affairs and

dispositions.

The Plaintiffs’ claim that there is no evidence differentiating the instruments

is belied by the documents themselves: different titles, separate signature pages,

distinct termination clauses, and provisions found in one but not the other (i.e., the

transfer mechanics only in the Irrevocable Proxy; specific performance only in the

Voting Agreement). Subjective understandings cannot override objective

manifestations. The executed writings control. The Irrevocable Proxy terminates

on the earlier of two years from execution or mutual written termination. By

contrast, the Voting Agreement terminates only by mutual agreement. This ends

the inquiry. “Contract terms themselves will be controlling when they establish the

parties’ common meaning so that a reasonable person in the position of either party

would have no expectations inconsistent with the contract language.” Eagle

Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232 (Del. 1997). The

246
Pls.’ Opening Br. 29, 31−35; Pls.’ Reply Br. 15, 27; Post-Trial Arg. at 16:9−12.

69
Irrevocable Proxy and Power of Attorney and the Voting Agreement, and their

respective termination clauses, are each clear and unambiguous.247

3. Breach of agreement due to failed reinstatement in the CTO
position

Plaintiffs contend Defendant promised to reinstate Hou as CTO upon

completion of an internal investigation and to change a draft board resolution to

reflect that outcome. They point to the dialogue between Hou and Lu in the

November 9 video:

Hou: And the second matter is that the action by unanimous written
consent of the board of directors of TuSimple Holdings Inc. We would
like to amend this board resolution by adding another clause of
appointing me, Xiaodi Hou, as the CTO of the Company condition[ed]
on the completion of the internal investigation. Is that yours?
Lu: Yes. I concur.
Hou: Okay. Thank you.248

247
Because the Voting Agreement is unambiguous, Plaintiffs’ plea to apply the forthright
negotiator principle to interpret the Voting Agreement is moot. See Comrie v. Enterasys
Networks, Inc., 837 A.2d 1, 13 (Del. Ch. 2003) (“When making a determination regarding
the ‘shared intent’ of the parties to an ambiguous contract, if a review of the extrinsic
evidence does not lead the court to an ‘obvious’ conclusion, the court may apply . . . the
‘forthright negotiator principle.’” (emphasis added)); see also Pls.’ Reply Br. 29
(acknowledging that the forthright negotiator principle applies only “to the extent the Court
cannot resolve any ambiguity by extrinsic evidence”).
248
JX 90 at 15−17; see also JX 135 at 1; JX 136 at 1; JX 144 at 1. JX 101 (emphasis
added).

70
Hou argues that Chen breached this agreement in two ways: (1) he failed to

cause a change to a draft board resolution, and (2) he did not reinstate Hou. Plaintiffs

add that Chen told employees on multiple occasions that Hou would return.249

The Plaintiffs do not attempt to argue, legally or factually, how the breach of

an oral agreement to reinstate Hou as CTO warrants reforming the Voting

Agreement or declaring it unenforceable two years after the fact. Indeed, the issue

was not identified as an issue for trial in the pretrial order or Plaintiffs’ Pretrial Brief.

Plaintiffs devote three paragraphs of their Post-Trial Opening Brief to this issue,

which lack any citation to legal authority. The Defendant pointed this out in his

Answering Brief, along with arguments on the merits, but Plaintiffs entirely ignored

the issue on reply and did not raise it in post-trial argument.

Having failed to respond to the Defendant’s arguments, Plaintiffs seem to

have conceded the issue. See Caspian Select Credit Master Fund Ltd. v. Gohl, 2015

WL 5718592, at *13 n.98 (Del. Ch. Sept. 28, 2015) (“Plaintiffs appear to have

conceded this point by failing to address it in their reply brief.”). But even if they

have not conceded the point entirely, they have failed to provide a coherent argument

that would justify a declaration that the Voting Agreement is unenforceable or must

be reformed. “It is difficult to address th[is] theor[y] because [Plaintiffs] only

249
Pls.’ Opening Br. 48–49.

71
mentioned [it] briefly, did not develop the arguments, and did not provide any

supporting [legal] authority . . . . A court need not address arguments that are

presented in such a cursory and elliptical manner.” AB Stable VIII LLC v. Maps

Hotels & Resorts One LLC, 2020 WL 7024929, *78 (Del. Ch. Nov. 30, 2020), aff’d,

268 A.3d 198 (Del. 2021); see also Roca v. E.I. du Pont de Nemours & Co., 842 A.2d

1238, 1242 n.12 (Del. 2004) (“[I]ssues adverted to in a perfunctory manner,

unaccompanied by some effort at developed argumentation, are deemed waived.”)

(internal citations and quotations omitted).

The argument also fails on the merits. The reinstatement term was expressly

conditional on the completion of the “internal investigation.” 250 The condition

precedent is not satisfied because there is no evidence that the investigation has

concluded.

To the extent that Plaintiffs are arguing that the Voting Agreement must be

reformed or declared unenforceable for failure to reinstate Hou as CTO or to

document the agreement to reinstate him in a Board resolution, the argument is

waived for failure to develop it with legal and factual support. It also fails on the

250
JX 101; JX 234.

72
merits because the alleged duty was expressly conditional, the condition did not

occur (and was not excused).251

III. CONCLUSION
The Voting Agreement executed on November 9, 2022, is valid and

enforceable. It terminates only upon the parties’ mutual written agreement. The

parties to the Voting Agreement have not mutually agreed that it is terminated. The

parties shall confer on a form of implementing order consistent with this opinion,

which shall be submitted within seven days.

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Because the Plaintiffs have failed to prove any of their claims, the court need not reach
Defendant’s affirmative defenses of ratification and acquiescence.

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