Chuang Wei Pan LLC v. Hiwin Holding LLC

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
MORGAN T. ZURN LEONARD L. WILLIAMS JUSTICE CENTER
VICE CHANCELLOR 500 N. KING STREET, SUITE 11400
WILMINGTON, DELAWARE 19801-3734

January 22, 2026

Geoffrey G. Grivner, Esquire Andrew Cole, Esquire
Buchanan Ingersoll & Rooney PC Cole Schotz P.C.
500 Delaware Avenue, Suite 720 500 Delaware Avenue, Suite 600
Wilmington, DE 19801 Wilmington, DE 19801

RE: Chuang Wei Pan LLC, et al. v. Hiwin Holding LLC,
Civil Action No. 2025-0402-LM (MTZ)

Dear Counsel,

I write to resolve the plaintiffs’ exceptions to an August 29, 2025
Magistrate’s Final Report (the “Final Report”).1 The Final Report denied the
plaintiffs’ request to inspect books and records under 6 Del. C. § 18-305 on the
grounds that they lack standing. After a two-day trial, the Final Report concluded
plaintiff Chuang Wei Pan LLC (“CWP”) had withdrawn as a member of defendant
Hiwin Holding LLC (“Hiwin” or the “Company”), and that CWP’s withdrawal
effectuated the removal of plaintiff Yaning Li (“Ms. Li,” and together with CWP,
“Plaintiffs”), and her father, nonparty Pu Li (“Mr. Li”) from Hiwin’s board.
Plaintiffs took exception to those conclusions.2 On exception, I conclude CWP
remained a member of Hiwin, and both Mr. Li and Ms. Li remained directors at the
time of the relevant books and records demand. Plaintiffs have standing to inspect
Hiwin’s books and records.

1
Citations in the form “Report” refer to the Magistrate’s Final Report available at docket
item (“D.I.”) 49. Citations in the form “Pu Aff.” refer to the Affidavit of Li Pu filed with
Plaintiffs’ Pretrial Opening Brief submitted to the Magistrate, available at D.I. 36.
Citations in the form “POB” refer to Plaintiffs’ Opening Brief in Support of Their
Exceptions To The Magistrate’s Final Report, available at D.I. 55. Citations in the form
“DAB” refer to Defendant’s Answering Brief in Opposition to Plaintiffs’ Exceptions To
Magistrate’s Final Report, available at D.I. 58. Citations in the form “Tr.” refer to trial
testimony, available at D.I. 55, Ex. C. Citations in the form “JX” refer to joint trial
exhibits.
2
D.I. 50; see generally D.I. 55.
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C.A. No. 2025-0402-LM (MTZ)
January 22, 2026
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I. Background

Hiwin is a board-managed Delaware limited liability company operating in
the real estate development sector.3 Hiwin began with two members: CWP,
holding a 40% membership interest, and WXG Funding, Inc. (“WXG”), holding
the remaining 60%.4 Hiwin has a five-person board: CWP appoints two seats, and
WXG appoints three.5 CWP is a Delaware LLC owned by Ms. Li and Mr. Li.6
WXG Funding is owned and controlled by Wang Xiaogang (“Mr. Wang”).7
Hiwin’s board comprises Mr. Li as CWP’s Chairman; Mr. Wang as Vice Chair;
Ms. Li as secretary and director; and two directors appointed by Mr. Wang, Wang
Fanggang (“F. Wang”) and Heli Song.8 Mr. Li’s son, Dapeng Li, was appointed as
a Board Observer.9

Hiwin’s operating agreement was signed on January 2, 2024, by Mr. Wang
on behalf of WXG, and Ms. Li on behalf of CWP.10 The operating agreement
specifies that Exhibit A lists “the name, present mailing address, taxpaying
identification number, and Percentage Interest of each Member,” and that each
entity listed on Exhibit A is a “Member” with membership rights.11 The operating
agreement specifies that CWP as a member shall make capital contributions.12 It
specifies CWP as a member shall designate two members of Hiwin’s board of
directors.13 It establishes how a meeting of the members can be called and held; a

3
Report at 3; JX 1.
4
JX 1 at Ex. A.
5
JX 1 § 5.1.
6
Report at 3.
7
Id.
8
JX 13 at 13.
9
JX 1 § 9.1; Pu Aff. ¶ 9.
10
JX 1 at 1, 38.
11
Id. §§ 1.18, 1.21, 2.6.
12
Id. §§ 3.1, 3.2.
13
Id. § 5.1.
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January 22, 2026
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special meeting can be called by a member, or by the Chairman of the Board.14
And it governs member withdrawal.15 It also offers members the right to examine
and copy Hiwin’s books and records.16
Exhibit A, the “LIST OF MEMBERS, CAPITAL ACCOUNT BALANCES,
AND PERCENTAGE INTEREST,” lists CWP as having a $16 million capital
account balance and a 40% interest, and WXG as having a $24 million capital
account balance and the other 60% interest.17

CWP committed to contribute $40 million to Hiwin.18 By mid-2024, CWP
had funded approximately $31.5 million.19 Around that time, Mr. Li grew
concerned about suspected mismanagement and was reluctant to contribute
additional funds.20 By August 2024, tension peaked when Mr. Wang refused to
permit an audit.21
A. CWP Discusses Withdrawal And Pursues Information.

On August 19 or 20, Mr. Li and Mr. Wang met in person in New York.22
During the meeting, Mr. Li told Mr. Wang that he wanted to resign as the chairman
of the board and suggested that Mr. Wang take the position.23 Mr. Wang tried to
dissuade Mr. Li from resigning.24 They discussed CWP’s potential exit options—a
buyout by Mr. Wang, by new U.S. investors, or by new Chinese investors—but

14
Id. § 5.2.
15
Id. §§ 7.1, 7.3, 7.4, 11.1.
16
Id. §§ 1.21, 10.2.
17
Id. at Ex. A.
18
JX 1 §§ 3.1, 3.2.
19
Tr. 155:11–13, 157:16–17.
20
Pu Aff. ¶¶ 14–20.
21
Id. ¶¶ 21–22.
22
Tr. 124:12–17.
23
Id. 126:1–10.
24
Id. 124:15, 125:1–22.
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reached no concrete solution.25 While Mr. Wang testified he and Mr. Li “reached a
consensus and made a decision” regarding Mr. Li’s withdrawal, Mr. Wang
acknowledged that no specific exit plan was finalized.26
On August 24, Mr. Li sent a WeChat message (the “August 24 Message”)
addressing CWP’s withdrawal.27 The parties dispute whether it states CWP
“withdrew,” or “will withdraw.”28 Mr. Li suggested Hiwin treat CWP’s
investment as a loan, either repaying it by the end of the month or converting it
into a loan agreement with a higher interest rate.29 Mr. Wang and Mr. Li offer
varying perspectives on whether the August 24 Message was before or after an in-
person conversation at Mr. Li’s daughter’s home in New York.30
Mr. Wang replied to the August 24 Message about an hour later, stating this
notification “was very sudden” and he and his team will “study and explore as
soon as possible to find a feasible solution.”31

Over the next few weeks, Mr. Li continued to prod Mr. Wang for a
resolution, and Mr. Wang remained equivocal. On August 27, Mr. Li pressed Mr.
Wang to “give [them] a solution for withdrawing from [Hiwin]” by the end of the
25
Id. 129:8–130:10.
26
Id.
27
JX 8 at 2–3; JX 77 at 1–2. On WeChat, Mr. Li uses the nickname “Believer”; Mr.
Wang uses “Frank”; F. Wang uses “Wang Fanggang”; Heli Song uses “Harry”; and Ms.
Li uses “Dan Feng Bai Lu.” See generally JX 6.
28
JX 8 at 3; JX 77; POB 13; DAB 16.
29
JX 8 at 2–3; JX 77 at 1–2.
30
See JX 53 at 77:19–78:18 (Mr. Wang testifying in his deposition that he saw the
August 24 Message first, then met Mr. Li in person the next day where he formally
requested withdrawal); Tr. 124:24–133:16, 180:1–18 (Mr. Wang testifying at trial that he
and Mr. Li met in person first, where Mr. Li announced his withdrawal, and that Mr. Li
sent the August 24 Message later the same day); JX 61, 63:23–65:25 (Mr. Li testifying at
his deposition that there was no in-person interaction after the August 24 Message); Pu
Aff. ¶ 23 (describing the August 24 Message as demanding his investment be returned or
converted to a loan, as “the necessary precondition for which I will resign as the
chairman of the Board of directors”).
31
JX 8 at 4.
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month.32 Mr. Wang replied the next day, expressing uncertainty about whether Mr.
Li really intended to withdraw CWP.33 Two days later, Mr. Li again pressed for a
way to withdraw.34 Mr. Wang replied a few days after that, indicating his
understanding that withdrawal was far from final.35

On September 9, Mr. Li again pressed for a withdrawal plan, as well as the
return of interest, retroactive execution of the investment agreement, and related
receipts.36 He gave Mr. Wang three days to respond.37 On September 10, F. Wang
chimed in, indicating the matter was still in flux.38 Mr. Wang replied the same day
that he had been trying to communicate and “leak the news,” but had yet to find a
feasible solution.39 The next day, Mr. Li expressed frustration and stated he felt he
was “forced [] to withdraw” due to Mr. Wang’s actions, and emphasized his
September 9 conditions.40

32
Id.
33
Id. at 4–5.
34
Id. at 5.
35
Id. at 6 (“[R]egarding whether you withdraw or not, I respect your choice, and
sincerely hope that you can consider it all, so that I will not attend to one thing but lose
sight of another, and bear more pressure; you have several specific requirements on the
withdrawal, at this stage the cash flow will be very tight in the short term . . . .”).
36
Id. at 6–7.
37
Id.
38
Id. at 8 (“Li Uncle, message received. I will urge [Mr. Wang] in my own way to come
up with a workable solution that is acceptable to both parties as soon as possible.”).
39
Id.
40
Id. Plaintiffs contend Defendant’s translation omits the word “request,” and that the
proper translation should be “forced me to request to withdraw,” rather than implying a
completed withdrawal. POB 18.
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B. CWP Pushes For Information.

Thereafter, Mr. Li stopped discussing withdrawal and stopped demanding
Hiwin return his investment.41 He started pursuing information as a member and
director.

On October 1, 2024, CWP (through counsel) sent a demand to Hiwin for full
access to Hiwin’s books and records, pursuant to the operating agreement and
“Delaware law.”42 Hiwin and WXG responded on October 8: Hiwin agreed to
produce certain books and records not already in CWP’s possession, conditioned
on CWP paying copying costs per the operating agreement.43 Hiwin did not
dispute CWP’s status as a member.44 Hiwin’s response did not mention any
withdrawal by CWP.45
On October 13, Mr. Li urged the board take action to conduct the audit,
expressly invoking his status “as a shareholder and the chairman of the board” who
“[has] the right to investigate any business and financial transactions of [Hiwin] at
any time[.]”46

On October 16, Mr. Wang messaged Mr. Li about CWP’s membership
status. He addressed Mr. Li as “Chairman” and stated, “Regarding the
47

withdrawal of Chuang Wei Pan LLC, [the Company is still] seeking a feasible
solution through lawyers and potential investors, [with] no substantial progress.”48

41
JX 4; JX 5; JX 6; JX 8 at 8–10.
42
See generally JX 9; see also JX 1 §§ 1.21, 10.2.
43
JX 10.
44
Id.
45
Id.
46
JX 8 at 9.
47
Id. at 9–10.
48
Id.
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CWP sent a second demand for books and records on October 30, and
agreed to pay reasonable copying costs.49 CWP also renewed its request for an
independent audit of Hiwin’s finances.50 On November 7, Hiwin produced a
limited subset of financial records,51 including a “General Ledger” that lists CWP
as a member with “Total Equity” of $31,483,724.52 This ledger covered
transactions through at least October 31, 2024.53 On November 15, Hiwin
produced contracts for the purchases of real properties.54

On December 5, CWP and Mr. Li sent a third demand seeking the
production of additional books and records, focused on investigating alleged
breaches of fiduciary duty.55 Hiwin did not respond.56
On March 15, 2025, Song sent Mr. Li CWP’s K-1 for Hiwin, with a cover
letter to CWP from the accountant explaining, “It contains your share of the
limited liability company’s items of income/loss, deductions, credits, and other
information for the limited liability company’s tax year ended December 31,
2024.”57 The K-1 form identified CWP as a 39.6753% member of Hiwin, with an
ending capital account of $31,541,701—the same number on the General Ledger.58
The K-1 did not have the “Final K-1” box checked.59

49
See JX 11.
50
See id. at 1.
51
See JX 12 at 1; JX 14.
52
JX 18 at 3.
53
See generally JX 18; Tr. 153: 21–22.
54
See JX 12 at 4.
55
JX 17.
56
See JX 39 ¶¶ 15, 16.
57
JX 22; JX 39 ¶ 5; Tr. 34: 19–24.
58
JX 22.
59
Id.; Tr. 25: 17–20.
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C. March 2025 Board Meeting Efforts

Mr. Li continued to exercise his managerial powers and CWP’s membership
status. On March 17, 2025, Mr. Li announced a board meeting to be held on
March 26.60 Mr. Li proposed an agenda including “Decision on the amount of the
third capital injection by [WXG] and [CWP.]”61 Three days later, Mr. Li asked
Hiwin for documents before the meeting, explaining he was “writing as Chairman
of the Board of Hiwin Holding LLC on behalf of the Company’s Board of
Directors and significant holder, [CWP].”62

Mr. Li’s call for a board meeting inspired a flurry of communication. Mr.
Wang suggested postponing it.63 Mr. Li wanted to hold it as scheduled; so did
Dapeng Li and Ms. Li.64 Mr. Li tried to recruit F. Wang to advocate for holding
the meeting.65 The morning of the meeting, there was more discussion about
whether it would be held and where F. Wang stood.66 Neither F. Wang nor Mr.
Wang attended the board meeting; the attendees were Mr. Li, Ms. Li, and Dapeng
Li.67

On March 31, CWP, Ms. Li, and Mr. Li delivered the fourth and final
demand to inspect Hiwin’s books and records under the operating agreement and
Section 18-305 (the “Fourth Demand”).68 Hiwin did not produce any more
documents in response to the Fourth Demand.

60
JX 4 at 2.
61
Id.
62
JX 5.
63
JX 6 at 2–3.
64
Id. at 3–4.
65
Id. at 2.
66
Id. at 5.
67
Id.; see generally JX 16.
68
See JX 23.
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D. Litigation Ensues.

On April 14, Plaintiffs filed this action.69 On April 21, Hiwin’s counsel sent
Plaintiffs a letter taking the position that Mr. Li had voluntarily withdrawn CWP
from Hiwin as of December 31, 2024.70 In its May 16 Answer, Hiwin claimed for
the first time that Ms. Li was no longer a Secretary of Hiwin, and Mr. Li was no
longer the Chairman of the Board.71

On July 7, 2025, Mr. Wang unilaterally signed a formal Board resolution
purporting to retroactively acknowledge that CWP had withdrawn from Hiwin
effective December 31, 2024.72 The resolution dissolved Hiwin’s five-member
Board, removed Ms. Li as Board secretary, and noted Hiwin’s obligation to pay
CWP the value of its interest.73
A Magistrate in Chancery held a two-day trial on August 12 and August 13,
74
2025. On August 29, the Magistrate concluded Plaintiffs lacked standing to
inspect Hiwin’s records because “Mr. Li’s offer to withdraw constituted an attempt
to withdraw” and “the withdrawal of [CWP] also effectuated a withdrawal of Ms.
Li’s qualifying status on the board.”75 Plaintiffs took exception to those
conclusions, via briefing that closed on November 21, 2025.76 I have considered
the evidence before the Magistrate de novo.77

69
D.I. 1; JX 33.
70
JX 7.
71
See JX 34 ¶¶ 5, 6.
72
JX 76.
73
Id.
74
D.I. 45.
75
Report at 23.
76
D.I. 55; D.I. 58; D.I. 60.
77
DiGiacobbe v. Sestak, 743 A.2d 180, 184 (Del. 1999); Hauppauge Digital, Inc. v.
Rivest, 300 A.3d 1270, at *5 (Del. 2023) (TABLE); Ct. Ch. R. 144(a).
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January 22, 2026
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II. Analysis

Section 18-305(a) of the LLC Act provides inspection rights to “[e]ach
member of a limited liability company.”78 “Section 18-305’s corporate analogue, 8
Del. C. § 220, provides guidance on its scope. Section 220 ‘plain[ly] and
unambiguous[ly]’ limits inspection rights to current stockholders and directors.”79

Books and records actions are summary.80 So Delaware law circumscribes
how deeply the Court will dive to determine if the plaintiff has standing.
“‘Caselaw determining who is a stockholder or a holder of record under Section
220’—the corporate analog of Section 18-305—‘generally relies on the
corporation’s existing stock ledger. ‘In a typical case, the stock ledger controls
record-stockholder status, and a stockholder may point to the stock ledger to
show, prima facie, that she is in fact a holder of record.’”81 “[W]hen a stock ledger
exists and no other reason appears to question its authenticity or accuracy, our law
has always accorded prima facie stockholder status to one whose name appears on
such a ledger.”82 For LLCs, the “analog” of an existing stock ledger is an existing,
valid membership list.83

While a ledger or membership list is prima facie evidence of standing in a
books and records proceeding, the Court may look beyond those documents in
limited circumstances, and the prima facie case may be rebutted by clear and
convincing evidence.84 Balancing the summary nature of a Section 18-305 action
78
6 Del. C. § 18-305(a), (b).
79
Prokupek v. Consumer Cap. P’rs LLC, 2014 WL 7452205, at *6 (Del. Ch. Dec. 30,
2014).
80
KT4 P’rs LLC v. Palantir Techs. Inc., 203 A.3d 738, 754 (Del. 2019) (“Books and
records actions are not supposed to be sprawling, oxymoronic lawsuits with extensive
discovery . . . the Court of Chancery is entitled to ‘summarily order’ an inspection.”).
81
Gill v. Regency Hldgs., LLC, 2023 WL 4607070, at *10 (Del. Ch. June 26, 2023)
(internal quotations and citations omitted).
82
Holtzman v. Gruen Hldg. Corp., 1994 WL 444756, at *2 (Del. Ch. Aug. 5, 1994).
83
Mack Brothers v. Keypoint Intel., LLC, 2025 WL 3041804, at *6 (Del. Ch. Oct. 29,
2025).
84
See Pogue v. Hybrid Energy, Inc., 2016 WL 4154253, at *3 (Del. Ch. Aug. 5, 2016).
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January 22, 2026
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against an LLC’s relative informality, the Court will undertake a narrow inquiry to
consider other instruments reflecting ownership, mindful of their distance from the
membership list.85 The Court will entertain a standing defense based on
documents other than a membership list where the defense could be resolved based
on factual admissions or contractual interpretation.86 For example, in Pogue v.
Hybrid Energy, Inc., the Court declined to rely on a ledger where the
plaintiff conceded the stock issuance through which he obtained his stock was
void.87 In Prokupek v. Consumer Capital Partners LLC, the Court dismissed a
books and records action where the Court could determine as a “matter[ ] of
contract interpretation” that the plaintiff “was no longer a member of [the
company] when he demanded inspection” because the LLC had redeemed the
plaintiff’s interest pursuant to unambiguous contract terms.88 And in Gill v.
Regency Holdings, LLC, the Court found prima facie evidence of standing in an
operating agreement and an attached membership interest ledger, later amended by
two assignment agreements and a board resolution.89 While the defendant argued
the assignment agreements were invalid, the Court declined to engage with that
attenuated argument.90
Here, the trial record contains a valid membership list that explicitly states
CWP is a member of Hiwin. That list affords CWP prima facie membership
status. The evidence offered to rebut that prima facie case is too attenuated to
consider in this summary proceeding, and far from clear and convincing.

A. The Trial Record Contains A Membership List.

Plaintiffs seek to establish CWP’s prima facie membership status based on
Hiwin’s general ledger produced on November 7, 2024.91 While that general
ledger reports the value of Hiwin equity held by CWP and WXG, it is at bottom an
85
Mack Bros., 2025 WL 3041804, at *5, *7; Gill, 2023 WL 4607070, at *9–11.
86
See Gill, 2023 WL 4607070, at *10.
87
2016 WL 4154253, at *3.
88
2014 WL 7452205, at *3–4.
89
2023 WL 4607070, at *10–11.
90
Id.
91
See POB 44.
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accounting ledger.92 The general ledger was not created to reflect Hiwin’s
membership. It may go too far to determine prima facie ownership based solely on
that document.
There is a membership list in the record: Hiwin’s undisputedly valid
operating agreement. “All considerations of an LLC’s internal governance
commence by examining the LLC agreement.”93 The agreement repeatedly
designates and treats CWP as a member,94 and lists CWP as a member in the
incorporated Exhibit A’s “list of members.”95 It further links membership status to
specific governance rights, including voting rights96 and inspection rights.97

No party has disputed the validity of the agreement in any respect. Nor was
the agreement amended as of the Fourth Demand, notwithstanding its requirement
that it be amended to reflect membership changes.98 Indeed, Mr. Wang’s
purportedly retroactive July 7, 2025 resolution does not reference any amendment
to the operating agreement.99
The signed operating agreement and its attached Exhibit A constitute prima
facie evidence that CWP is a Hiwin member. The next question in the analysis is
whether there is clear and convincing evidence, of a sort the Court will consider, to

92
See JX 18; e.g., Doerler v. Am. Cash Exchs., Inc. 2013 WL 616232, at *7 (Del. Ch.
Feb. 19, 2013) (ordering production of a general ledger because “[a]ccess to the general
ledger is necessary and essential to determining whether and to what extent the
[stockholders] are continuing to use [the company]’s cash as their own”); DFG Wine Co.,
LLC v. Eight Ests. Wine Hldgs., LLC, 2011 WL 4056371, at *9 (Del. Ch. Aug. 31, 2011)
(“A general ledger would be part of the ‘[t]rue and full information regarding the status
of the business[.]’”).
93
See In re Coinmint, LLC, 261 A.3d 867, 900 (Del. Ch. 2021).
94
JX 1 §§ 3.1, 3.2, 5.1, 5.2.
95
Id. § 2.6, Ex. A.
96
Id. §§ 5.10, 5.11.
97
Id. §§ 1.21, 10.2.
98
Id. §§ 1.18, 1.28, 11.3.
99
JX 76.
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rebut that presumption and prove CWP withdrew before sending the operative
demand letter.

B. The Record Does Not Contain Evidence Of A Type Or In An
Amount To Rebut The Membership List.

Hiwin’s standing challenge relies on its reading of the August 24 Message,
which it argues withdrew CWP from Hiwin.100 The August 24 Message is not the
type of straightforward instrument or admission that the Court will consider for a
standing defense.101 It is not an unambiguous contract, as in Prokupek and Gill, or
a factual admission, as in Pogue.102 It is a small excerpt from months of
negotiations over WeChat. And its translation is disputed: Hiwin contends it
states CWP “withdrew,” while Plaintiffs press it states CWP “will withdraw.”103
The parties also dispute whether the August 24 Message was sent before or after an
in-person discussion of CWP’s withdrawal.104 It is impossible to determine
whether CWP withdrew in the August 24 Message without considering the rest of
the parties’ dealings and subsequent acts. The August 24 Message is not the sort
of evidence that the Court will consider to rebut a membership list, and it is not
clear and convincing evidence of CWP’s withdrawal. It does not rebut the
presumption that CWP is a member.

100
See DAB 32.
101
See Pogue, 2016 WL 4154253, at *3; Prokupek, 2014 WL 7452205, at *3–4; Gill,
2023 WL 4607070, at *9–12.
102
Pogue, 2016 WL 4154253, at *3; Prokupek, 2014 WL 7452205, at *3–4; Gill, 2023
WL 4607070, at *9–12.
103
See JX 8 at 3; JX 77; POB 13; DAB 16. This divergence stems from a feature of
Mandarin Chinese: “[u]nlike English, Chinese verbs are ‘tenseless’, i.e., the verb form
remains the same no matter when the event happens. Event time may be inferred with an
explicit time adverb or aspectual marker, or rely completely on the context for temporal
reference.” LIU, MEICHUN, THE OXFORD HANDBOOK OF CHINESE LINGUISTICS (William
S-Y. Wang, & Chaofen Sun, ed. 2015), https://doi.org/10.1093/oxfordhb/
9780199856336.013.0070. Neither party articulated why its version of the translation
should be deemed more accurate than the other’s. See POB 13; DAB 30, 38.
104
See supra note 30.
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If I were to accept Hiwin’s invitation to interpret the August 24 Message, I
would not be able to conclude there is clear and convincing evidence that CWP
withdrew. Mr. Wang’s responses were conciliatory and noncommittal, and
indicate CWP had not yet withdrawn.105 Later communications among Mr. Wang,
Mr. Li, and other Hiwin directors reflected a similar degree of uncertainty and
deference to Mr. Li.106 Then Hiwin produced documents upon Mr. Li’s request
under the operating agreement,107 and entertained Mr. Li’s request for a board
meeting,108 indicating Hiwin believed CWP was still a member. Hiwin did not
dispute CWP’s membership status until after Plaintiffs initiated this action.

Determining the August 24 Message’s effect would also require holding it
up to the light of Hiwin’s operating agreement provisions governing member
withdrawals. But a key provision governing withdrawal is arguably ambiguous,
potentially requiring extrinsic evidence to interpret.109 This adds to the burden of
determining whether the August 24 Message effectuated CWP’s withdrawal.
I cannot accept the August 24 Message as plain, clear, and convincing
evidence that CWP withdrew. As the trial and Final Report in this matter reflect,

105
See, e.g., JX 8 at 4–6.
106
Id. at 2–5, 10.
107
See generally JX 10; JX 12; JX 14.
108
JX 6; JX 16.
109
Section 1.39 of Hiwin’s operating agreement defines “Voluntary Withdrawal” as “a
member’s attempted dissociation from the Company by means other than by a transfer or
an Involuntary Withdrawal.” JX 1 § 1.39. By its plain terms, any attempt by a member
to dissociate (apart from a transfer or an involuntary removal) would itself be treated as a
completed “Voluntary Withdrawal.” But Article 7 envisions a structured process: a
member may initiate a voluntary withdrawal by giving a mandatory formal notice
followed by a waiting period (Sections 7.1 and 11.1), after which the member is entitled
to have its interest be valued and purchased through an appraisal process (Sections 7.3
and 7.4). Giving effect to an attempt at withdrawal would nullify those procedures.
Plaintiffs argue the confusing language was inadvertently carried over from an earlier
draft in which voluntary withdrawal was forbidden. See JX 19, §§ 1.39, 7.1 (prior draft
of the operating agreement where voluntary withdrawal, including any attempt, was
precluded); JX 1, §§ 1.39, 7.1 (permitting voluntary withdrawal with an unrevised
Section 1.39 definition).
Chuang Wei Pan LLC, et al. v. Hiwin Hldg. LLC,
C.A. No. 2025-0402-LM (MTZ)
January 22, 2026
Page 15 of 16

interpreting that message “effectively convert[ed] a summary books and records
proceeding into a plenary action.”110 Hiwin’s operating agreement offered prima
facie evidence that CWP was a Hiwin member. The Company offered no evidence
to rebut that prima facie presumption that could be considered without performing
a plenary investigation.

As comfort, I note the evidence that would be proper to consider in assessing
standing tends to show CWP did not withdraw before sending the Fourth
Demand.111 Hiwin’s 2024 K-1 does not indicate it was CWP’s final K-1.112 The
general ledger produced in November 2024 dockets CWP as holding $31.5 million
in equity.113 And there is no evidence that CWP followed the operating
agreement’s withdrawal procedures, such as delivering notice.114
One last issue remains: whether Mr. Li and Ms. Li are CWP directors. The
Magistrate’s conclusion that Mr. Li and Ms. Li are no longer Hiwin directors was
based entirely on CWP’s withdrawal.115 I have no basis to conclude they are not
Hiwin directors.
III. Conclusion

Upon de novo review, I conclude Hiwin’s membership list provides prima
facie evidence supporting a presumption that CWP was a member as of the Fourth
Demand, and that Hiwin’s standing defense failed to present plain, clear, and
convincing evidence to prove otherwise. I conclude CWP has standing to inspect
the documents sought in the Fourth Demand. The matter is remanded to the
Magistrate.

110
Gill, 2023 WL 4607070, at *11.
111
Mickman v. Am. Intern. Processing, LLC, 2009 WL 891807, at *2 (Del. Ch. Apr. 1,
2009) (considering a Schedule K-1 and an Offer in Compromise submitted to the IRS).
112
See JX 22.
113
See JX 18.
114
JX 1 §§ 7.1, 11.1; POB 28–29 (It is undisputed that neither [CWP] nor Mr. Li
provided the 90 days prior notice of withdrawal. . . . WeChat messages are not emails and
there was no mailing of such messages by Federal Express or otherwise.”).
115
See Report at 23.
Chuang Wei Pan LLC, et al. v. Hiwin Hldg. LLC,
C.A. No. 2025-0402-LM (MTZ)
January 22, 2026
Page 16 of 16

Sincerely,

/s/ Morgan T. Zurn

Vice Chancellor

MTZ/ms

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