Kuramo Capital Management, LLC v. Larry Seruma

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

KURAMO CAPITAL )
MANAGEMENT, LLC, KURAMO )
AFRICA OPPORTUNITY MASTER )
FUND II, L.P., KURAMO AFRICA )
OPPORTUNITY MASTER CO- )
INVESTMENT VEHICLE III, LP, )
and KURAMO AFRICA )
OPPORTUNITY AGRIBUSINESS )
VEHICLE, LP, )
)
Plaintiffs, Counterclaim )
Defendants, )
)
v. ) C.A. No. 2021-0323-KSJM
)
LARRY SERUMA, NILE CAPITAL )
MANAGEMENT, LLC, NILE )
GLOBAL FRONTIER FUND, LLC, )
and KN AGRI, LLC, Feronia KNM )
SRL, )
)
Defendants, Counter- )
Plaintiffs, Third-Party )
Plaintiffs, )
)
v. )
)
KURAMO OPPORTUNITY )
OFFSHORE FUND II GP, LTD., )
)
Third-Party Defendant. )

POST-TRIAL MEMORANDUM OPINION

Date Submitted: October 6, 2023
Date Decided: April 30, 2024

Bruce E. Jameson, J. Clayton Athey, John G. Day, Christine N. Chappelear,
PRICKETT, JONES & ELLIOTT, P.A., Wilmington, Delaware; Mary S. Thomas,
THOMAS LAW LLC, Wilmington, Delaware; Steven R. Popofsky, Robert M.
Tuchman, KLEINBERG, KAPLAN, WOLFF & COHEN, P.C., New York, New York;
Counsel for Plaintiffs and Counterclaim Defendants Kuramo Capital Management,
LLC, Kuramo Africa Opportunity Master Fund II, L.P., Kuramo Africa Opportunity
Master Coinvestment Vehicle III, LP, Kuramo Africa Opportunity Agribusiness
Vehicle, LP & Third-Party Defendant Kuramo Opportunity Offshore Fund II GP, Ltd.

Eric A. Veres, ABRAMS & BAYLISS LLP, Wilmington, Delaware; Andrew K. Glenn,
Trevor J. Welch, Marissa E. Miller, George L. Santiago, Fiona M. Carmody, GLENN
AGRE BERGMAN & FUENTES LLP, New York, New York; Counsel for Defendants,
Counterclaim Plaintiffs, and Third-Party Plaintiffs Larry Seruma, Nile Capital
Management, LLC, Nile Global Frontier Fund LLC, KN Agri LLC & Counter-
Plaintiff/Third-Party Plaintiff Feronia KNM SRL.

McCORMICK, C.
At the heart of this case is Plantations et Huileries de Congo SA (“PHC”), a

Congolese palm oil production business headquartered in Kinshasa, the capital of the

Democratic Republic of the Congo (the “DRC”). The DRC owns approximately 24% of

the shares of PHC. The parties in this litigation collectively controlled the remaining

76%, but they had a serious falling out. They now dispute their relative beneficial

interests in the PHC shares. The plaintiffs claim that the individual defendant

schemed to cheat them out of a majority stake in the PHC shares. They assert claims

for breach of fiduciary duties and governing contracts. The defendants

counterclaimed for breach of contract, among other things. It was an everything-but-

the-kitchen-sink sort of litigation, which made factual and legal analysis challenging,

as this overly long decision no doubt reflects. Long story made short: The plaintiffs

prevail on some of their claims. The defendants prevail on none. And there are a few

loose ends that the parties have leave to address through supplemental briefing.

I. FACTUAL BACKGROUND

As reflected in the Schedule of Evidence submitted by the parties, the record

comprises 2,013 joint trial exhibits, trial testimony from four fact witnesses and one

expert witness, deposition testimony from fourteen fact witnesses and one expert

witness, and 21 stipulations of fact set forth in the amended pre-trial order.1 These

are the facts as the court finds them after trial.

1 C.A. No. 2021-0323-KSJM, Docket (“Dkt.”) 298, Joint Schedule of Evid. This decision

also cites to: trial exhibits (by “JX” number); the plaintiffs’ demonstrative exhibits (by
“PX” number), Dtk. 272; the defendants’ demonstrative exhibits (by “DX” number),
Dkt. 271; the trial transcript, Dkts. 274–78 (by “Trial Tr. at” page, line, and witness);
the Amended Pre-Trial Stipulation and Order (“Am. PTO”), Dkt. 265; the transcript
A. The Beginning

Plaintiff Kuramo Capital Management, LLC manages a group of private-

equity funds, which this decision refers to collectively as “Kuramo,” that target

investments in Sub-Saharan African businesses.2 Kuramo had four members:

Founder and CEO Wale Adeosun; Chief Investment Officer Shaka Kariuki; COO

Kamal Pallan; and an unnamed “institutional family office.”3 Kuramo first invested

in PHC in 2017.

1. Feronia And PHC

PHC is a Congolese palm oil production business headquartered in Kinshasa

with operations at three large, remote estates along the Congo River.4 PHC employs

of the post-trial oral argument, Dkt. 301 (by “Post-Trial Oral Arg. Tr. at” page, line,
and witness); and the transcripts of the depositions of Mpoko Bokanga, Monique
Gieskes, Kamal Pallan, Larry Seruma, Mojisola Fashola, Changlong (Sammy) Hung,
Haley Yu, Chris Harris, Tapiwa Mhizha, Shaka Kariuki, Elizabeth Seruma, Wale
Adeosun, Marti Murray, Amanda Muganwa, Edmond Lamek (by the deponent’s last
name and “Dep. Tr. at” page and line).
2 Kuramo clients invest for both financial returns and to generate “social and
environmental benefits.” See Trial Tr. at 6:12–7:2 (Pallan) (describing Kuramo
Capital Management, LLC). These entities constitute Kuramo: Kuramo Capital
Management, LLC, Kuramo Africa Opportunity Master Fund II, L.P. (“Kuramo
Master Fund”), Kuramo Africa Opportunity Master Co-Investment Vehicle III, LP
(“Kuramo CIV III”), and Kuramo Africa Opportunity Agribusiness Vehicle, LP, and
Third-Party Defendant Kuramo Opportunity Offshore Fund II GP, LTD (“Kuramo
Fund II GP”). See Am. PTO ¶¶ 24–30; Dkt. 291 (“Nile Post-Trial Opening Br.”) at 1
n.1.
3 Trial Tr. at 8:6–15 (Pallan); see also id. at 10:10–12 (Pallan) (stating Kuramo is

registered with the SEC).
4 Id. at 23:13–24:12 (Pallan); JX-6 at 1–9 (describing business and operations).

2
thousands of full-time employees and provides them and their families with housing,

healthcare, and education.5

The DRC has, at all relevant times, owned 23.84% of PHC.6 In 2009, Unilever

owned the other 76.16%.7 That year, Unilever sold its interests in PHC to Feronia

Inc., a Canadian holding company with no other assets or operations.8 The

transaction made Feronia the sole owner of PHC’s shares not held by the DRC and

thus the sole vehicle for investing into PHC.9 For simplicity, this decision refers to

the 76.16% interest acquired by Feronia as the “PHC Shares.”

Shortly after acquiring the PHC Shares, Feronia raised capital through debt

and equity transactions with a small group of development finance institutions

(“DFIs”). One of the DFIs was an affiliate of the British government called CDC

Group PLC.10 By early 2017, CDC had acquired a majority of Feronia’s stock.11

5 Trial Tr. at 23:23–24:12 (Pallan). The court’s summary of the facts eschews a deeper

dive into PHC’s history, which dates back to the early 1900s and is marred by the
disturbing saga of Belgian colonialism in the DRC.
6 Am. PTO ¶ 38; Trial Tr. at 24:20–25:8 (Pallan).

7 See Am. PTO ¶ 39.

8 Am. PTO ¶ 39. Feronia held a portion of its interests in PHC through a Belgium-
domiciled entity, Feronia Maia SPRL, of which it was 99.9999% owner. Dkt. 17
(“Nile’s Answer to Kuramo’s Am. Compl.”) at 13. For simplicity, and because Feronia
Maia SPRL is not independently relevant to the dispute, counsel’s briefing elides
Feronia Maia SPRL’s existence. The court follows counsel’s lead.
9 See Am. PTO ¶¶ 38–39.

10 Id. ¶ 40.

11 Id.; see Trial Tr. at 28:21–31:1 (Pallan).

3
Other DFIs from Germany, Belgium, and the Netherlands (the “DFI Lenders”)

invested in Feronia through senior secured debt.12 In December 2015, the DFI

Lenders entered into a “Term Facility Agreement” with PHC providing for loans of

up to $49,000,000.13 Over the next two years, the DFI Lenders funded $43,000,000.14

In connection with the Term Facility Agreement, Feronia agreed to fully guaranty

PHC’s repayment obligations to the DFI Lenders, pledging all its PHC Shares as

collateral.15

2. Kuramo And Mafuta Invest In Feronia.

Kuramo was first approached by Congolese businessman Kalaa Mpinga, a

majority owner of Mafuta Limited, to invest in PHC.16 In 2016, Mafuta was

negotiating an acquisition of Feronia shares from CDC and looking for financial

backing.17 The opportunity piqued Adeosun’s interest, and Kuramo decided to invest

in Feronia with Mafuta.18

To hold their respective interests and define each party’s governance rights,

Kuramo and Mafuta formed a pair of special purpose vehicles domiciled in

12 Trial Tr. at 36:9–37:2 (Pallan); JX-2 (term facility agreement).

13 JX-2 at 31–33.

14 Trial Tr. at 36:21–37:2 (Pallan); see JX-20 at 1–2.

15 Am. PTO ¶ 45.

16 Trial Tr. at 25:18–24, 32:11–14 (Pallan).
At trial, Larry Seruma claimed to have
sourced the PHC investment opportunity, but there was no support for that in the
record. Id. at 770:13–773:13 (Seruma).
17 Id. at 25:18–24, 27:12–28:8, 32:15–33:1 (Pallan); see JX-13 at 1–2.

18 Trial Tr. at 548:19–549:19 (Adeosun).

4
Mauritius—Straight KKM Limited (“KKM”), and its wholly owned subsidiary,

Straight KKM 2 Limited (together, the “Straight KKM Vehicles”).19 The plan was to

have Kuramo and Mafuta invest through Straight KKM Limited, which would hold

100% of the interests in Straight KKM 2 Limited, which would own equity in

Feronia.20

On September 14, 2017, Kuramo, Mafuta, and CDC executed a “Commitment

Deed”—an expression of “the Parties’ commitment to executing definitive

documentation” for an investment in Feronia.21 Kuramo committed to purchase

Feronia stock from CDC and through new issuances.22 Kuramo also committed to

provide Feronia with an unsecured credit facility of $4 million as a bridge loan

through January 31, 2018.23

3. Kuramo Reconnects With Nile.

Meanwhile, in early 2017, Adeosun reacquainted with an old connection—

Defendant Larry Seruma, the Chief Investment Officer and sole managing member

of Defendant Nile Capital Management, LLC (“Nile Capital”).24 Adeosun had known

Seruma for years through the relatively tight-knit community of U.S. investors who

19 JX-46; JX-47.

20 JX-20 at 1–2; Trial Tr. at 32:3–8 (Pallan) (“[W]e created a new vehicle that would

serve as the special purpose vehicle for the Kuramo investments and Mr. Mpinga’s
investment.”); see Am. PTO ¶ 3.
21 JX-27 at 1 (commitment deed).

22 Trial Tr. at 31:14–32:2 (Pallan); JX-27 §§ 1–6.

23 JX-27 §§ 5.1, 5.2.

24 Am. PTO ¶ 31; Trial Tr. at 11:23–12:3 (Pallan). Nile was a registered investment
adviser until March 29, 2019. Am. PTO ¶ 34.

5
focus on African businesses.25 Seruma testified that he had managed over

$2,000,000,000.26 By 2017, however, Seruma had closed all but two of the Nile

Capital-managed funds: Defendant Nile Global Frontier Fund (“NGFF” or “Nile

Global”), which held less than $2,000,000 in assets,27 and a non-party mutual fund

that went on to close in 2019.28

In April 2017, Kuramo committed to allocate at least $25,000,000 to Nile

Capital investments.29 Seruma agreed to manage Kuramo’s allocated funds as its

fiduciary.30 The parties memorialized their agreement by amending the Nile Capital

LLC agreement (the “Amended Nile LLC Agreement”).31 The company changed its

name from Nile Capital Management, LLC to Kuramo Nile Capital Management,

LLC (“Kuramo-Nile”).32 Seruma continued to use the trade name “Nile Capital

Management, LLC” or “Nile.”33

25 Trial Tr. at 11:12–22 (Pallan) (describing how Adeosun had known Seruma since

at least 2012 or 2013 because “the universe of investment managers who focus on
Africa is relatively small”).
26 Id. at 725:16–726:13 (Seruma).

27 JX-144 at 135–47 (12/31/16 NGFF financial statement); Trial Tr. at 20:16–21:23

(Pallan).
28 JX-140 at 1.

29 JX-7 (“Am. Nile LLC Agr.”) art. 7.

30 Id., art. 5; see Trial Tr. at 1204:2–12 (Seruma).

31 Am. Nile LLC Agr. at 2.

32 Id.

33 References to Nile Capital or Nile throughout this decision refer to the Seruma-

controlled entity.

6
Under the Amended Nile LLC Agreement, Kuramo became a member of

Kuramo-Nile and received 49,000 membership interest units.34

Prior to entering into the Amended Nile LLC Agreement, Kuramo performed

diligence on Seruma.35 Kuramo became comfortable entrusting Seruma with millions

of dollars in Kuramo clients’ money,36 but Kuramo understood that the relationship

might not work out as intended.37 For that reason, Pallan negotiated a term that

gave Kuramo the right to withdraw its beneficially-owned assets on demand, before

the end of the otherwise-applicable five-year lock-up period, for any reason or for no

reason at all.38

As Pallan explained:

Going back to our obligation to our limited partners . . ., we
said, look, if at any point in time this relationship doesn’t
work out for any reason, whether we don’t like the
investments you’re making or things don’t work out for
whatever reason, we want the ability to recall our money.
And, again, when I say “our money,” it’s really money that
was entrusted to us that we’ve entrusted to Mr. Seruma.
That’s all we wanted. If things don’t work out, give us back
our assets, and we will relinquish the 49 percent interest
that we have in [Nile Capital]. So that was an explicit and
stated agreement.39

34 Am. Nile LLC Agr. § 7.2. The Amended Nile LLC Agreement confusingly states
that it (Nile) held the remaining 51,000 and that those units entitled Seruma to
economic distributions. See Am. Nile LLC Agr. Ex. B. This fact is of little
consequence to the parties’ dispute, so the decision moves on.
35 Trial Tr. at 12:4–14:8 (Pallan); JX-10 at 26–27.

36 Trial Tr. at 13:17–14:8, 22:12–23:10 (Pallan).

37 See Trial Tr. at 18:12–19:21 (Pallan).

38 Trial Tr. at 18:12–20:11 (Pallan); Am. Nile LLC Agr. § 15.6.

39 Trial Tr. at 19:9–21 (Pallan).

7
This term is found in Section 15.6 of the Amended Nile LLC Agreement, titled

“Resignation/Termination by Kuramo Before the Lock Up Period” and provided that:

“In the event that Kuramo serves notice to . . . redeem its assets before the lock up

period,” then Kuramo would incur certain enumerated penalties.40

In 2017 and early 2018, Kuramo invested $25 million in NGFF. Specifically,

Kuramo entered into a subscription agreement to acquire interests in NGFF Series

P (the “Series P Subscription”). Kuramo executed the initial subscription agreement

on June 30, 2017, and provided NGFF with $15 million.41 Kuramo executed three

additional subscription agreements, providing NGFF with the additional $10 million

in capital.42 These investments made Kuramo NGFF’s 95.2% beneficial owner.43 Of

the remaining 4.8%, Seruma personally owned 1% based on a $250,000 cash

40 Am. Nile LLC Agr. § 15.6 (listing penalties as: “(a) Kuramo shall relinquish its

Membership and ownership interests and share of undistributed Profits of the
Company, (b) Any distributions of income or other assets that would have been paid
to Kuramo will be used by the Company to offset termination costs, (c) Kuramo will
be subject to the following surviving clauses from the agreement: Section 13.7, 13.8,
16.1, 16.3, 16.4, 16.5, 16.6, 16.7, and 16.8, (d) Kuramo will be liable for its Member
liabilities that may arise after the termination date but which were incurred during
the period of Kuramo’s Membership, in all cases subject to a maximum of the
aggregate amount of distributions paid to Kuramo, and (e) Kuramo shall fulfill all
legal and regulatory requirements as a consequence of such resignation.”); see Trial
Tr. at 19:22–20:3 (Pallan).
41 JX-1821 at 1, 32.

42 JX-32 ($3,000,000); JX-45 ($5,000,000); JX-72 ($2,000,000).

43 Trial Tr. at 21:24–22:11; see JX-176 at 7 (stating Kuramo’s ownership in Nile as of

December 31, 2018 is 95.2%). Kuramo made these investments through subscription
agreements. JX-1821 ($15,000,000); JX-32 ($3,000,000); JX-45 ($5,000,000), JX-72
($2,000,000).

8
contribution he made in 2014—a proportional interest typical for the industry.44 And

an outside investor, the Segal Foundation (“Segal”), purportedly owned the rest.45

In addition to Series P, at the time Kuramo acquired interests in NGFF, NGFF

also had a Founders Series and Series A.46 Seruma’s $250,000 cash contribution into

NGFF was made through the Founders Series.47

Through the Series P Subscription, Kuramo became bound to the terms of the

underlying NGFF LLC agreement (the “NGFF LLC Agreement”).48 The Series P

Subscription included a five-year lock-up period.49 Under the NGFF LLC Agreement,

that lock-up period restriction could be waived by the managing member of NGFF,

who was Seruma.50

44 JX-1188 at 5; Trial Tr. at 7:11–21, 22:5–11 (Pallan).

45 See Trial Tr. at 883:9–884:1, 1203:18–1204:1 (Seruma).

46 JX-1448 at 192 (NGFF LLC Agreement); JX-1821 at 15.

47 JX-1188 at 5.

48 JX-1821 ¶ 2 (“Subscriber has carefully read, understands, and agrees to abide by,

and be bound by, each of the terms and conditions set forth in the Memorandum, the
[September 2013] LLC Agreement and this Application and Agreement.”); JX-1448
at 189.
49 Id. ¶ 21 (“Subscriber agrees that the Interests are subject to limited withdrawal

rights, including that Interests may only be redeemed on June 30 or December 31
falling on or after the 60 months anniversary of the Members purchase of an
Interest.”).
50 JX-1448 at 202 (“The Managing Member may, in its sole discretion, expressly waive

or amend any of the restrictions, redemption schedule terms, lock-up periods, notice
requirements, limitations or provisos regarding withdrawals contained in this
Agreement, including, without limitation, permitting a Member to make a
withdrawal for the purposes of making a federal, state or local income tax payment
relating to the Member’s Interest(s) in the Company.”).

9
Seruma unilaterally amended the NGFF LLC Agreement on December 1, 2019

(the “Second Amended NGFF LLC Agreement”) in two ways.51 First, the Second

Amended NGFF LLC Agreement allowed for in-kind capital contributions; the

original NGFF LLC Agreement did not.52 Second, the Second Amended NGFF LLC

Agreement purportedly eliminated the managing member’s ability to waive the lock-

up period restriction.53

4. Kuramo Brings Nile Into The Feronia Investment.

After KKM executed the Commitment Deed, Kuramo asked Seruma to join

KKM.54 NGFF invested $7.5 million into KKM, and NGFF was integrated into the

KKM structure through an amendment to the shareholders’ agreement (the

51 Id. at 227.

52 Compare id. at 191 (“Each Member’s Capital Contribution shall be in cash, provided

that, in the discretion of the Managing Member, a Member’s Capital Contribution
may consist, in whole or in part, of marketable securities if deemed acceptable to the
Managing Member and when securities are free and clear of all claims, liens charges
and encumbrances.”), with id. at 229 (“Each Member’s Capital Contribution shall be
in cash, or, if acceptable to the Managing Member, in kind.”).
53 Id. at 239–40 (“The Series P Interests shall up subject to a five (5) year lock-up

period beginning as of the date of issuance of such Series P Interests (‘Series P Lock-
Up Period’). During the Series P Lock-Up Period, a Member may not withdraw any
capital from the Company with respect to any Series P Interests held by such
Member. After the Series P Lock-Up Period has lapsed, a Member may withdraw
capital from the Company with respect to the Series P Interests in accordance with
the terms of this Section 3. I 3 and the terms of such Member’s Subscription
Agreement.” (bold in original)).
54 See JX-40 at 1; JX-27 at 1; see also JX-47 (“Am. KKM Shareholders’ Agr.”) at 3;

Trial Tr. at 39:8–14 (Pallan) (explaining Kuramo, Nile, and Mafuta “invested directly
into an SPV called KKM”).

10
“Amended KKM Shareholders’ Agreement”).55 NGFF’s $7.5 million investment came

from Kuramo’s capital contributions to NGFF.56 In exchange for the $7.5 million,

NGFF received a 43% interest in KKM. Kuramo invested an additional $10 million

in KKM and received a 42% interest. Mafuta received the balance—a 15% “free

carry” for sourcing the deal and in anticipation of future contributions. 57 At the end

of the transaction, NGFF owned 43% of KKM, and Kuramo beneficially owned 95.2%

of NGFF through its $25 million contribution.58

After NGFF joined in KKM’s Feronia investment, Kuramo, Nile, and Mafuta

referred to themselves as either “K-N-M” or the “Consortium.”59

KKM had secured the right to place three individuals on the Feronia Board of

Directors.60 As part of the Amended KKM Shareholders’ Agreement, Nile secured

the right to nominate one of those three board members.61 The Consortium appointed

55 Trial Tr. at 37:23–40:14, 43:2–17 (Pallan); see Am. KKM Shareholders’ Agr. at 3;

JX-40 at 1; JX-55 at 3.
56 Trial Tr. at 43:2–44:1 (Pallan).

57 Id. at 43:8–44:23 (Pallan); JX-55 at 3; see JX-170 at 3.

58 Trial Tr. at 21:24–22:11; see JX-170 at 3; JX-176 at 7.

59 See Trial Tr. at 199:15–19 (explaining that KNM stood for Kuramo, Nile, and

Mafuta); id. at 107:11–16 (referring to the consortium). The briefings inconsistently
jump between “Nile” and “NGFF.” Nile is the managing member of NGFF. Nile
makes its investments through its fund, which is NGFF.
60 JX-87 at 469 (1/24/28 Investor Rights Agreement between Feronia Inc. and Straight

KKM 2 Limited).
61 Am. KKM Shareholders’ Agr. § 6.2.3 (“So long as KKM 2 is entitled to appoint: . . .

(c) at least three KKM 2 Directors, one such director shall be nominated by NILE,
one by MAFUTA and one by KURAMO.”).

11
Adeosun (for Kuramo), Seruma (for NGFF), and Mpinga (for Mafuta).62 Pallan later

replaced Adeosun as Kuramo’s representative.63

In addition to the Amended KKM Shareholders’ Agreement, Pallan and

Seruma, on behalf of Kuramo and NGFF, respectively, executed a “Side Letter

Agreement” dated January 9, 2018.64 The Side Letter Agreement provided that:

1) Kuramo and Nile shall agree unanimously on all voting
matters relating to the business of KKM and KKM2

2) In cases, where such agreement is not reached, Nile’s
instructions shall take precedence and be binding on
Kuramo

3) With respect to the investment note of $2 million to be
effected between KKM and Nile, in the event of a
default of the note, Kuramo shall approve the new
issuance of additional KKM shares to Nile to satisfy the
repayment of the agreement. The new shares to be
issued would be 15,571,386 to Kuramo and 25,714,314
to Nile; for the avoidance of doubt, the final
shareholding shall be 30.71% Kuramo and 54.29% Nile
and 15% Mafuta in such a situation.65

Contemporaneous with the Side Letter Agreement, Seruma sent an email

explaining its purpose—to ensure “that KKM is controlled by both Nile and Kuramo”

and that would be accomplished by unanimity between Nile and Kuramo in relation

to Mafuta.66

62 Trial Tr. at 44:24–45:7 (Pallan).

63 JX-185 at 1–2.

64 JX-1610 (“Side Letter Agr.”) at 1.

65 Id.

66 JX-53. For example, on September 20, 2018, Seruma emailed Pallan and Adeosun
asking for Adeosun’s consent on certain board actions because in Seruma’s words:

12
At the end of January 2018, the ownership structure of PHC looked as

follows:67

5. Kuramo Brings Nile Into The Feronia Investment.

In addition to the PHC deal, Seruma and Kuramo were working toward other

joint ventures. Relevant here, on January 30, 2018, Kuramo agreed to guarantee

NGFF’s $28 million acquisition of an entity called “GenAfrica.”68

“Kuramo Nile and Kuramo shall agree unanimously on all voting matters of Feronia
per our side letter agreement. So, I need your decision on this, otherwise the Feronia
board will not reach a decision.” JX-101 (emphasis omitted).
67 Dkt. 290 (“Kuramo Post-Trial Opening Br.”) at 13.

68 JX-62 at 9 (GenAfrica agreement); Trial Tr. at 957:17–19 (Seruma).

13
Originally, NGFF was purportedly going to manage the investment. In March

2019, however, Seruma claims that Kuramo told him he would not receive dividends

unless he gave up management authority to Kuramo.69 The record is unclear as to

what transpired next; according to Seruma, the effect was that Seruma had to close

one of his funds.70

Potentially shedding light on future events, Seruma told Pallan days before he

was set to lead the restructuring transaction described below: “I don’t want this to be

another GenAfrica, where I am cast aside or have a discussion where Kuramo and

Nile are not aligned.”71

B. The Restructuring Transaction

In mid-2018, Feronia management revealed that the company was nearly

insolvent despite the significant investments from the Consortium and the DFIs.72

This was surprising. As Seruma put it at the time, the “board is astonished at how

[a] company can go from being overly funded to running out of cash.”73 This prompted

a series of capital infusions and ultimately led to a restructuring.

69 Trial Tr. at 961:23–962:1 (Seruma); see JX-939 at 1.

70 Trial Tr. at 960:8–961:15, 965:19–22 (Seruma); JX-140 at 1.

71 JX-518 at 1.

72 Trial Tr. at 46:11–51:4 (Pallan); JX-85 at 1; see JX-99 at 1, 3.

73 JX-85 at 1–2.

14
1. KN Agri, The Bridge Loan, And The Private Placement

The Consortium conferred over the crisis at Feronia,74 and, by November 2018,

they had resolved to provide a second tranche of investments on terms to be

negotiated with CDC, conditioned on “significant changes to management, capital

structure and business model.”75 In December 2018, they reached an agreement to

fund Feronia through a short-term bridge loan (the “2018 Bridge Loan”).76 The

Consortium pledged $1.5 million in January 2019,77 and an additional $1 million in

March 2019.78

After executing the 2018 Bridge Loan, the Consortium and CDC discussed

long-term financing for Feronia.79 Those discussions culminated in an agreement for

the Consortium and CDC to recapitalize Feronia by acquiring additional Feronia

74 Trial Tr. at 50:15–51:4 (Pallan); JX-96 at 1 (Seruma to Pallan: “Feronia will most
likely to [sic] be in negative cash flow by end of this year and will need to raise equity
soon or within 6-12 months. As KKM we need to discuss . . . .”); JX-99 at 1 (Seruma
to Adeosun and Mpinga: “Bottom line, as investors in the business, we need to
evaluate the options as KKM (Nile and Kuramo) . . . .”); JX-100 at 1 (Seruma to
Mpinga: “I propose that we postpone our call with CDC for an IN PERSON discussion
when in London next week. The[re] are a number of key decisions, and new issues to
discuss, that . . . we need to discuss at the KKM level.”); JX-103 at 1 (Seruma to
Adeosun: “I would like to catch up on . . . Feronia. . . . I have a lot of information, for
example, on Feronia Board Meeting[s] that need[] your attention.”).
75 JX-111 at 4 (Seruma: “This email outlines the KKM proposal for your review,

comments or suggestions.”); Trial Tr. at 51:5–55:24 (Pallan).
76 Trial Tr. at 61:3–19 (Pallan); JX-121 at 4 (12/20/18 bridge loan facility agreement).

77 Trial Tr. at 61:3–19 (Pallan); JX-121 at 8–10.

78Trial Tr. at 61:12–62:4 (Pallan); JX-143 at 7–10 (3/14/19 bridge loan facility
agreement).
79 Trial Tr. at 64:22–66:8 (Pallan); see, e.g., JX-124 at 1–2, JX-131 at 1.

15
shares in a private placement (the “Private Placement”).80 The Consortium and CDC

each agreed to pay $9,155,753 for the shares.81 For the Consortium, a portion of that

sum was satisfied through forgiveness of the 2018 Bridge Loan, leaving a balance of

about $6,500,000.82

To effectuate the Bridge Loan and Private Placement, Seruma formed KN Agri,

LLC (“KN Agri”) through an LLC agreement (the “KN Agri LLC Agreement”).83 The

KN Agri LLC Agreement was later purportedly amended (the “Amended KN Agri

LLC Agreement”).84 KN Agri was a single member-managed LLC, with NGFF as the

member-manager.85 Of the $9,155,753 that KN Agri invested in Feronia, Kuramo

contributed $8,895,890 directly or indirectly. As a result, Kuramo became the 97.16%

beneficial owner of KN Agri86—a fact that Seruma contemporaneously affirmed in

80 Trial Tr. at 66:9–24 (Pallan); JX-169 (“May 31, 2019 Subscription Agr.”).

81 May 31, 2019 Subscription Agr. at 6–7.

82 Id. at 7.

83 See JX-120 (“KN Agri LLC Agr.”) at 3; Trial Tr. at 60:8–61:11 (Pallan).

84 JX-1274 (“Am. KN Agri LLC Agr.”). JX-1274 is a February 10, 2021 email chain
between Seruma and Feronia, which attaches the “Amended and Restated Operating
Agreement” of KN Agri LLC. The agreement is signed by Seruma but it leaves blank
the date. JX-1274 at 6 (“Dated as of [November ____], 2019”). Kuramo did not
challenge the validity of the amendment and the court follows suit. See Kuramo Post-
Trial Opening Br. at 116 n.605.
85 KN Agri LLC Agr. ¶ 5.

86 Trial Tr. at 78:7–22 (Pallan); JX-167 at 2.

16
writing.87 After the Private Placement closed, KN Agri was admitted to the

Consortium as a shareholder.88

As of May 31, 2019, the ownership structure of PHC looked as follows:89

2. Feronia’s Woes Worsen.

The financial condition of Feronia continued to deteriorate.90 Shortly before

the Private Placement closed, Feronia management reported positive EBITDA for the

87 JX-167 at 2; JX-232 at 2–3.

88 Trial Tr. at 70:18–71:14 (Pallan); JX-170 at 1, 8.

89 PX-1.

90 Trial Tr. at 80:23–81:8 (Pallan); JX-177 at 1, 4.

17
first time in Feronia’s history.91 Just weeks later, on July 22, 2019, Feronia Executive

Chairperson Frank Braeken disclosed that the company was not EBITDA positive

and was projected to lose tens of millions of dollars over the coming years.92 Braeken

gave his bottom line: “The company will need to urgently raise additional

financing.”93

It was clear to the Consortium members that changes had to be made, but the

members disagreed on the nature of those changes.94 At the time, CDC was signaling

its intention to dilute the Consortium’s interests if the group would not commit

further capital.95 Seruma disliked this idea and recommended walking away from

the investment.96

Kuramo disagreed. After returning to the DRC and meeting with local

management, Kuramo concluded that the PHC investment could be salvaged if the

Consortium was “in the driver’s seat of restructuring the company.”97

As Pallan explained,

up to that point in time we had always been co- or equal
shareholders . . . with CDC. However, because CDC had .
. . much longer . . . involvement with the business . . . , even
though we really wanted to get involved and engaged with
the day-to-day of the business, we weren’t able to do that.

91 Trial Tr. at 79:11–80:17 (Pallan); JX-151 at 1.

92 JX-177 at 1, 4; see also JX-188 at 1, 3–10.

93 JX-177 at 1.

94 Trial Tr. at 83:1–91:22 (Pallan).

95 Id. at 89:23–90:24 (Pallan); see also JX-245 at 1–2.

96 Trial Tr. at 89:1–90:24 (Pallan); see JX-229 at 1–2.

97 JX-196 at 6; Trial Tr. at 83:7–86:1 (Pallan).

18
So . . . we need to have ownership of the governance and
the management of the company [to move forward].98

Adeosun described Kuramo’s position as follows:

we felt that if we had control of . . . the PHC investment,
we could make the changes we wanted. We could institute
having local management in Kinshasa. . . . [I]f we had
control, we could manage the business much better. . . .
And we had the capacity to inject additional capital into the
business.99

Seruma and Mafuta came around to Kuramo’s view. On or about October 17,

2019, Adeosun met with CDC’s CEO, Nick O’Donohoe.100 The next day, Adeosun e-

mailed O’Donohoe that Kuramo and the Consortium were prepared to inject

additional capital if “fundamental changes” were made “going forward.”101

Discussions continued throughout the remainder of 2019 and culminated at a

February 2020 meeting in The Hague.102 The meeting in The Hague was understood

as important enough for Adeosun, Pallan, Seruma and Mpinga to all travel there in

person.103

During the meeting, the DFI Lenders and CDC reached an agreement on a

restructuring plan that gave the Consortium ownership of Feronia’s stake in the PHC

Shares. Pallan described the discussion as follows:

98 Trial Tr. at 85:12–86:1 (Pallan).

99 Id. at 555:17–556:4 (Adeosun).

100 See JX-231 at 1.

101 JX-235 at 1; Trial Tr. at 91:23–93:13 (Pallan).

102 See Trial Tr. at 93:14–16, 97:7–99:1 (Pallan); JX-314 at 1–3.

103 Trial Tr. at 98:14–99:2 (Pallan); id. at 554:24–555:2 (Adeosun); id. at 806:6–19

(Seruma).

19
So really this meeting, The Hague, was probably, I would
say, the single most important meeting that we had had in
the history of the investment to that point in time . . . . And
it was a series of discussions around what did management
know about the situation of the company, what were we
going to do about it . . . .

And then the next day, it was a reconvening of the same
parties. And at that point, now during the afternoon,
Ms. Bianchi, who at the time was the senior representative
of CDC, came out and said, look, CDC is willing to fund this
business indefinitely going forward. . . . But in order for
CDC to fund it, Ms. Bianchi said the lenders have to write
off all their debt.

And Ulrich – I remember sitting there, and Ulrich was
visibly upset. And he was, like, “No, no, no, no, no. Why
would we write off the debt?”

And Ms. Bianchi said, “Well, the only way that CDC is
going to put any more money into this company is if you,
the lenders, write off the debt.”

And Mr. Ulrich, you know, got up in his classic way and
said, “No. What’s going to happen is – how about a better
proposal? How about you, CDC, give ownership of this
company to Kuramo and the Kuramo Consortium for $1,
and then we will write off the debt.”

And we all looked around and, like, hmm, wow.

And that was how the meeting ended.104

Seruma, who was present for the meeting, claimed at trial not to remember

any proposal by the DFI Lenders for CDC to “transfer or hand over its interest to

KKM.”105 But in his contemporaneous e-mails, he specifically acknowledged the

104 Id. at 99:2–100:17 (Pallan); see also id. at 556:5–13 (Adeosun).

105 Id. at 983:8–985:6, 1017:8–1018:18 (Seruma).

20
“proposal to hand over to KKM as discussed in the meeting.”106 And Pallan’s and

Adeosun’s testimony on this point was corroborated by multiple other

contemporaneous e-mails.107

Kuramo understood that the DFI Lenders’ proposal, though welcome, was not

a “free lunch.”108 The DFI Lenders had concrete expectations around, among other

things, ESG.109 But within a few days of the meetings in The Hague, the DFI Lenders

confirmed that their proposal was genuine.110

3. The Nine Steps

After months of negotiation, on May 20, 2020, Feronia, the Consortium, the

DFI Lenders, and CDC entered into an agreement to restructure Feronia (the

“Support Agreement”).111 The Support Agreement attached a “Restructuring

Transaction Term Sheet” that laid out a nine-step restructuring transaction (the

“Restructuring Transaction”).112 Adeosun negotiated the Support Agreement but

entrusted Seruma with implementing it.113 As Adeosun testified:

I was involved in negotiating the [Support Agreement]. It
was very tedious, very consuming. I was really tired, and
I thought it made sense for me to pass [the baton] on to my

106 JX-319 at 1.

107 JX-315 at 1; JX-316 at 1; JX-318 at 1; JX-320 at 1.

108 Trial Tr. at 103:17–19 (Pallan).

109 JX-315 at 1; Trial Tr. at 103:4–21 (Pallan); see JX-396 at 1; JX-418; JX-551.

110 JX-319 at 1; Trial Tr. at 104:13–106:23 (Pallan).

111 JX-516 (“Support Agr.”).

112 Id. at 13–14 (listing the nine steps as part of the Restructuring Transaction “Term

Sheet,” which is Schedule A to the Support Agreement).
113 Trial Tr. at 563:8–564:2 (Adeosun).

21
partner to lead the restructuring and [implementation of]
the [S]upport [A]greement.114

On or about May 20, 2020, Seruma became Feronia’s Executive Chair. 115 He

immediately took the lead on implementing each of the nine Restructuring

Transaction steps.116

In Step 1, the Consortium agreed to provide, or to cause an affiliate to provide,

up to $15 million in additional bridge loans to Feronia (the “2020 Bridge Loan”).117

The Consortium provided these loans through two consecutive agreements. The first

was a bridge loan facility agreement between KN Agri and Feronia Maia SRL dated

May 20, 2020,118 and the second was a bridge loan facility agreement between

Kuramo and KN Agri dated May 22, 2020.119 Seruma signed both agreements

114 Id. at 563:5–17, 600:4–601:12 (Adeosun); see also JX-1325.

115 JX-508 at 1–3, 25–26. The initial draft resolution stated that Seruma would not
only be Executive Chair, but also CEO. JX-501 at 4. The Consortium had not agreed
to Seruma serving as CEO, so Pallan instructed counsel and Seruma to make the
necessary remedial changes, which they did. JX-502 at 1; JX-503 at 1; JX-504 at 1;
see JX-507 at 1.
116 Trial Tr. at 171:18–191:5 (Pallan).
117 Support Agr. at 13 (“FM and the Sponsor (or an affiliate of the Sponsor) shall enter

into a new bridge financing facility that shall provide for an initial draw in an
aggregate total amount of US$5 million to be drawn on or before May 21, 2020 (the
‘Initial Bridge Draw’) and, subject to the terms of the facility, subsequent draws as
may be required by Feronia, FM and PHC up to US $10 million (the ‘Subsequent
Bridge Draws’) (the ‘Bridge Financing’). The terms of the Bridge Financing will
be substantially in the form of Schedule ‘B’ hereto. The Bridge Financing
documentation shall be in form and substance acceptable to the Sponsor, CDC and
FM, each acting reasonably.” (bold in original)); Trial Tr. at 133:15–18 (Pallan).
118 JX-803 at 4 (“The Lender has agreed to provide the Borrower with an unsecured

subordinated term loan facility in the maximum aggregate amount of $15,000,000.”).
119 JX-514 at 7 (“The Lender has agreed to provide the Borrower with an unsecured

subordinated term loan facility in the maximum aggregate amount of $15,000,000.”).

22
(together, the “2020 Bridge Loan Agreement”).120 On May 20, 2020, Kuramo provided

PHC with the first $5 million.121 Seruma made drawdown requests.122 Kuramo

honored those requests.123

In Step 2, the Consortium agreed to form a “wholly owned special purpose

affiliate” for the purpose of purchasing Feronia’s PHC Shares.124 The Support

Agreement defined that entity as the “Purchaser.” To consummate Step 2, Seruma

formed “NewCo,” which he then named Feronia KNM.125

In Steps 3 through 6, Feronia would engage an advisor to market its PHC

Shares,126 the Purchaser would make a stalking horse offer to acquire the PHC

Shares and intercompany loans in the form of a ‘Share & Asset Purchase Agreement,’

120 JX-803 at 16; JX-514 at 28. The back-to-back loan structure gave Seruma full
control over the loan since Seruma could make draw requests through Feronia, and
then call cash from Kuramo through KN Agri.
121 JX-509 at 1–2.

122 See, e.g., JX-930 at 2 ($250,000 request in October 2020); JX-1024 at 2 ($4 million

request in November 2020); JX-1158 at 2 ($250,000 request in December 2020). The
December 2020 drawdown notice attached the November 2020 drawdown notice, and
Pallan corrected it accordingly. See JX-1160 (email from Seruma to Pallan subject
line “Oops” and stating the December 2020 drawdown notice “is corrected now” to
$250,000).
123 See, e.g., JX-930 at 1; see also JX-923, JX-1006 at 1.

124 Support Agr. at 12 (defining “Purchaser”); id. at 13 (“Purchaser is formed as a

wholly-owned subsidiary of the Sponsor.”); Trial Tr. at 133:19–21 (Pallan).
125 Trial Tr. at 199:15–19 (Pallan); see JX-809 at 1.

126 Support Agr. at 13–14 (“Each of Feronia, FM, PHC, the Sponsor, CDC, the
Purchaser and the Senior Lenders (collectively, the ‘Transaction Parties’) will,
unless an Acceptable Transaction (as defined below) is identified and approved by the
board of directors of Feronia on or prior to July 2, 2020, take all steps necessary to
complete the Transaction as set out in greater detail below.” (bold in original)); Trial
Tr. at 133:22–134:6 (Pallan).

23
(the “Purchase Agreement”) and if no superior offer emerged, Feronia would initiate

insolvency proceedings in Canada “for the exclusive purpose of implementing the

Transaction on an expedited basis, subject to court approval.”127 Steps 3 through 6

played out as planned. Feronia engaged Ernst & Young as its advisor.128 Seruma

hired DLA Piper to prepare the stalking horse bid.129 Seruma circulated the bid to

Kuramo for comment on June 28, 2020,130 and submitted it to Ernst & Young on June

30, 2020.131 No superior proposal emerged, and Feronia initiated insolvency

proceedings in Canada in July 2020.132

In Steps 7 and 8, concurrent with the commencement of the insolvency

proceedings, the Consortium would deliver a binding funding commitment and equity

support agreement, and Feronia would accept the offer set out in the Purchase

Agreement.133 That happened on July 17, 2020.134

127 Support Agr. at 14.

128 JX-777 at 14–18.

129 Trial Tr. at 173:15–174:3 (Pallan).

130 JX-661 at 1.

131 JX-680 at 1; see also Trial Tr. at 179:18–181:18 (Pallan).

132 See JX-849 at 1 (Canadian Bankruptcy Court Approval and Vesting Order).

133Support Agr. at 14 (“Concurrent with the commencement of the Proposal
Proceedings, the Equity Subscription would be completed, including delivery by the
Sponsor of the Binding Funding Commitment.”); Trial Tr. at 135:4–8 (Pallan).
134 JX-749 at 1, 3, 9.

24
In Step 9, the parties would complete the debt restructuring, and the DFI

Lenders would write off or restructure their debt.135 Seruma and the DFI Lenders

signed a debt restructuring term sheet in July 2020,136 and a formal agreement in

November 2020.137 Seruma negotiated both agreements for the Consortium.138

The Restructuring Transaction closed on November 19, 2020.139

C. The Falling Out

After the Restructuring Transaction closed, the Consortium had to select a

director general of PHC. Seruma wanted to serve in that role.140 Adeosun did not

believe that Seruma was the right choice.141 On January 22, 2021, Adeosun told

Seruma that he would neither be the director general of PHC, nor its permanent

CEO.142 That upset Seruma to the point that Seruma told Adeosun the parties

“should start negotiations on a complete separation of Nile and Kuramo.” 143 But

135 Support Agr. at 14 (“Concurrent with the acquisition of the Shares and
Intercompany Loans by the Purchaser pursuant to the Share & Asset Purchase
Agreement, the Transaction Parties will complete the Debt Restructuring described
below.”).
136 JX-751 at 29.

137 JX-1046 at 1, 7, 22.

138 See JX-713 at 1, JX-718 at 1; JX-1417 at 1 (“In the restructuring negotiations, my

understanding was that DLA Piper [and Seruma] represented what I deliberately . .
. subsume here under ‘[KKM2].’”).
139 JX-1041 at 1.

140 See Trial Tr. at 588:10–19 (Adeosun).

141 See id. at 584:10–585:20 (Adeosun).

142 See JX-1187 at 2.

143 See JX-1196 (“I feel very aggrieved!”).

25
Seruma did not negotiate. Instead, he engaged in self-help. This led to a falling out

between the parties, which prompted Kuramo to investigate Seruma’s actions.

Through that investigation, Kuramo started to learn of Seruma’s secret dealings

concerning Mpala and KN Agri. In an effort to increase his leverage, Seruma also

purported to have written off all of Kuramo’s interests in KN Agri. Seruma further

interfered with the DFI Lenders’ efforts to complete the restructuring. That

ultimately backfired, and the DFI Lenders refused to deal with Seruma.

On February 4, 2021, Adeosun traveled to Kinshasa to meet with Seruma. 144

In anticipation of the meeting, Pallan sent Adeosun an email laying out Kuramo’s

investments and how Kuramo could go about separating from Nile.145 The two met

on February 4 and 5.146 They were scheduled to meet again on February 6, but

Seruma said that he was sick and could not meet.147 Come February 7, Seruma again

said he was too sick to meet.148

On February 8, Adeosun and Mpinga traveled to the PHC estate, which was

hundreds of miles away from Kinshasa.149 While Adeosun and Mpinga were

hundreds of miles away, Seruma asked PHC’s then-Chairman George Buse to

144 Trial Tr. at 588:2–590:10 (Adeosun); JX-1222 at 1; see JX-1218 at 1.

145 JX-1218 at 1; Trial Tr. at 271:5–275:18 (Pallan).

146 See JX-1222 at 1.

147 Id.

148 Id.

149 Trial Tr. at 588:10–591:4 (Adeosun).

26
schedule an urgent PHC board meeting to select PHC’s next director general.150 Buse

complied and called a board meeting for February 9.151 The purpose of the board

meeting was to select the director general of PHC.152 At trial, Seruma testified that

the single-day notice was necessary because PHC’s lawyers stated that filing the

vacancy was “a critical piece in terms of risk management” and “should be done

urgently.”153

Also on February 8, Seruma emailed Buse unsigned resignation letters from

Raymond Batanga and Mpinga, two directors of the PHC board.154 Seruma then sent

a second email to Buse purporting to install two new Feronia KNM directors to the

PHC board.155

Adeosun and Mpinga received notice of the February 9 meeting and raced back

to Kinshasa.156 They made it in time.

150 See JX-1233 at 1 (“Larry, you are not picking up my calls. I understand you have

called a Board meeting to become the DG of PHC. This is not what we agreed to and
it is not acceptable. You need to stop this right now.”); Trial Tr. at 590:20–592:3
(Adeosun); Trial Tr. at 702:8–15 (Gieskes).
151 See Trial Tr. at 702:8–15 (Gieskes).

152 Id.

153 Id. at 906:10–23 (Seruma); see also JX-3052 at 1. The purported urgency was
identified two weeks prior, on January 25, 2021. JX-3052 at 2 (“the Chairman of PHC
should convene a meeting of the Board of Directors in the coming days to fill the
vacancy in the post of the Managing Director.”).
154 JX-1241 at 2, 4.

155 JX-1240 at 1.

156 Trial Tr. at 590:11–592:10 (Adeosun).

27
In transit, Adeosun and Mpinga sent a letter to the chair of PHC as “the 99%

beneficial owners of Feronia KNM, the entity owning the shares of Feronia Maia, and

as the previous owners of the KKM controlling entity,” to inform the chair that

Seruma’s proposed nomination “is an unauthorized action” which the pair protests. 157

During the board meeting, Adeosun pulled Seruma aside and told him that if

he proceeded to make himself the director general of PHC, then Kuramo would

terminate its relationship with Nile.158 In response, Seruma said that he would not

be bullied.159 Seruma forwarded his name to be the director general, but the board

voted against that proposition.160 The board chose Monique Gieskes as the director

general.161

Seruma stayed in the DRC to wait for a stockholder meeting, where he hoped

to seize control of PHC.162 At trial, he testified credibly that he felt unsafe during

157 JX-1249 at 3 (2/9/21 Ltr.).

158 Trial Tr. at 592:12–22 (Adeosun).

159 Id. at 911:15–20 (Seruma); id. at 592:23–593:1 (Adeosun stating Seruma
responded: “I guess that’s the way it’s going to be.”).
160 Id. at 593:2–8 (Adeosun).

161 Id.

162 Id. at 915:5–11, 919:6–13 (Seruma) (“I did remain in the Congo that period of time,

primarily to wait for the shareholder meeting on February 25th, because that was
[his] opportunity to replace the board.”).

28
this time.163 He was unsuccessful in replacing the board at the stockholders

meeting,164 and after the meeting, he returned to the United States.

On February 10, 2021, Kuramo sent Seruma a notice of termination of the

Amended Nile LLC Agreement and demanded that its assets be redeemed

immediately.165 Seruma refused to redeem Kuramo’s assets, arguing that a five-year

lock-up provision bars Kuramo from redeeming its assets before June 30, 2022.166

D. The Misappropriation

Immediately after the falling out, on February 10, Kuramo reached out to

Nile’s fund administrator, IQEQ, to request a breakdown of Kuramo’s ownership

percentages in NGFF and KN Agri.167 IQEQ reported that Kuramo had gone from

owning 93.37% and 97.16% of these entities pre-2020 to now owning 53.27% and

26.93%, respectively.168 Another IQEQ Capital Statement detailed that Kuramo was

the 28.12% owner of KN Agri as of December 2019.169 The statement was dated

163 Id. at 915:18–916:3 (Seruma) (testifying that those “close” to him were being
“rounded up”); id. at 921:21–922:1, 923:17–924:2 (Seruma) (testifying that someone
at the United States Embassy in the DRC told him to leave the country for his safety).
164 Id. at 923:2–6 (Seruma).

165 JX-1270 at 2 (“This Letter is formal notice to Larry Seruma of the intention by

Kuramo Capital Management, LLC to immediately terminate the LLC Agreement.
Pursuant to the LLC Agreement, we require a full redemption of all our beneficially-
owned assets invested in, among other entities, [NGFF], and KN AGRI LLC.”); see
Trial Tr. at 280:22–283:2 (Pallan).
166 See Trial Tr. at 914:4–12 (Seruma).

167 See JX-1290 at 1.

168 Id.; JX-232 at 2–3.

169 JX-1289 at 3.

29
December 31, 2019, but IQEQ had not provided it previously because Seruma had

instructed it not to.170 This alarmed Kuramo, to put it mildly.

It got worse. On February 15, Seruma emailed a letter to the DFI Lenders,

copying the Kuramo team. In the letter, Seruma claimed that “Kuramo has a zero %

shareholding in KN Agri,” as a consequence of the Feronia insolvency proceedings.171

Seruma further claims that Kuramo defaulted on the 2020 Bridge Loan and, as a

result, lost its ability to redeem the loan or convert it to equity.172 In other words,

Seruma claimed that Kuramo went from beneficially owning 97% of the PHC Shares

to beneficially owning an unknown minority percentage. Even more unbelievable,

Seruma next claimed to, personally, beneficially own a majority interest in the PHC

Shares.173

Tracing Seruma’s path from 1% to a majority interest has proven extremely

difficult, but there are four critical parts to the story.

First, to understand Seruma’s actions, one must understand the parties’

agreement to restructure KN Agri as a Series LLC. Before the Restructuring

Transaction, Seruma contributed to KN Agri a Ugandan farm called “Mpala,” which

170 Trial Tr. at 286:16–287:10 (Pallan).
Kuramo had never seen that document. Trial
Tr. at 286:4–15 (Pallan). And an IQEQ administrator tried to recall the email
immediately after sending it. JX-1288 at 1.
171 JX-1317 at 4–5 (“The Series B investment is written off to zero because Feronia

Inc as a result of the bankruptcy. So as of the December 2020 accounts under audit,
Kuramo has a zero% shareholding in KN Agri.”).
172 Id. at 4.

173 JX-1833 at 3–4, 22 (“The Nile Parties, directly and indirectly, own a majority of

[PHC].”).

30
Seruma valued at just over $20 million. Kuramo did not agree to the transfer, but

later assented after Seruma proposed that the parties restructure KN Agri as a Series

LLC, and that Mpala would be ring-fenced so as to not dilute Kuramo’s interests in

the PHC Shares. The parties agreed to protections for Kuramo in Series B and to

place the PHC Shares in Series B and Mpala in Series C (the “Ring-Fence

Agreement”).174 Much of what Seruma did from this point forward appears geared to

evade the Ring-Fence Agreement.175

Second, during the Restructuring Transaction, Seruma formed the NewCo

(Feronia KNM) as a subsidiary of KN Agri, and not the Consortium, although the

Support Agreement required that NewCo be a wholly owned subsidiary of the

Consortium.176 Seruma made Kuramo aware of this change,177 but Seruma had told

Kuramo that Feronia KNM would be placed in Series B, so Kuramo tacitly assented

to the change. Contrary to his representations, and unbeknownst to Kuramo, Seruma

then placed Feronia KNM in Series A instead of Series B (the “NewCo Maneuver”).

Third, during the Restructuring Transaction, Seruma transferred Mpala out

of the agreed-upon ring-fenced structure to NGFF, although the original NGFF LLC

Agreement did not permit in-kind capital contributions. Seruma secretly took the

174 Trial Tr. at 163:2–11 (Pallan); JX-344 at 2.

175 See JX-1113 at 1–2; JX-1134 at 1–2; JX-1191 at 1.

176 Support Agr. at 13 (stating the purchaser will be a wholly-owned subsidiary of the

Consortium); see Trial Tr. at 121:1–123:17 (Pallan); JX-437 at 1 (email from Pallan
stating: “KKM will own 100% of the equity of the NewCo holding company”).
177 JX-568 (email from Seruma stating “KN Agri LLC will be the sole shareholder of

NEWCO at setup”).

31
position that this transfer dramatically increased his stake in NGFF and beneficial

ownership interests over the PHC Shares from 1% to an unspecified majority interest

(the “Mpala Relocation”).

Finally, Seruma formulated a theory that Kuramo had agreed to a 60/40 split

of KN Agri. Mpala entitled Seruma to 60% and fully funding and converting the 2020

Bridge Loan entitled Kuramo to 40%. According to Seruma, because Kuramo failed

to fully fund and convert the 2020 Bridge Loan, he was the sole beneficial owner of

KN Agri and, in turn, the PHC Shares (the “1% to Majority Theory”).

1. The Ring-Fence Agreement

As discussed above, the parties formed KN Agri for the immediate purpose of

effectuating the 2018 Bridge Loan, but the entity was intended to serve other

purposes as well. Since at least May 2018, Kuramo and Seruma had discussed

forming a “food” or “agribusiness” fund.178 When they formed KN Agri, they intended

it to grow into the contemplated “food fund.”179 In their discussions concerning KN

Agri’s growth as a food fund, Seruma told Kuramo that he wanted to contribute his

personal Mpala interests into KN Agri at a value of $20 million.180

Seruma produced evidence at trial to support the $20 million valuation, but it

is hard to credit the evidence for the following reasons:

• The basis of the valuation is a 2019 analysis by valuation/appraisal firm
Barfric Property Company Limited that used “the Sales Comparison

178 Trial Tr. at 58:11–20 (Pallan); see JX-88 at 1.

179 Trial Tr. at 58:11–60:5, 140:3–143:9 (Pallan); see JX-178 at 1.

180 Trial Tr. at 142:14–144:17 (Pallan); JX-199 at 1.

32
approach and Cost Approach” to value Mpala.181 The report stated that
the market value of Mpala was 74 billion Ugandan Shillings as of
December 31, 2019.182 The report goes on to list four properties that the
report calls “comparable,” listing the ownership interest, acreage,
selling price, and locality characteristics.183 The report concludes
without any analysis, that “[a]fter a careful consideration of all the
relevant factors, we are of the opinion that the Fair Value for
Bookkeeping Purposes of the property is in the sum of UGX.
74,000,000,000- (Uganda Shillings Million Only).”184

• MAMM & Associates later issued an audit report concluding that Mpala
was worth approximately $20.2 million as of December 31, 2019.185 This
report appeared to rely on either Seruma or the Barfric valuation. Two
months before it was issued, the draft MAMM report had valued the
property at approximately $10 million.186

• Cohen & Co. issued a valuation memo for KN Agri LLC on June 29,
2020, “[t]o obtain an understanding of the Appraiser’s and the Advisor’s
inputs and assumptions used to determine the value of MPALA Limited
held in the Fund as of year-end.”187 Cohen discussed the work performed
by the appraiser, Barfric, and the auditor, MAMM, and concluded
“[b]ased on the testing performed, . . . that the appraiser [sic] prepared
by the specialist can be relied upon as support for the property value
used in the calculations of fair value and that the net asset value of
MPALA is a reasonable estimate of fair value as of year-end.”188

• BDO prepared an equity valuation report for Mpala in July 2021. BDO
valued Mpala at $23.4 million as of December 31, 2020.189 But the BDO

181 JX-1681 at 3

182 Id. at 5.

183 Id. at 12.

184 Id. at 13 (bold omitted).

185 JX-275 at 10 (signed June 26, 2020).

186 JX-408 at 21 (April 13, 2020 email, valuing the property at 37 billion Ushs as of

December 31, 2019, which was approximately $10 million); see also JX-355 (March
14, 2020 email from Seruma to Mpala auditor stating “we value the farm . . . at $20M
USD”).
187 JX-273 at 1.

188 Id. at 3.

189 JX-1679 at 18, 31.

33
report is flawed too in that to arrive at the property value, BDO looked
at Mpala’s book value, which was based on Mpala’s auditor’s financial
statements.190 The audited financial statements were based primarily
on Mpala’s land value.191 And that land value was based on an unnamed
property valuer’s unexplained conclusion.192

Maybe Mpala is worth what Seruma claims. Or maybe it is worth more. Or

maybe it is worth less. The evidence on this point is insufficient. In all events,

Kuramo had serious concerns about Seruma’s proposal to contribute Mpala to KN

Agri. At the time, KN Agri was a non-series, “pooled” vehicle.193 By May 31, 2019,

KN Agri had a total capitalization of $9,155,753, of which Kuramo had contributed

$8,895,890.194 Kuramo thus was the beneficial owner of 97.16% of KN Agri and faced

the prospect of having that interest diluted in favor of Seruma personally, based not

on cash but on an in-kind contribution of Ugandan farmland of unknown value.

Kuramo objected to the proposal.195

To address these concerns, Seruma proposed reorganizing KN Agri as a Series

LLC and placing the Feronia interests in separate ring fenced series to protect

190 Id. at 31, 45.

191 JX-275 at 6.

192 Id.

193 See KN Agri LLC Agr. at 3–5.

194 JX-167 at 2; JX-213 at 2.

195 Trial Tr. at 144:1–145:14, 147:11–15, 149:19–150:8, 152:1–153:17, 160:3–15
(Pallan).

34
Kuramo from dilution connected to Mpala.196 Kuramo agreed to this proposal in

September 2019.197

By the end of 2019, KN Agri’s financial statements reflected three series.198

Series A held a $2.4 million investment in Mpala, which was transferred to KN Agri

from NGFF.199 Series B held Kuramo’s investment. And Series C held Mpala, which

Seruma valued at approximately $20 million.

The parties later memorialized the reorganization by executing a supplement

to the Amended KN Agri LLC Agreement for each series in June 2020—the “Series

196 Id. at 142:14–145:14 (Pallan); see JX-199 at 1; JX-880 at 16.

197 See Trial Tr. at 144:21–145:9 (Pallan).

198 JX-880 at 16; see also JX-1407 (supplemental agreements for each series).

199 JX-880 at 16. The background on this investment is suspect. In December 2019,
Seruma asked Kuramo to make a direct investment of $2.5 million in Mpala. JX-271
at 1. In response, Pallan asked for support for the $20 million valuation of Mpala.
JX-284 at 1. Seruma did not want to provide this information. JX-285 at 2 (“I am
not providing anymore information.”). And so Kuramo declined the investment
opportunity. See Trial Tr. at 158:18–159:3; JX-291 at 1–2; JX-299 at 1. Instead,
Seruma caused NGFF to make the direct investment into Mpala. JX-239 at 2–4. In
January 2020, an associate of Seruma, Sammy Hung, informed Kuramo that NGFF
had invested $2.4 million into Mpala and the investment had been novated to KN
Agri in the form of Series A. Trial Tr. at 167:7–169:2 (Pallan); see JX-285 at 3
(discussing Hung’s communication to Kuramo); JX-704 at 1–2. Kuramo was not
aware that Seruma had even caused NGFF to make that investment. Trial Tr. at
167:7–168:21 (Pallan). The $2.4 million investment from NGFF into Mpala was
placed in Series A. Trial Tr. at 167:19–168:5 (Pallan); JX-704 at 1–2; JX-880 at 16.
From that point forward, KN Agri held a $2.4 million investment in Mpala through
Series A, but purportedly also held the entirety of Mpala through Series C. JX-880
at 16.

35
A Supplement,” “Series B Supplement,” and “Series C Supplement.”200 The Series B

Supplement differed from the other two in multiple ways, two of which are of note.

First, each supplement identified the “investment objective” as follows: “to seek

superior long-term total returns by investing in . . . a variety of markets in Frontier

Countries.”201 The supplements for Series A and Series C defined 28 countries as

“Frontier Countries” and the DRC was not among the 28.202 By contrast, the Series

B Supplement defined “Frontier Countries” as the DRC.203

Second, the Series A and Series C supplements did not identify specific

members, making NGFF their only member by default. By contrast, the Series B

Supplement identified Kuramo and NGFF as its members.

To sum it up, reorganizing KN Agri as a series LLC was Seruma’s idea.204

What Kuramo cared about was not having its interests diluted by Seruma’s proposed

contribution of his personal Mpala interests.205 Creating separate series— “ring-

fencing” Kuramo’s Feronia investment from Seruma’s personal Mpala interests—

represented the means Seruma selected for effectuating that agreed-upon outcome.206

200 JX-1407 at 35 (Series A Supplement); JX-1227 at 2 (Series B Supplement); JX-

1407 at 28 (Series C Supplement).
201 JX-1407 at 35 (Series A Supplement); JX-1227 at (Series B Supplement); JX-1407

at 28 (Series C Supplement).
202 JX-1407 at 41 (Series A Supplement); JX-1407 at 34 (Series C Supplement).

203 JX-1227 at 13.

204 Trial Tr. at 144:18–20 (Pallan).

205 Id. at 143:3–24 (Pallan).

206 See id. at 144:21–145:14 (Pallan).

36
The Series supplements accomplished this in part by: making Kuramo a member of

Series B; identifying the Series B investment’s objective as the DRC; and excluding

the DRC from the Series A and Series C Supplements.

2. The NewCo Maneuver

As discussed above, pursuant to the Support Agreement, the Consortium

formed Feronia KNM in June 2020 to make the stalking horse bid.207 But instead of

forming that entity as a wholly owned subsidiary of the Consortium as required by

the Support Agreement,208 Seruma formed it as a wholly owned subsidiary of KN

Agri.209 This had the effect of cutting Mafuta out of the Feronia interests. Seruma

made Kuramo aware of this change.210

Kuramo was not concerned by the change at the time, and for good reason.

Namely, Seruma had repeatedly represented to Kuramo that Feronia KNM would be

held in Series B.211 This was consistent with the Series supplements, which identified

207 Id. at 199:7–19 (Pallan); see JX-580 at 1.

208 Support Agr. at 13 (stating the purchaser will be a wholly-owned subsidiary of the

Consortium).
209 JX-568 at 1 (email from Seruma stating “KN Agri LLC will be the sole shareholder

of NEWCO at setup”).
210 Seruma informed Kuramo that the NewCo would be formed as a subsidiary of KN

Agri “[a]s an FYI.” JX-568 at 1.
211 Trial Tr. at 244:2–252:11 (Pallan); JX-842 at 1 (hand-written notes); JX-1052 at 1

(November 23, 2020 email from Pallan to Seruma stating: “The only subscriber to KN
Agri series B from Kuramo would be Kuramo Agri. We need to ensure audited NAV
reporting by March 31 of each year. Ideally we can do this in 2020 or if in 2021 then
with an effective date of Dec 31.”). Seruma explained that he chose Series A to protect
an investor, the Segal Family Foundation, despite Seruma never mentioning Segal
until trial. Trial Tr. at 1202:4–1204:12 (Seruma). Seruma’s decision cut out Mafuta
because Mafuta had no interest in KN Agri.

37
the DRC investments on the Series B Supplement exclusively. Also, the Series

supplements were finalized in June 2020, after the Support Agreement was inked

and when the parties were embarking on the Restructuring Transaction. Put

differently, when the Series supplements were executed, the only existing investment

in the DRC was about to be extinguished through Feronia’s bankruptcy proceeding.212

So there was only one reason to finalize the Series B Supplement specific to the

DRC—to hold the post-restructuring interests in PHC.

Seruma, however, did not place Feronia KNM in Series B. Rather, Seruma

placed Feronia KNM in Series A, which lacked the Series B protections for which

Kuramo had negotiated.213

3. The Mpala Relocation

By placing Feronia KNM in Series A, ownership defaulted to the ownership

structure of KN Agri, whose sole member was NGFF. To seize control of Feronia

KNM, Seruma increased his ownership percentage in NGFF by transferring Mpala

to NGFF.

On December 21, 2020 (after the Restructuring Transaction closed), Seruma

emailed KN Agri’s fund administrator, IQEQ, and asked for a shareholder register

212 As explained by Seruma’s expert Marti P. Murray, “Feronia Legacy Common was

extinguished in the insolvency proceeding, and once reorganized, old equity had no
interest in the assets that were sold by Feronia to the Purchaser (Feronia KNM).”
JX-1806 ¶ 107 (Murray Report) (citations omitted).
213 Trial Tr. at 243:11–17 (Pallan) (“Q. Mr. Pallan, sitting here today, are you aware

that one of the specific ways in which Mr. Seruma purports to have achieved this
result is by implementing the transaction through a series of KN Agri in which
Kuramo had no direct interest, specifically Series A? A. Yes, I’m aware of that now.”).

38
for NGFF as of October 31, 2020 (before the Restructuring Transaction closed).214 In

that email, Seruma instructed that “the $20,155,027 Larry Seruma investment in KN

Agri LLC will show in NGFF.”215 IQEQ responded months later, on March 16, 2021,

stating that the Mpala investment “was recorded by KN Agri in 2019 but nothing was

not [sic] recorded in NGFF in 2019.”216 IQEQ asked for “the relevant subscription

docs both from you into NGFF and from NGFF to KN Agri so that [IQEQ] can record

this in 2020.”217 On March 30, 2021, Elizabeth Seruma emailed Larry Seruma a

document titled “Seruma Additional Subscription 10 2020.” Both she and Seruma

had signed the document, which purported to grant them founders shares of NGFF

in exchange for an “investment amount” valued at $20,155,027—the value Seruma

had ascribed to Mpala. The document was dated October 16, 2020.218 Seruma sent

this to IQEQ in response to the March 16, 2021 request.219

At trial, Seruma argued that transferring Mpala was “in aid of the parties’ plan

to consolidate their agribusiness investments.”220 But there is no contemporaneous

evidence suggesting that the plan for consolidating the agribusiness investments

involved moving Mpala in NGFF from its ring-fenced position in KN Agri. The

214 JX-1351 at 3.

215 Id.

216 JX-1460 at 1.

217 Id.

218 JX-1492 at 1–3.

219 JX-1491 at 1.

220 Nile Post-Trial Opening Br. at 35.

39
evidence reflects that Kuramo did not want Mpala to be part of the mix at all and

restructured KN Agri as a Series LLC to protect Kuramo from exposure to Mpala.

As an independent reason for transferring Mpala to NGFF, Seruma argued

that, post-restructuring, the Consortium was starting from a blank slate. All prior

ownership interests in Feronia were removed from the books, and they were

“‘effectively starting a new company with new money.’ So, to secure their respective

post-restructuring economic stakes in PHC, Kuramo, Nile, and Mafuta had to

contribute new money.”221 In all events, Seruma’s “new money” contribution was

Mpala.

There are obvious problems with the new-company and new-money

explanation. For one, the math here is really fuzzy. There appears to have been some

unallocated contributions by Kuramo to NGFF that, even under Seruma’s narrative,

were not affected by the Restructuring Transaction.222 Seruma is intentionally vague

on this point. But also, Mpala was not exactly “new money”—again, it had already

been contributed to KN Agri in a ring-fenced structure. But to get to a position that

the Nile Parties like, they had to take the narrative yet another step.

221 Nile Post-Trial Opening Br. at 57 (quoting Trial Tr. at 1284:1–8 (Lamek)).

222 See generally JX-1821 (reflecting Kuramo’s $15,000,000 investment in NGFF); JX-

32 (reflecting Kuramo’s $3,000,000 investment in NGFF); JX-45 (reflecting Kuramo’s
$5,000,000 investment in NGFF), JX-72 (reflecting Kuramo’s $2,000,000 investment
in NGFF).

40
4. The 1% To Majority Interest Theory

Here comes more interesting math. According to the Nile Parties, Kuramo’s

investment in NGFF was reduced dramatically (again, fuzzy math—they do not say

how much) as a consequence of the Restructuring Transaction and provisions of the

NGFF LLC Agreement that allow Seruma to recalculate membership rights based on

net asset value.223 According to Seruma, the parties agreed that, in exchange for

Mpala, Seruma would acquire a 60% interest in KN Agri. And in exchange for fully

funding and then converting to equity the $15 million 2020 Bridge Loan, Kuramo

would acquire a 40% interest in KN Agri. But because Kuramo neither funded the

2020 Bridge Loan nor converted it into equity, Kuramo lost all equity in KN Agri,

rendering Seruma the sole beneficial owner of the PHC Shares.

But there’s more. Because it appears NGFF still holds millions of dollars of

Kuramo’s investment in Series P, the only way for Seruma to be able to claim

complete ownership of the PHC Shares and yet a 50–60% ownership interest in NGFF

is if Seruma separated the KN Agri investment to only the Founder Series, which is

where Seruma placed Mpala.224

223 See generally Nile Post-Trial Answering Br. at 25–27.

224 Seruma did not take this position at trial, but it does square with certain aspects

of the record and explains how Seruma could be correct that he owns 100% of the
PHC Shares and yet beneficially owns only 50–60% of NGFF. This would mean that
the Nile Parties’ trial demonstrative showing that NGFF was supposed to be the 60%
owner of KN Agri is inaccurate, and the demonstrative should state that “NGFF
Founders Series” is the 60% owner of KN Agri. See JX-1549 at 11 (New York motion
for injunction brief) (“A ring-fenced interest means that none of the Kuramo entities
have any membership interest in non-Series B investments, including PHC and
Feronia KNM, all of which are not related to either the Series B interests (or the

41
At least, this is what Seruma seems to be arguing. It has been far from clear

throughout this litigation because Seruma refused to provide straight answers or

take clear positions.

• In response to Kuramo’s October 14, 2021 interrogatory asking Seruma
to provide a percentage ownership breakdown of NGFF, Seruma
objected on the ground that the question was “vague” and “overbroad.”225
This objection gave rise to a motion to compel.

• At oral argument on the motion to compel, Seruma’s attorney stated that
they never took the position that Larry and Elizabeth Seruma owned
100 percent of NGFF. Counsel stated, and rightly so, that the ownership
of NGFF was not affected by the bankruptcy.226

• But in court-ordered discovery, the Nile Parties continued to refuse to
take a firm position on the ownership break-down.227

Series P interests for that matter).”). This is consistent with other statements
Seruma made. JX-1292 at 2 (Seruma stating on December 21, 2020 (post-
restructuring) that Kuramo Master Fund II and Larry Seruma are the only two
“shareholders with 10% or more holdings in NGFF”); JX-1875 at 13 (RFA Response
No. 25) (“the Kuramo Parties do not possess an ownership interest of any kind in
PHC”).
225 Dkt. 35, Ex. A, Interrogatory No. 9.

226 Dkt. 200 at 32:2–15 (1/20/23 oral argument on Kuramo’s motion to compel)
(counsel stating: “This is not correct that Larry and Elizabeth Seruma owned 100
percent of [NGFF]. That’s just not right. We never took that position. Okay? And I
will go without -- if they really dispute this, who owns [NGFF], it’s in a document. It’s
in the subscription document. I believe it’s 51 in favor of Mr. Seruma and his affiliates
and 49 percent in favor of the Kuramo Fund. No one has ever taken the position that
Larry and Elizabeth Seruma own 100 percent of [NGFF]. Never. And I will undertake
to identify the documents that set forth the relative ownership of that entity. None of
that was affected by the bankruptcy.”).
227 JX-1692 at 6–7 (supplemental interrogatory response) (“[T]he Nile Fund Parties

state the capital contributions made to [NGFF] during the relevant time period as
follows. Kuramo Africa Opportunity Master Fund II, LP, contributed $23,000,000 in
2017 and $2,000,000 in 2018. Larry Seruma and Elizabeth Seruma contributed
$20,155,027.08 in 2020. The Nile Fund Parties state that they identified the capital
contributions using the Shareholder Register at 12/31/2020 authored by IQ-EQ (US)

42
• With his pre-trial brief, Seruma attached an exhibit purporting to show
NGFF’s ownership structure after the Restructuring Transaction. The
exhibit listed Larry and Elizabeth Seruma, Segal, and Kuramo as
owners but did not provide their ownership percentages.228

• At trial, Seruma was asked what percentage of NGFF he and Elizabeth
Seruma own. Seruma testified that it was somewhere between 50% to
60%.229

• In post-trial briefing, the Nile Parties claimed that The anticipated
60/40 (Nile/Kuramo) ownership split of KN Agri remained aspirational
because Kuramo CIV III never fully funded the $15 million Bridge or
converted it into equity in KN Agri.”230 The implication was that,
because Kuramo never funded the 40%, nor converted to equity, Kuramo
owned little or no equity.

• In their post-trial answering brief, the Nile Parties implied Seruma had
a 100% beneficial ownership in NGFF, arguing that all (or near all) of
NGFF is Mpala.231 But at the same time stated that the parties’ intent
was that “KN Agri . . . would hold both PHC and Mpala.”232

Inc. The Nile Fund Parties further state that [NGFF] uses the valuation methodology
described in the ‘Net Asset Value and Valuation’ section of [NGFF]’s Confidential
Offering Memorandum, dated September 3, 2013.”).
228 Dkt. 257, App’x C.

229 Trial Tr. at 1060:5–1063:11 (Seruma); see also id. at 1059:8–15 (Seruma) (“Q. So

let me ask, though. The 60 percent is based primarily on the $20 million valuation of
Mpala; correct? A. Not primarily. But I would say the valuation in Mpala would be at
the KN Agri level, yes. I’m sorry. I misunderstood the question. At the KN Agri level,
yes, the Mpala would be, you know, the 60 percent.”).
230 Nile Post-Trial Opening Br. at 64–65 (cleaned up).

231 Nile Post-Trial Answering Br. at 21 (“Kuramo does not dispute that Feronia Inc.’s

equity is worthless. Nevertheless, Kuramo claims that their historical equity
investments would continue to count fully in the new investment structure. That
claim cannot be squared with the 60/40 (Nile Kuramo) split of KN Agri, which was
premised on the ascribed value of Mpala (23/38 = 60%) and Kuramo’s conversion of
the Bridge Loan to equity (15/38 = 40%).” (cleaned up)).
232 Id. at 88.

43
Here is the problem: There is no evidence that Kuramo agreed to a 60%/40%

post-Restructuring Transaction split. In fact, Pallan had rejected this allocation of

interests multiple times when Seruma attempted to have Pallan approve

organizational charts reflecting the break-down.233 Around February 2021, Pallan

learned that a junior employee at Kuramo had signed an organizational chart sent to

him from Seruma stating that Kuramo was the 40% owner of KN Agri, and NGFF

was the 60% owner.234 This was the same organizational chart Pallan had told

Seruma was incorrect.235 When Pallan found that a junior employee had signed off

on the organizational chart that Seruma had supplied, after Pallan rejected them,

Pallan emailed CDC stating “the 60/40 split is not correct at the KN AGRI level –

that was a representation by Larry. We own 97.5% of the beneficial assets of KN

AGRI – these are in the Series class directly related to Feronia.”236

The notion that Seruma would receive a majority interest in NGFF or KN Agri

post-restructure is inconsistent with Seruma’s statements to Kuramo during the

Restructuring Transaction. As Seruma implemented the steps of the Support

Agreement, he consistently communicated to Kuramo that Kuramo would continue

to hold a majority interest in NGFF, KN Agri, and Feronia KNM post-restructuring.

233 JX-1119 at 1; JX-1120 at 1; Trial Tr. at 294:3–297:8 (Pallan).

234 JX-1305 at 1.

235 Trial Tr. at 293:12–294:2 (Pallan); JX-1152 at 1–3. Seruma had sent the junior
employee the incorrect chart three days after Pallan told Seruma: “you seem to forget
I am the 99% beneficial owner of this asset!” JX-1133 at 1. And a week after Pallan
expressly rejected this chart. JX-1120 at 1–3.
236 JX-1305 at 1.

44
• On July 10, August 19, October 16, November 10, and December 10,
2020, Seruma circulated an organizational chart stating that Kuramo
was a 97.16% owner of KN Agri.237 On July 10, 2020, Seruma verified
the accuracy of the organizational chart.238

• On September 16, 2020, Seruma told Pallan: “You own 97 percent of
whatever is Nile and whatever – this is what I said to you. Whatever it
is in Nile you own a majority of it, 97 percent.” 239 Seruma continued:
“it’s really the entire fund because the entire fund is owned by you.”240

• On September 28, 2020, in response to Pallan asking Seruma: “So I do
see that it’s an investment but ultimately we’re the hundred percent
beneficial owner, right?” Seruma answered: “Yeah.”241

• On September 29, 2020, Seruma told Pallan: “[A]s far as I’m concerned,
my interest in this business and Kuramo are completely aligned because
it’s a financial investment. You know, whatever money I make falls into
Kuramo or whatever it is falls into Kuramo.”242 Seruma continued,
“everything goes back to Kuramo. That’s what I’m saying. Everything
goes back to Kuramo.”243

• In December 2020, after the Restructuring Transaction closed, Seruma
provided the DFI Lenders and Kuramo an organizational chart, as part

237 JX-719 (July 10, 2020); JX-721 (July 10, 2020); JX-806 (Aug. 19, 2020, accurate as

of July 11, 2020); JX-808 (Aug. 2020); JX-959 (Oct. 2020); JX-1009 at 4 (Nov. 2020).
The November chart was intended to reflect the parties’ post-transaction ownership
interests. Trial Tr. at 208:14–209:21 (Pallan). Seruma approved the memo, which
included the organizational chart. See JX-1102 at 1; Trial Tr. at 208:14–211:24,
254:11–256:22 (Pallan).
238 See JX-724 at 1–2. It looks as if Seruma viewed himself as the majority owner of
KN Agri after he contributed Mpala to Series C, even though the parties had
negotiated to protect Kuramo from dilution resulting from that transaction. The
evidence of this is JX-715, which reflects that on July 9, 2020, Seruma had caused
KN Agri to show he was its majority owner. Because the claim changed to the NGFF
level when Seruma moved Mpala, this decision does not dig into the circumstances of
the July 9 communication found in JX-715.
239 JX-875 at 22:10–16 (Sept. 16, 2020 call between Seruma and Pallan).

240 Id. at 22:23–24.

241 JX-898 at 18:1–4 (Sept. 28, 2020 call between Seruma and Pallan).

242 JX-901 at 19:7–12 (Sept. 29, 2020 call between Seruma and Pallan).

243 JX-901 at 29:20–22 (Sept. 29, 2020 call between Seruma and Pallan).

45
of the BIO report, showing that Kuramo held a 97.16% ownership
interest in KN Agri.244

• Throughout the Restructuring Transaction, Seruma stayed silent when
Kuramo explained what it believed to be the terms of the deal Seruma
was overseeing.245

Moreover, throughout the Restructuring Transaction, Seruma was tasked with

and understood his role to “act in the best interest of Kuramo.”246

There is also no factual support for Seruma’s claim that Kuramo refused to

fund the 2020 Bridge Loan. Seruma testified that in November and December 2020

he made “multiple asks to Kuramo to lend the full” $15 million, but “[t]hat did not

happen.”247

244 JX-1102 at 4.

245 JX-663 at 7 (Seruma failing to respond to Adeosun’s text from July 2020 where

Adeosun stated: “We are getting 100% of the company for $15M and saving our $26M
investment. You would do that deal all day.”); JX-842 at 1–4 (September 2020 Pallan
and Seruma drawing the structure to show that KN Agri Series B was holding
Feronia’s PHC interest); Trial Tr. at 246:12–249:9 (Pallan); JX-1052 at 1 (November
2020 email from Pallan to Seruma stating the parties needed to “[f]inalize KN
subscription agreements to convert the $10 million [bridge loan from Kuramo to KN
Agri] to equity” in Series B, and Seruma saying nothing); Trial Tr. at 251:10–
252:11(Pallan); JX-1070 at 1 (Seruma and Kuramo diagramming the post-transaction
ownership structure to show that Kuramo was the 99% owner of KN Agri, and NGFF
was the 1% owner); Trial Tr. at 252:12–254:10 (Pallan).
246 JX-1133 at 1.

247 Trial Tr. at 842:11–843:23 (Seruma).

46
In support, the Nile Parties point to a $4 million drawdown request from

December 2020.248 But, as Seruma acknowledged, that $4 million drawdown request

was a mistake.

The initial December 2020 request used the November 2020 request as a

template and therefore accidently made a $4 million ask instead of a $250,000 ask.249

Pallan noticed the mistake and informed Seruma.250 And Seruma made that change,

titling the email’s subject line “Oops” and stating that the December 2020 drawdown

notice “is corrected now” to $250,000.251

E. The End

In the end, Seruma did not gain control of the PHC Shares for an independent

reason—the DFI Lenders did not want to work with him. At the time of the falling

out, the DFI Lenders still had business with the Consortium. The final step of the

Restructuring Transaction involved the DFI Lenders writing off up to 80% of their

PHC debt.252 To do so, Feronia KNM needed to complete a “know your customer”

(“KYC”) process.253

248 Nile Post-Trial Opening Br. at 65.

249 See JX-1159 at 2.

250 JX-1158 at 1.

251 JX-1160 at 1.

252 Support Agr. at 14.

253 Trial Tr. at 310:1–19 (Pallan); see JX-1048 at 1; JX-1318 at 3.

47
After the February 10 board meeting, Kuramo informed the DFI Lenders it

had “decided to part ways with Larry Seruma.”254 The DFI Lenders responded that

they were “[n]ot surprised or disappointed, but appalled” by the development.255 The

DFI Lenders did not take sides between Kuramo and Seruma and instead told both

parties they would hear them both out.256

During the first two weeks of March 2021, the DFI Lenders held calls with both

Kuramo and Seruma to try to understand each party’s point of view and how the

transaction could be completed.257 After the calls, the DFI Lenders asked Seruma a

series of questions, including basic questions about NGFF and KN Agri. Seruma

provided incomplete responses.258 That led to the DFI Lenders explaining that

Seruma produced “documents showing three completely different current ownership

structures in KN Agri. All certified or documented by IQEQ or confirmed by DLA

Piper. That’s not acceptable.”259 The DFI Lenders explained that, without this

254 JX-1267 at 1–2. Adeosun further sent the DFI Lenders an email on February 15,
2021, accusing Seruma of acting against Kuramo. JX-1343 at 1, 3–4. Three days
later, Adeosun formed a committee with the goal of taking back control of PHC. JX-
3041; Trial Tr. at 645:11–20 (Adeosun).
255 JX-1267 at 1.

256 See JX-1349 at 1; JX-1421 at 1; JX-1439 at 1.

257 JX-1421 at 1; JX-1439 at 1.

258 JX-1440 at 1; JX-1456 at 1; JX-1457 at 1; JX-1461 at 1–2, JX-1465 at 1; JX-1466

at 1; JX-1467 at 1–2; JX-1471 at 1–3; JX-1747 at 1–3.
259 JX-1479 at 1.

48
information, they would not “be able to declare the restructuring agreements

effective.”260

Among the questions the DFI Lenders needed answers to was: What is

Mpala?261 Seruma responded to the DFI Lenders’ questions later that day, but he did

not answer them. Rather, he stated that “the complexity is real!” and that he would

clear up any confusion on the phone.262 The DFI Lenders were not satisfied by this

response. They said: “This must not be confusing and complex . . . . Who are you and

why are you now the key man and the person who apparently controls every company

in the PHC world and take every major decision for PHC?”263 Seruma reacted with a

defensive and hostile tone.264 And the DFI Lenders ultimately concluded that they

could not sign off on the KYC process with Seruma at the helm.265

260 Id. (“If we don’t get a satisfaction of our KYC check, we won’t be able to declare

the restructuring agreements effective.”).
261 Id. (“Please clearly explain what Mpala Limited is.
The information you sent (the
investment teaser/the ‘valuation’ by Cohen & Co) do not match. A 4,000 ha farm in
an early development stage does not have a value of 22 MM USD. We would be
grateful if you could provide an independent valuation for your investment into KN
Agri and explain once again why and how this was assigned by L & E Seruma from
KN Agri to NGFF. That’s a complete riddle to me and it would be very keen to
understand it.”).
262 JX-1482 at 1.

263 Id. (bold omitted).

264 JX-1488 (“I must say that I am quite surprised by the tone of your March 24

emails.”).
265 JX-1502 at 1 (“But here my blunt early warning: The currently frozen
restructuring deal we worked out in 2020, will not get effective with you, Larry
Seruma, as key man and UBO in the deal. You would need to immediately seek a new
solution for the senior lender’s debt of 45 MM USD. The explanation for this stance
is that the senior lenders idea was to make a deal with Kuramo. This was approved

49
In April 2021, the DFI Lenders offered to continue the transaction with

Kuramo at the helm and offered Kuramo the opportunity to acquire the PHC debt,

which Kuramo accepted.266

In March 2021, the DFI Lenders forwarded to Kuramo information that

Seruma had shared with them during the KYC process.267 That information revealed

the Mpala Relocation, among other things.268

F. This Litigation

Kuramo filed suit on April 15, 2021, claiming that Seruma, NGFF, and KN

Agri breached their contracts with Kuramo, and that Seruma breached his fiduciary

duties to Kuramo.269 On July 22, 2021, Kuramo filed an amended complaint adding

other Kuramo entities as plaintiffs, adding Nile as a co-defendant, and adding claims

for declaratory judgment, fraud, fraudulent concealment, and unjust enrichment.270

Nile answered the amended complaint, asserted counterclaims, and added two

additional Kuramo entities as third-party defendants. Nile asserted claims for

breach of contract, tortious interference with business relations, unfair competition,

in our committees. A total change of the partner we deal with, makes our internal
approvals void. Looking at the history of the last 3 months, I’m terribly sorry, but I
can’t see that you will meet our (at least DEG’s) KYC and compliance requirements.
My apologies if you feel offended by this strong statement, but that’s the reality.”
(bold omitted)).
266 JX-1518 at 3; Trial Tr. at 666:8–14 (Adeosun); JX-1522 at 1–2; JX-1669 at 1–3.

267 Trial Tr. at 313:14–316:14 (Pallan); JX-1458 at 1–2; JX-1459 at 1–3.

268 Trial Tr. at 313:14–316:14 (Pallan); JX-1458 at 1–2; JX-1459 at 1–3.

269 Dkt. 1.

270 Dkt. 9 (“Am. Compl.”).

50
declaratory judgment, defamation, violation of Delaware’s Deceptive Trade Practices

Act, estoppel, and conversion.271

Nile later amended its counterclaims and third-party complaint to add Feronia

KNM SRL as a counter-plaintiff and third-party plaintiff, to add Adeosun and Pallan

as third-party defendants, and to remove the unfair competition, defamation,

Delaware Deceptive Trade Practices Act, and conversion claims.272 Adeosun and

Pallan were later removed as third-party defendants.273 Kuramo answered the

amended counterclaims and third-party complaint.274

The court held a five-day trial commencing on May 1, 2023.275 The parties filed

post-trial briefing,276 and the Court held post-trial oral argument on October 6,

2023.277

II. LEGAL ANALYSIS

By the time of trial, the parties seemed to have winnowed down their claims,

counterclaims, and third-party claims, but not in a way that made the court’s job

easier. The parties’ submissions were extensive. There were many dangling issues,

271 Dkt. 17.

272 Dkt. 42.

273 Dkt. 106.

274 Dkt. 247.

275 Dkt. 273.

276 Dkt. 290 (“Kuramo Post-Trial Opening Br.”); Dkt. 291 (“Nile Post-Trial Opening

Br.”); Dkt. 295 (“Kuramo Post-Trial Answering Br.”); Dkt. 296 (“Nile Post-Trial
Answering Br.”).
277 Dkt. 300.The parties submitted the Joint Schedule of Evidence on August 25,
2023. Dkt. 298.

51
as well as underdeveloped, abandoned, and late-raised arguments. This legal

analysis represents the court’s best effort to make sense of it all.

A. Kuramo’s Claims Against Seruma

Kuramo’s primary claim is that Seruma breached his fiduciary duties by

misappropriating Kuramo’s beneficial interest in PHC through the Restructuring

Transaction. In addition, Kuramo claims that Seruma committed fraud by falsely

representing that he was protecting Kuramo’s interests. Kuramo also claims that

Seruma, Nile, and KN Agri breached their obligations under the Amended Nile LLC

Agreement and the 2020 Bridge Loan Agreement, respectively, and seeks a

declaration that Seruma is not entitled to advancement or indemnification. Kuramo

also asserted but failed to press claims for fraudulent concealment and breach of the

Amended KN Agri LLC Agreement and NGFF LLC Agreement. Kuramo has waived

those claims.278

1. Breach Of Fiduciary Duties

Kuramo frames its claim for breach of fiduciary duties as a claim for

“misappropriation,” focusing on the end result as opposed to the discrete actions that

Seruma took to reach that result (the Mpala Relocation, NewCo Maneuver, and 1%

to Majority Move, collectively, the “Challenged Transactions”).279 Kuramo argues

278 Oxbow Carbon & Mineral Hldgs., Inc. v. Crestview-Oxbow Acq., LLC, 202 A.3d

482, 502 n.77 (Del. 2019) (“The practice in the Court of Chancery is to find that an
issue not raised in post-trial briefing has been waived, even if it was properly raised
pre-trial.”).
279 See Factual Background § D.

52
that the Challenged Transactions are subject to review under the entire fairness

standard, and that the Nile Parties cannot prove that the actions were entirely fair.

Although both sides treat Kuramo as an umbrella fund run by Adeosun and

Pallan, in post-trial briefing, Seruma argues that Kuramo’s claim for breach of

fiduciary duty fails because “Kuramo fails to specify which of the Kuramo Parties

Seruma supposedly owed a fiduciary duty as the Managing Member of Nile Capital

Management.”280 The Nile Parties did not adequately develop this issue. All briefs

were imprecise when distinguishing the entities from their principals. In all

scenarios, Seruma was the human at the helm of the conduct underlying the claims

of fiduciary breach. The court thus focuses on the arguments against him.281

Strangely, both sides briefed this claim under common law fiduciary

standards, although it is an alternative entity dispute.282 Kuramo argues that default

280 Nile Post-Trial Answering Br. at 74.

281 Counts I–V (for breach of fiduciary duty, declaratory judgment, unjust enrichment,

and fraud) are asserted against “Seruma and each of the Seruma controlled parties.”
Am. Compl. ¶¶ 101–26. Count VI (for breach of the Amended Nile LLC Agreement)
is asserted against Seruma and Nile Capital. Id. ¶¶ 127–31. Counts VII and VIII
(for breach of the NGFF LLC Agreement and the KN Agri LLC Agreement) do not
specifically identify against which defendants the claims are asserted. Id. ¶¶ 132–
41. Count IX (for breach of the 2020 Bridge Loan Agreement) is asserted against KN
Agri. Id. ¶¶ 142–46. Count X (breach of fiduciary duty related to Mpala) is asserted
against Seruma and NGFF. Id. ¶¶ 147–51. And Count XI (for declaratory judgment)
is asserted against Seruma, KN Agri, and NGFF. Id. ¶¶ 152–56. In Kuramo’s post-
trial answering brief, Kuramo focuses its arguments on Seruma. See Kuramo Post-
Trial Opening Br. at 109 (“Seruma breached his fiduciary duties”). The court follows
this approach for the purpose of the fiduciary duty claims.
282Under Delaware law, managers or managing members of LLCs owe the full
panoply of fiduciary obligations unless the LLC agreement eliminates or modifies
them. 6 Del. C. § 18-1101. A provision that eliminates or modifies default obligations

53
fiduciary duties apply, and aside from a passing reference to the contractual

standards,283 Seruma defends his conduct under default fiduciary obligations. The

court follows the parties’ lead.

“must be clear and unambiguous.” Manti Hldgs, LLC v. Carlyle Gp. Inc., 2022 WL
444272, at *2 (Del. Ch. Feb. 14, 2022) (citations omitted). Any ambiguity is
interpreted “in favor of preserving fiduciary duties.” Id. (quoting Bay Ctr. Apartments
Owner, LLC v. Emery Bay PKI, LLC, 2009 WL 1124451, at *9 (Del. Ch. Apr. 20,
2009)). “[T]he standards for proving waiver under Delaware law are ‘quite exacting,’”
and “[t]he facts relied upon to prove waiver must be unequivocal.” Id. (alteration in
original) (quoting Manti Hldgs., LLC v. Authentix Acq. Co., Inc., 261 A.3d 1199, 1211
(Del. 2021)).
283 The Nile Parties half-heartedly argue that the governing LLC agreements either

eliminated or modified (they do not specify which) default fiduciary obligations. See
Nile Post-Trial Opening Br. at 135. But the Nile Parties have not developed these
arguments. See id. (arguing that because the Nile Parties prevail “under the default
standards, there is no need to fully brief whether they satisfied their contractually-
modified duties”). The Nile Parties “reserve[d] the right to fully brief this issue.” Id.
But they failed to brief it in their Post-Trial Answering Brief. Nile Post-Trial
Answering Br. at 74–75 (devoting two paragraphs to the issue in a 92-page answering
brief). It is not the court’s job to tease out arguments for a party, particularly when
they are well represented. So, this decision jumps to the common law analysis.
Moreover, the analysis would be the same under the contractual standard. Section
13.3 of the Amended Nile LLC Agreement provides that the manager is required to
resolve a conflict “in a manner that is, or provides terms that are, fair and reasonable
to the Company or any Member . . . .” Am. Nile LLC Agr. § 13.3(b). The phrase
appears similar to the language used in Energy Transfer Equity, L.P. Unitholder
Litigation, which the high court interpreted as invoking a standard similar to entire
fairness review. 2018 WL 2254706, at *18 (Del. Ch. May 17, 2018) (alteration in
original), aff’d sub. nom., Levine v. Energy Transfer L.P., 223 A.3d 97 (Del. 2019)
(TABLE); see also Brinckerhoff v. Enbridge Energy Co., Inc., 159 A.3d 242, 256–57
(Del. 2017) (“[t]he fair and reasonable standard is something, if not equivalent to,
entire fairness review” (internal quotation marks and citation omitted)).
Additionally, although the Amended KN Agri LLC Agreement and the NGFF LLC
Agreement both contain exculpation provisions, neither protect Seruma here.
Specifically, Section 2.7 of the Amended KN Agri LLC Agreement provides that the
manager is not liable if he acts “in the best interest of the Company or Series . . . .”
Am. KN Agri LLC Agr. § 2.7. And Section 5.5.1 of the NGFF LLC Agreement provides
that the manager is not liable for actions taken “in good faith on behalf of the

54
When determining whether fiduciaries have breached their default duties, a

court applying Delaware law evaluates the fiduciaries’ conduct through a standard of

review.284 Delaware law has three levels of standards of review: business judgment,

enhanced scrutiny, and entire fairness.285

The court evaluates a transaction under the most onerous standard, the entire

fairness standard, “[w]hen a transaction involving self-dealing by a controlling

shareholder is challenged.”286 “When the governing standard of review is entire

fairness, either because the plaintiff has made the necessary showing to rebut the

business judgment rule or for other reasons, then the defendant fiduciaries bear the

burden of proof to show that they in fact acted in a manner that was entirely fair to

their beneficiaries.”287

Kuramo argues that entire fairness applies to the Challenged Transactions

because Seruma controlled the Challenged Transactions288 and those transactions

Company and in a manner reasonably believed by them to be within the scope of the
authority granted to them . . . except when such action or failure to act constitutes
gross negligence, fraud or willful misconduct.” JX-1448 at 208. Seruma did not act
in the best interest of the Company or take actions in good faith on behalf of the
Company and in a manner reasonably believed to be within the scope of his authority.
284 See Chen v. Howard-Anderson, 87 A.3d 648, 666 (Del. Ch. 2014); In re Trados Inc.

S’holder Litig., 73 A.3d 17, 35–36 (Del. Ch. 2013).
285 Chen, 87 A.3d at 666 (quoting Reis v. Hazelett Strip-Casting Corp., 28 A.3d 442,

457 (Del. Ch. 2011)).
286 Ams. Mining Corp. v. Theriault, 51 A.3d 1213, 1239 (Del. 2012) (citations omitted).

287 Basho Techs. Holdco B, LLC v. Georgetown Basho Invs., LLC, 2018 WL 3326693,

at *23 (Del. Ch. July 6, 2018) (citation omitted).
288 See Kuramo Post-Trial Opening Br. at 109 (“It is undisputed that Seruma owed

Kuramo fiduciary duties stemming from, among other things, Seruma’s role as the

55
served to convey to Seruma and his wife a majority beneficial ownership interest in

the principal investment that he was managing.289 This is a conflict. Indeed, it is a

pretty egregious one.

In response, Seruma argues that the business judgment rule applies. He does

not attack Kuramo’s premise that Seruma is a controller. Rather, he argues that

there was no conflict. To set up this argument, he describes the Challenged

Transactions narrowly as the sale of the Consortium’s Feronia stake and the

Canadian bankruptcy process.290 He says that this was an arm’s-length transaction

because “no Nile Fund Party was on both sides of the Asset Sale,”291 and “[t]he Asset

Sale was approved by Feronia Inc.’s independent directors with the advice of counsel,

implemented by an independent Proposal Trustee, and approved by a Canadian

Bankruptcy Court.”292

sole human controller of the Delaware LLCs NGFF and KN Agri, in both of which
Kuramo is a non-managing member, and from Seruma’s status as an investment
advisor who long managed Kuramo investment funds” (emphasis added) (citing See
Paige Cap. Mgmt., LLC v. Lerner Master Fund, LLC, 2011 WL 3505355, at *30 (Del.
Ch. Aug. 8, 2011), with an explanatory parenetical that the “human controller of
investment firm organized as Delaware alternative entity owes fiduciary duties to
fund’s majority, outside investor”)).
289 Kuramo also cites to case law where entire fairness was applied to a conflicted

controller transaction. See, e.g., nn. 589–90 (citing Levco Alt. Fund Ltd. v. Reader’s
Digest Ass’n, Inc., 803 A.2d 428, 2002 WL 1859064, *2 (Del. Aug. 13, 2002) (TABLE);
In re Ezcorp Inc. Consulting Agreement Deriv. Litig., 2016 WL 301245, *12 (Del. Ch.
Jan. 25, 2016); Reis, 28 A.3d at 459).
290 Nile Post-Trial Answering Br. at 77–78.

291 Id. at 77.

292 Id. at 77–78.

56
Seruma’s argument unduly limits the scope of Kuramo’s challenge to a single

action. And the argument does not work as to that action because none of the

approvals nor implementing mechanisms on which he relies dealt with Seruma’s

actions vis-á-vis Kuramo. Rather, their roles and purpose were to ensure the

integrity of the process vis-á-vis the debtor and its creditors. In the course of these

Challenged Transactions, Seruma owed fiduciary obligations to Kuramo.

Accordingly, the court evaluates the Challenged Transactions under the entire

fairness standard. The Delaware Supreme Court has described entire fairness review

as follows:

The concept of fairness has two basic aspects: fair dealing
and fair price. The former embraces questions of when the
transaction was timed, how it was initiated, structured,
negotiated, disclosed to the directors, and how the
approvals of the directors and the stockholders were
obtained. The latter aspect of fairness relates to the
economic and financial considerations of the proposed
merger, including all relevant factors: assets, market
value, earnings, future prospects, and any other elements
that affect the intrinsic or inherent value of a company’s
stock. However, the test for fairness is not a bifurcated one
as between fair dealing and price. All aspects of the issue
must be examined as a whole since the question is one of
entire fairness.293

Entire fairness review calls upon the court to “carefully analyze the factual

circumstances, apply a disciplined balancing test to its findings, and articulate the

bases upon which it decides the ultimate question of entire fairness.”294 “Given the

293 In re Tesla Motors, Inc., S’holder Litig., 298 A.3d 667, 700 (Del. 2023) [hereinafter

“SolarCity III”] (quoting Weinberger v. UOP, Inc., 457 A.2d 701, 711 (Del. 1983)).
294 Id. (quoting Cinerama, Inc. v. Technicolor, Inc., 663 A.2d 1156, 1179 (Del. 1995)).

57
unitary nature of the test, findings in one area may seep into the findings of the other.

As a result, ‘a fair process usually results in a fair price.’ The opposite is also true:

‘an unfair process can infect the price.’”295

The Nile Parties bear the burden of proving the fairness of the Challenged

Transactions.296 The Nile Parties failed to prove that the Challenged Transactions

were the product of fair dealing or at a fair price.

a. Fair Dealing

“The element of ‘fair dealing’ focuses upon the conduct of the . . . fiduciaries in

effectuating the transaction.”297 When discussing fair process in SolarCity III, the

Delaware Supreme Court encouraged this court to focus on what it refers to as the

“Weinberger factors.”298 Those factors are “how the deal was initiated and timed, how

it was structured and negotiated, and how it was approved.”299 Those factors “form

the core of a court’s fair dealing analysis.”300

The first Weinberger factor “examines how the decision under challenge was

initiated.”301 The goal of the analysis is to determine whether the fiduciary timed the

295 Id. at 702 (alterations in original) (first quoting Ams. Mining, 51 A.3d at 1244,

then quoting Trados, 73 A.3d at 78).
296 Id. at 700–01.

297 Id. at 701 (quoting Kahn v. Tremont, 694 A.2d 422, 430 (Del. 1997)).

298 Id. at 702.

299 Id. (citing Weinberger, 457 A.2d at 711).

300 Id.

301 Frederick Hsu Living Tr. v. Oak Hill Cap. P’rs III, L.P., 2020 WL 2111476, at *36

(Del. Ch. May 4, 2020).

58
proposal opportunistically in some way.302 Seruma timed his transfer of Mpala to

occur before the Restructuring Transaction, which allowed him to claim that the

parties envisioned a 60/40 split in KN Agri between NGFF and Kuramo after the

Restructuring Transaction—a split where NGFF either was Seruma’s entirely, or

where he beneficially owned a majority interest.

The next Weinberger factor examines how the transaction was negotiated and

structured. Here, there was no negotiation concerning the events that ultimately led

Seruma to claim a 60/40 split. Seruma claims that Kuramo agreed to him moving

Mpala and to the 60/40 split, but there is no evidence of that fact. The evidence is

directly to the contrary. In fact, Kuramo and Seruma had specifically negotiated for

Mpala to be ring-fenced from Kuramo’s assets because Kuramo did not want its

investment diluted from an in-kind contribution, the value of which Kuramo did not

trust. Instead of abiding by that negotiated solution, Seruma ignored it and decided

to contribute Mpala to NGFF.

The last Weinberger factor examines how the transaction was structured and

approved. “Whether a transaction was structured to include procedural protections—

such as requiring the approval of an independent board negotiating committee or a

majority of the minority vote—is another important indicium of fairness.”303

302 In re BGC P’rs, Inc. Deriv. Litig., 2022 WL 3581641, at *18 (Del. Ch. Aug. 19, 2022)

(“The . . . initiation of a transaction can evidence a lack of fair dealing where it favors
the controller to the minority’s detriment.” (citation omitted)), aff’d, 303 A.3d 337
(Del. 2023) (TABLE).
303 Id. at *19 (collecting cases).

59
Here, there was no independent structure or approval process. To the contrary,

Seruma executed the Challenged Transactions unilaterally and told Kuramo that he

had or was taking certain actions, while doing just the opposite. For example,

Seruma moved his Mpala asset to NGFF even though he had negotiated with Kuramo

that his personal asset would stay in KN Agri Series C to avoid being co-mingled with

Kuramo’s assets.

Seruma argues that the Challenged Transactions were “approved by Feronia

Inc.’s independent directors with the advice of counsel, implemented by an

independent Proposal Trustee, and approved by a Canadian Bankruptcy Court.”304

But again, that approval concerned the integrity of the process vis-á-vis the debtor

and its creditors. Neither Kuramo, nor any person or body acting on Kuramo’s behalf,

approved the Challenged Transactions.

b. Fair Price

“In the fair price analysis, the court looks at the economic and financial

considerations of the transaction to determine if it was substantively fair.”305 “Fair

price and fair value standards call for equivalent economic inquiries.”306 “The fair

price aspect of the entire fairness test, however, is not in itself a remedial

calculation.”307 “Instead of picking a single number, the court’s task is ‘to determine

304 Nile Post-Trial Answering Br. at 77–78.

305 Ravenswood Inv. Co., L.P. v. Est. of Winmill, 2018 WL 1410860, at *13 (Del. Ch.

Mar. 21, 2018) (citation omitted).
306 Tornetta v. Musk, 310 A.3d 430, 533 (Del. Ch. 2024) (citation omitted).

307 Id. (citation and internal quotation marks omitted).

60
whether the transaction price falls within a range of fairness.’”308 The fair price

aspect of the entire fairness standard involves consideration of “all relevant factors”

and may encompass “proof of value by any techniques or methods which are generally

considered acceptable in the financial community.”309

“[P]rocess can infect price.”310 And “where the pricing terms of a transaction

that is the product of an unfair process cannot be justified by reference to reliable

markets or by comparison to substantial and dependable precedent transactions, the

burden of persuading the court of the fairness of the terms will be exceptionally

difficult.”311

To demonstrate fair price, Seruma argues that “[t]he value of Mpala has been

independently appraised and independently audited multiple times by multiple

parties.”312 This approach is slightly misguided, because the parties expressly agreed

that Kuramo would not be diluted by Mpala.

308 In re Tesla Motors, Inc. S’holder Litig., 2022 WL 1237185, at *39 [hereinafter

“SolarCity II”] (quoting In re Dole Food Co., Inc. S’holder Litig., 2015 WL 5052214,
at *33 (Del. Ch. Aug. 27, 2015)), aff’d, 298 A.3d 667 (Del. 2023).
309 Weinberger, 457 A.2d at 713; accord SolarCity II, 2022 WL 1237185, at *32.

310 SolarCity III, 298 A.3d at 733 (quoting Reis, 28 A.3d at 467).

311 Valeant Pharms. Int’l v. Jerney, 921 A.2d 732, 748–49 (Del. Ch. 2007); see also In

re Loral Space and Comm’ns Inc., 2008 WL 4293781, at *22 (Del. Ch. Sept. 19, 2008)
(“When the process used involves no market check and the resulting transaction is a
highly unusual one impossible to compare with confidence to other arms-length
transactions, the court is left with no reasoned basis to conclude that the outcome
was fair.”).
312 Nile Post-Trial Opening Br. at 34. Seruma adds that the Canadian Bankruptcy
Court “already adjudicated that the price was fair.” Nile Post-Trial Answering Br. at
79. But the Canadian Bankruptcy Court was not making any determination as to
Mpala.

61
This approach does not work for another reason—Seruma failed to prove the

value of Mpala. Seruma points to (i) the Barfric valuation,313 (ii) the MAMM audit

report,314 (iii) the Cohen & Co. audit statement,315 and (iv) the BDO valuation.316

And each of these pieces of evidence proved unreliable for the reasons stated

above.317

Accordingly, even if the value of Mpala could demonstrate fair price, the Nile

Parties failed to prove that Mpala was worth approximately $20 million.

For these reasons, the Nile Parties failed to prove the fairness of the

Challenged Transactions. Kuramo is entitled to judgment in its favor.

2. Fraud

Kuramo repackages its claim for breach of fiduciary duty as a claim for fraud,

but this legal theory seems largely duplicative of Kuramo’s claims for breach of

fiduciary duty. Because Kuramo prevailed on its claims for breach of fiduciary duty,

the court need not reach the fraud claim.

313 JX-1681 at 2 (Barfric Valuation Report).

314 JX-275 at 29–31 (MAMM Audit Report).

315 JX-273 at 3 (Cohen Valuation Memo).

316 JX-1679 at 18, 31 (July 2021 Mpala Limited Equity Valuation Report).

317 See Factual Background § D.1. Kuramo and the DFI Lenders both did not believe
that Mpala was worth $20.2 million. See Trial Tr. at 149:19–151:24 (Pallan) (stating
Seruma provided Kuramo with no relevant information supporting his valuation for
Mpala despite Kuramo’s repeated asks); JX-1479 at 1 (“The information you sent (the
investment teaser/the ‘valuation’ by Cohen & Co) do not match. A 4,000 ha farm in
an early development stage does not have a value of 22 MM USD. We would be
grateful if you could provide an independent valuation for your investment in KN
Agri and explain once again why and how this was assigned by L & E Seruma from
KN Agri to NGFF.”).

62
3. Breach Of Contract

A party seeking to enforce a contract must prove each element of its breach of

contract claim by a preponderance of the evidence.318 Under Delaware law, the

elements of a breach of contract claim are: a contractual obligation; a breach of that

obligation; and a resulting damage.319

The court’s task is to interpret the contract in a way that effectuates the

parties’ intent.320 Absent ambiguity, the court “will give priority to the parties’

intentions as reflected in the four corners of the agreement, construing the agreement

as a whole and giving effect to all its provisions.”321 The contract terms will be given

“plain, ordinary meaning.”322 “[T]he meaning which arises from a particular portion

of an agreement cannot control the meaning of the entire agreement where such

318 Dermatology Assocs. of San Antonio v. Oliver St. Dermatology Mgmt. LLC, 2020

WL 4581674, at *19 n.214 (Del. Ch. Aug. 10, 2020); Braga Invs. & Advisory, LLC v.
Yenni Income Opportunities Fund I, L.P., 2020 WL 3042236, at *8 (Del. Ch. June 8,
2020); Simon-Mills II, LLC v. Kan Am USA XVI Ltd. P’ship, 2017 WL 1191061, at
*36 (Del. Ch. Mar. 30, 2017); Zimmerman v. Crothall, 62 A.3d 676, 691 (Del. Ch.
2013); 23 Williston on Contracts § 63:14 (4th ed. May 2023 update).
319WaveDivision Hldgs., LLC v. Millennium Digit. Media Sys., L.L.C., 2010 WL
3706624, at *13 (Del. Ch. Sept. 17, 2010) (citing H–M Wexford LLC v. Encorp, Inc.,
832 A.2d 129, 140 (Del. Ch. 2003)).
320 E.g., Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728, 739 (Del. 2006).

321 In re Viking Pump, Inc., 148 A.3d 633, 648 (Del. 2016) (quoting Salamone v.
Gorman, 106 A.3d 354, 368 (Del. 2014)).
322 Alta Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381, 385 (Del. 2012) (citing City Inv.

Co. Liquid. Tr. v. Cont’l Cas. Co., 624 A.2d 1191, 1198 (Del. 1993)).

63
inference runs counter to the agreement’s overall scheme or plan.”323 The court must

“reconcile all the provisions of the instrument” if possible.324

a. The Amended Nile LLC Agreement

Kuramo claims that Seruma and Nile breached the implied covenant of good

faith and fair dealing of the Amended Nile LLC Agreement “through their

participation in the wrongful scheme” detailed in the amended complaint.325 In its

post-trial briefing, Kuramo noted that this claim was subordinate to its claim for

breach of fiduciary duty.326 Because Kuramo prevailed on its claims for breach of

fiduciary duty, the court need not reach this claim.

b. The 2020 Bridge Loan Agreement

Kuramo claims that KN Agri breached the 2020 Bridge Loan Agreement,

which required KN Agri to repay any outstanding loan within five business days of

Kuramo’s demand.327 KN Agri does not dispute that it failed to repay the loans, but

instead asks the court not to enforce the contract due to Kuramo’s conduct. KN Agri

advances two arguments.

323 E.I. du Pont de Nemours & Co., Inc. v. Shell Oil Co., 498 A.2d 1108, 1113 (Del.

1985) (citations omitted).
324 Elliott Assocs. v. Avatex Corp., 715 A.2d 843, 854 (Del. 1998) (citation omitted).

325 Am. Compl. ¶¶ 127–31; see Kuramo Post-Trial Opening Br. at 124.

326 Kuramo Post-Trial Answering Br. at 49.

327 Am Compl. ¶¶ 142–46; Kuramo Opening Post-Trial Br. at 130–31; JX-803 §1.1

(defining Maturity Date to include the Demand Date, defined as five business days
after repayment demand); id. §7.1 (requiring repayment on Maturity Date); JX-1265
at 3 (demand notice).

64
First, KN Agri argues that Kuramo should be estopped from enforcing the

agreement because it promised to convert the loan to equity.328 But promissory

estoppel is inapplicable “where a fully integrated, enforceable contract governs the

promise at issue.”329 The 2020 Bridge Loan Agreement granted Kuramo an

unconditional right to demand repayment. That contract governs.

Second, KN Agri argues that the contract must be voided because Kuramo and

Mafuta interfered with a transaction between KN Agri and a palm oil company,

Palmco, that would have allowed KN Agri to repay the loan within three months.330

Pallan did impede the deal, but credibly explained at trial that he viewed it as a bad

deal, which Seruma negotiated at a time when he was not empowered to act on behalf

of PHC or Feronia KNM.331 This is not a basis to void the 2020 Bridge Loan

Agreement.

Kuramo has proven that KN Agri breached the 2020 Bridge Loan Agreement.

328 Nile Post-Trial Opening Br. at 128–33.

329 SIGA Techs., Inc. v. PharmAthene, Inc., 67 A.3d 330, 348 (Del. 2013).

330 Nile Post-Trial Opening Br. at 128–33.

331 Trial Tr. at 480:18–481:6 (Pallan) (“We thought it was a terrible idea to -- the

company only had two clients at the time, was looking at a third, and we did not think
it was a good strategic idea to lock up production for a year, especially in an industry
that’s so volatile. So we did not think it was a good idea strategically. Second, Mr.
Seruma had no authority to bind the company with this contract. He was not director
general. He was representing he was the director general. And that was part of this
whole process for why he wanted to be director general so that this contract could be
validated.”); see JX-1410 at 1 (“Palmco is merely one example they are using to show
you - as director - were doing more than you should have been doing, which they may
technically be correct about.”).

65
4. Declaratory Judgment

Seruma’s fees have been advanced by NGFF.332 To cause NGFF to claw those

fees back, Kuramo seeks a declaration that Seruma is not entitled to indemnification

in connection with this litigation under the NGFF LLC Agreement.333

The NGFF LLC Agreement provides that indemnification is available “only if

the indemnified party or parties in good faith, acted or failed to act in a manner it

reasonably believed to be in, or not opposed to, the best interest of” NGFF.334 The

provision further provides that: “No indemnification may be made and each

indemnified party shall reimburse [NGFF] to the extent of any indemnification

previously made in respect of any claim, issue or matter as to which the indemnified

party shall have been adjudged to be liable for gross negligence, fraud, or willful

misconduct in the performance of its duties to [NGFF] unless, and only to the extent

that, the court in which such action or suit was brought determines that in view of

all the circumstances of the case, despite the adjudication of liability the indemnified

party is fairly and reasonably entitled to indemnity for those expenses which the

court deems proper.”335

This decision has found that Seruma breached his fiduciary duties through the

Challenged Transactions. These findings and holdings show that Seruma lacked

332 Dkt. 17 ¶ 153; Kuramo Post-Trial Opening Br. at 131 n.642.

333 Am. Compl. ¶¶ 152–56.

334 JX-1448 at 208–09.

335 Id.

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good faith when orchestrating the Challenged Transactions. “A failure to act in good

faith may be shown . . . where the fiduciary intentionally acts with a purpose other

than that of advancing the best interests of the [entity].”336 Here, Seruma acted to

promote his personal benefit—to offload his personal asset at a value he selected,

thereby claiming a majority stake in Kuramo’s investment.

Because Seruma did not act in good faith, he is not entitled to indemnification

from NGFF.337

B. The Nile Parties’ Claims Against Kuramo

The Nile Parties assert eleven counterclaims against Kuramo.338 They fall into

three general categories. First, the Nile Parties claim that Kuramo tortiously

336 In re Walt Disney Co. Deriv. Litig., 906 A.2d 27, 67 (Del. 2006) (quoting trial court).

337 Kuramo adds that the funds NGFF advanced to Seruma should be paid directly to

Kuramo. Kuramo Post-Trial Opening Br. at 132. Kuramo argues that a direct
payment is warranted because “Kuramo owns 95% of NGFF, and is withdrawing its
investment.” Id. In support, Kuramo points to In re Oxbow Carbon LLC Unitholder
Litigation for the proposition that a “‘two sided and zero sum’ paradigm warrants
looking through NGFF” but does not explain how the compensatory damages and
attorney’s fees issue in Oxbow relates to the facts here. Id. (quoting 2018 WL
3655257, *15 (Del. Ch. Aug. 1, 2018), vacated on other grounds sub nom. Oxbow
Carbon & Minerals Hldgs., Inc. v. Crestview-Oxbow Acq., LLC, 202 A.3d 482 (Del.
2019)). If a party that was advancing fees is not entitled to indemnification, then
that party must reimburse the entity that advanced the fees. Kuramo’s theory is that
because it has supplied 95% of NGFF’s funds, that means it is entitled to 95% of the
reimbursement. But that ignores standard indemnification practice. Even if there
was a good reason to depart from this standard practice, Kuramo has not provided a
compelling argument here.
338 The Nile Parties do not distinguish among the Kuramo entities when advancing

their arguments. See, e.g., Nile Post-Trial Opening Br. at 106–07 (arguing in
reference to their claim for breach of the Amended KN Agri LLC Agreement that “the
Kuramo Parties wrongfully exercised control over Feronia’s KNM property” and then
listing actions purportedly taken by “Kuramo Agri Vehicle (and the Kuramo Parties

67
interfered with its business relations and contracts, and relatedly committed civil

conspiracy. Second, they assert claims for breach of contract. Specifically, they claim

that Kuramo breached the KN Agri LLC Agreement, the NGFF LLC Agreement, the

Amended Nile LLC Agreement, and the Side Letter Agreement by prohibiting

Seruma from managing the entities in the way he saw fit. Third, they assert a claim

for promissory estoppel against Kuramo in connection with the 2020 Bridge Loan and

GenAfrica.

1. Tortious Interference And Civil Conspiracy

The Nile Parties claim that Kuramo tortiously interfered with their

contractual relations in five ways, all of which center on the February 2021 PHC

board meeting.339

To prevail on a claim of tortious interference with contractual relations, the

Nile Parties must prove five elements: “(1) a contract, (2) about which defendant

generally)”); id. at 109–10 (arguing in reference to their claim for breach of the NGFF
LLC Agreement that “Master Fund is a party” and that “[t]he Kuramo Parties have
wrongfully asserted control over [NGFF]” constituting breach). As a consequence,
the court’s analysis is similarly imprecise.
339 They argue that Kuramo wrongly interfered in their contractual relations by:

(1) threatening to withdraw its investment; (2) telling the PHC Chair that “Seruma
lacked authority to call a board meeting and that Kuramo Capital Management (not
KN Agri) was the controlling Feronia KNM stockholder”; (3) “calling an unauthorized
meeting of PHC’s board and falsely claiming that KCN had made ‘changes’ to Feronia
KNM’s leadership”; (4) telling PHC’s lenders that Kuramo owned 99.9% of KN Agri;
and (5) demanding the withdrawal of its money in NGFF before the lock-up period.
Id. at 98–99.

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knew, and (3) an intentional act that is a significant factor in causing the breach of

such contract, (4) without justification, (5) which causes injury.”340

“The tort of interference with contractual relations is intended to protect a

promisee’s economic interest in the performance of a contract by making actionable

‘improper’ intentional interference with the promisor’s performance.”341 “[S]ome

types of intentional interference with contractual relations are a legitimate part of

doing business.”342 So “[d]etermining when intentional interference becomes

improper requires a ‘complex normative judgment relating to justification’ based on

the facts of the case and ‘an evaluation of many factors.’”343

Kuramo argues that the Nile Parties’ claim for tortious interference fails

because it is asserted against contractual parties.344 “[A] party to a contract cannot

tortiously interfere with its own contractual relations.”345 To the extent the Nile

Parties advance their claim for tortious interference against contractual

counterparties for conduct governed by the contracts, then it does fail. But the Nile

340 Bhole, Inc. v. Shore Invs., Inc., 67 A.3d 444, 453 (Del. 2013) (emphasis in original)

(citation omitted).
341 Bandera Master Fund LP v. Boardwalk Pipeline P’rs, LP, 2019 WL 4927053, at

*25 (Del. Ch. Oct. 7, 2019) (quoting Shearin v. E.F. Hutton Gp., 652 A.2d 578, 589
(Del. Ch. 1994)).
342 Id. (quoting NAMA Hldgs., LLC v. Related WMC LLC, 2014 WL 6436647, at *26

(Del. Ch. Nov. 17, 2014)).
343 Id. (quoting Shearin, 652 A.2d at 589).

344 Kuramo Post-Trial Answering Br. at 78–79.

345 Renco Gp., Inc. v. MacAndrews AMG Hldgs. LLC, 2015 WL 394011, at *9 (Del. Ch.

Jan. 29, 2015) (citation omitted).

69
Parties do not state precisely against whom they assert each claim, which makes the

scope of this legal argument unclear.

Kuramo also argues that the Nile Parties’ claim for tortious interference fails

because Kuramo’s actions were justified. The court evaluates seven factors in

determining whether a party’s actions were justified: “(a) the nature of the actor’s

conduct, (b) the actor’s motive, (c) the interests of the other with which the actor’s

conduct interferes, (d) the interests sought to be advanced by the actor, (e) the social

interests in protecting the freedom of action of the actor and the contractual interests

of the other, (f) the proximity or remoteness of the actor’s conduct to the interference

and (g) the relations between the parties.”346

The Delaware Supreme Court in WaveDivision Holdings, LLC v. Highland

Capital Management, L.P. concluded that “[j]ustification does not require that the

defendant’s proper motive be its sole or even its predominate motive for interfering

with the contract. Only if the defendant’s sole motive was to interfere with the

contract will this factor support a finding of improper interference.”347 This is a

factually intensive analysis.348

346 WaveDivision Hldgs., LLC v. Highland Cap. Mgmt., L.P., 49 A.3d 1168, 1174 (Del.

2012) (quoting Restatement (Second) of Torts § 767 (1979)).
347 Id. (emphasis in original) (citing Hursey Porter & Assocs. v. Bounds, 1994 WL

762670, at *13 (Del. Super. Dec. 2, 1994); Restatement (Second) of Torts § 767 cmt. d).
348 Bandera, 2019 WL 4927053, at *26. Bhole describes the lack of justification as an
element of a claim for tortious interference. 67 A.3d at 453. That suggests that the
claimant bears the burden of proof. WaveDivision describes justification as a
“defense.” 49 A.3d at 1174. That suggests that the defendant bears the burden of
proof. The parties did not brief this issue. This decision takes the practical approach
of assuming that Kuramo bore the burden of proof, which Kuramo carried.

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Kuramo’s conduct in connection with the February 2021 PHC board meeting

was justified. At the time of the February 2021 PHC board meeting, Kuramo had

just discovered that its purported fiduciary was working against its interests.

Kuramo’s conduct was defensive—it sought to prohibit immediate damage from being

done. Kuramo’s motive was to protect its investment from a perceived threat.

Kuramo took immediate steps to stop Seruma from running away with its

investment. And the steps it took were those actions it reasonably believed were

necessary to secure its investment. The Nile Parties’ claim for tortious interference

with its contractual relations therefore fails.

The Nile Parties also seem to advance the theory that Kuramo tortiously

interfered with their prospective business relationships. On this point, they argue

that “Feronia KNM would have been able to complete a series of restructuring

agreements and negotiated [sic] with PHC’s senior lenders” absent Kuramo’s tortious

interference.349

Tortious interference with prospective business relations requires the showing

of four elements: “(1) a reasonable probability of a business opportunity;

(2) intentional interference by a defendant with that opportunity; (3) proximate

causation; and (4) damages.”350 “The tort is unusual, in that its application, even if

these elements are met, is circumscribed by consideration of competing rights. Thus,

349 Nile Post-Trial Opening Br. at 102.

350 Beard Rsch., Inc. v. Kates, 8 A.3d 573, 608 (Del. Ch. 2010) (citation omitted).

71
the elements of the tort must be considered in light of a defendant’s privilege to

compete in a lawful manner.”351

In evaluating whether a defendant can claim the privilege to compete, the

court evaluates the defendant’s conduct under Restatement (Second) of Torts § 768.

Specifically, “[t]o excuse liability, § 768 of the Restatement requires that: (a) the

relation concerns a matter involved in the competition between the actor and the

other and (b) the actor does not employ wrongful means and (c) his action does not

create or continue an unlawful restraint of trade and (d) his purpose is at least in part

to advance his interest in competing with the other.”352 In evaluating whether the

defendant employed wrongful means, the court evaluates the defendant’s conduct

under the same rubric it employs for evaluating the justification element in a tortious

interference with contractual relations claim.353

“The tort may implicate free speech rights as well; that is to say, a person may

be permitted to air a grievance or state an opinion, which may have the effect of

harming another’s business relationship, but which does not amount to tortious

interference.”354

The Nile Parties’ claim for tortious interference with prospective business

relations fails for lack of proximate cause. After Kuramo terminated the Amended

351 Preston Hollow Cap. LLC v. Nuveen LLC, 2020 WL 1814756, at *12 (Del. Ch. Apr.

9, 2020) (citations omitted).
352 Id. at *17 (quoting Restatement (Second) of Torts § 768).

353 Id.; see WaveDivision, 49 A.3d at 1174 (citing Restatement (Second) of Torts § 767)).

354 Preston Hollow, 2020 WL 1814756, at *12 (citation omitted).

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Nile LLC Agreement, the DFI Lenders attempted to salvage the deal. In that effort,

the DFI Lenders reached out to Seruma and asked if he would be interested in

continuing with the Restructuring Transaction. After Seruma was unable to answer

a series of questions the DFI Lenders posed to him, Seruma became hostile to the

DFI Lenders, and they determined that they could not work with Seruma. It was

Seruma’s non-responsiveness and hostility to the DFI Lenders that ended his

prospective business relationship, not any action by Kuramo.355 The Nile Parties’

claim for tortious interference with prospective business relations thus fails.

Related to the claim for tortious interference, Seruma alleges that “[t]he

Kuramo Parties, including KCM’s CEO Adeosun and COO Pallan, have conspired

among themselves and with non-party Mafuta by entering into an unlawful

agreement to tortiously interfere with the Nile Parties’ contracts, business relations,

and business expectancies, and to defraud PHC’s Board and lenders.”356

“Civil conspiracy is not an independent cause of action; it must be predicated

on an underlying wrong.”357 “Thus, if plaintiff fails to adequately allege the elements

of the underlying claim, the conspiracy claim must be dismissed.”358 Here, the Nile

355 See Factual Background § E.

356 Am. Countercl. ¶¶ 112–17.

357 Kuroda v. SPJS Hldgs., L.L.C., 971 A.2d 872, 892 (Del. Ch. 2009) (citing Ramunno

v. Cawley, 705 A.2d 1029, 1039 (Del. 1998)).
358 Id. (citing Transched Sys. Ltd. v. Versyss Transit Solutions, LLC, 2008 WL 948307,

at *4 (Del. Super. Apr. 2, 2008) (“To succeed on a claim of civil conspiracy Plaintiff
must first have a valid underlying claim.”); Interim Health Care v. Fournier, 1994 WL
89007, at *8 n. 18 (Del. Ch. Feb. 28, 1994)).

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Parties’ claim for civil conspiracy is predicated on their claim for tortious interference,

which, as stated above, fails. The Nile Parties’ civil conspiracy counterclaim thus

fails for lack of a valid predicate.

2. Breach of Contract

The Nile Parties claim that Kuramo breached the Amended KN Agri LLC

Agreement and the NGFF LLC Agreement by asserting de facto control over the PHC

investment as a non-managing member. They claim that Kuramo breached the Side

Letter Agreement by failing to defer to Seruma’s instructions. And they claim that

Kuramo breached non-disparagement, non-compete, and nomination provisions of

the Amended Nile LLC Agreement in myriad ways.

A party seeking to enforce a contract must prove each element of its breach of

contract claim by a preponderance of the evidence.359 “Under Delaware law, the

elements of a breach of contract claim are: 1) a contractual obligation; 2) a breach of

that obligation by the defendant; and 3) a resulting damage to the plaintiffs.”360

The court’s task is to interpret the contract in a way that effectuates the

parties’ intent.361 Absent ambiguity, the court “will give priority to the parties’

intentions as reflected in the four corners of the agreement, construing the agreement

359 Dermatology Assocs. of San Antonio, 2020 WL 4581674, at *19 n.214; Braga Invs.

& Advisory, LLC, 2020 WL 3042236, at *8; Simon-Mills II, LLC, 2017 WL 1191061,
at *36; Zimmerman, 62 A.3d at 691; 23 Williston on Contracts § 63:14.
360 WaveDivision, 2010 WL 3706624, at *13 (citing H–M Wexford LLC v. Encorp, Inc.,

832 A.2d at 140).
361 E.g., Lorillard Tobacco Co., 903 A.2d at 739).

74
as a whole and giving effect to all its provisions.”362 The contract terms will be given

“plain, ordinary meaning.”363 “[T]he meaning which arises from a particular portion

of an agreement cannot control the meaning of the entire agreement where such

inference runs counter to the agreement’s overall scheme or plan.”364 The court must

“reconcile all the provisions of the instrument” if possible.365

a. Amended KN Agri LLC Agreement And NGFF LLC
Agreement

Kuramo is a non-managing member under the Amended KN Agri LLC

Agreement and the NGFF LLC Agreement. The Amended KN Agri LLC Agreement

provides that non-managing members have “no authority or right to act on behalf of

[KN Agri] or any Series in connection with any matter.”366 The NGFF LLC

Agreement similarly states that “[n]o Member shall . . . be permitted to take part in

the management or control of the business or affairs of the Company . . . .”367 The

NGFF LLC Agreement expressly forbids a non-managing member from “hav[ing] any

voice in the management or operation of any Company property.”368

362 Viking Pump, 148 A.3d at 648 (quoting Salamone, 106 A.3d at 368).

363 Alta Berkeley VI C.V., 41 A.3d at 385 (citing City Inv. Co. Liquid. Tr., 624 A.2d at

1198).
364 E.I. du Pont de Nemours & Co., 498 A.2d at 1113.

365 Elliott Assocs., 715 A.2d at 854.

366 Am. KN Agri LLC Agr. § 2.1.

367 JX-1448 at 209.

368 Id. at 209–10.

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The Nile Parties claim that Kuramo exceeded its non-managing member

status, and breached the Amended KN Agri LLC Agreement and NGFF LLC

Agreement, by “falsely claim[ing] to PHC’s board that [Kuramo is a] ‘shareholder[]’

of Feronia KNM due to Kuramo Agri Vehicle’s KN Agri Series B investment, and that

[Kuramo] control[s] Feronia KNM.”369 The Nile Parties claim that “[t]he Kuramo

Parties have wrongfully asserted control over [NGFF] property, including KN Agri

and its wholly-owned subsidiary Feronia KNM, in breach of the Nile Global Fund

Agreement.”370 In their answering brief, the Nile Parties argue that Kuramo

breached these provisions by wrongfully “exercis[ing] de facto control over PHC.”371

Kuramo responds to these claims by admitting that “Kuramo has been closely

involved in managing the PHC investment over the past two years.”372 Indeed, they

note that they were “always closely involved in the management of the PHC

investment, and always with Seruma’s knowledge, consent and participation.”373 The

agreements under which the Nile Parties claim breach were in place for years prior

to the parties’ dispute. “During those years, Seruma never took the position that the

parties’ agreements barred Kuramo from playing its highly-active role (of which, of

369 Nile Post-Trial Opening Br. at 106–07.

370 Id. at 110.

371Nile Post-Trial Answering Br. at 64; see id. at 4 (citing Trial Tr. at 466:6–7
(Pallan)).
372 Kuramo Post-Trial Answering Br. at 76.
This admittedly runs somewhat contrary
to Kuramo’s argument that Seruma was the sole human controller. But it does not
undermine that argument. Seruma can control the entities as to the bulk of the
Challenged Transactions although Kuramo actively participated in discrete events.
373 Id. (emphasis original).

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course, Seruma was fully aware).”374 Kuramo argues that, to the extent the

agreements at issue foreclose its involvement with PHC, they were modified by the

parties’ course of conduct.375

“[A] court may find that the parties modified their obligations orally, by

conduct, or through waiver.”376 This is so notwithstanding a contractual provision

to the contrary.377 But in order to find that a contract was modified by conduct,

despite a provision requiring written modifications, the plaintiff bears a “high

evidentiary burden” to show with “specificity and directness” that the parties

intended to modify the contract through their course of conduct.378

Kuramo has met that burden here. Kuramo brought the Nile Parties into the

PHC investment.379 As part of the investment that Kuramo sourced, Kuramo

negotiated that the Consortium would have three board seats on Feronia’s board—

374 Id. at 77 (underline original).

375 Id. at 77–78.

376 See XRI Inv. Hldgs. LLC v. Holifield, 283 A.3d 581, 659 (Del. Ch. 2022), aff’d in

part, rev’d on other grounds, 304 A.3d 896 (Del. 2023); see also Cont. Ins. Co. v.
Rutledge & Co., Inc., 750 A.2d 1219, 1229 (Del. Ch. 2000) (“[I]t is settled law that
contract provisions deeming oral modifications unenforceable can be waived orally or
by a course of conduct just like any other contractual provision.” (citing Pepsi–Cola
Bottling Co. of Asbury Park v. Pepsico, Inc., 297 A.2d 28 (Del. 1972))).
377 See XRI Inv. Hldgs., 283 A.3d at 659 (stating that waiver may apply
notwithstanding a contractual provision “that states that no party can waive any
rights under an agreement, a court may find that a right has been waived”).
378 Cont. Ins. Co., 750 A.2d at 1230; see Rexnord Indus., LLC v. RHI Hldgs., Inc., 2008

WL 4335871, at *8 (Del. Super. Sept. 17, 2008) (finding that the parties did not modify
their contract through their course of conduct because they had previously reduced
their modifications to writing).
379 Factual Background § A.4.

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one for Kuramo, one for Nile, and one for Mafuta.380 In relevant part, Seruma acceded

to the Consortium members’ involvement.381

As part of the Restructuring Transaction, Seruma asked the Consortium if he

could be appointed executive chairman and run the transaction, which the

Consortium agreed to.382 In the draft resolution appointing Seruma executive

chairman, it stated that he would also be appointed CEO.383 Pallan informed Seruma

and counsel that this is not what the parties agreed to, and Seruma made the

necessary remedial changes.384

Following the Restructuring Transaction, Adeosun emailed Seruma the

proposed Feronia KNM and PHC governance structure, which proposed Adeosun be

appointed chair of Feronia KNM, Seruma be appointed executive vice chair of Feronia

KNM, and Mpinga be appointed CEO of PHC.385 In Seruma’s email response in

opposition to Adeosun’s governance proposal, Seruma acknowledged the active role

Kuramo has played. Specifically, Seruma responded back to Adeosun and stated: “I

am the Fund Manager of KN/NGFF and Kuramo will no longer put investments in

my Fund or have any management decision/input to the Fund or its investments.

380 Am. KKM Shareholders’ Agr. § 6.2.3.

381 Factual Background § B.2; see, e.g., JX-111 at 4 (Seruma: “This email outlines the

KKM proposal for your review, comments or suggestions.”); Trial Tr. at 51:5–55:24
(Pallan).
382 Trial Tr. at 139:2–24 (Pallan).

383 JX-501 at 4.

384 JX-502 at 1; JX-503 at 1; JX-504 at 1; see JX-507 at 1.

385 JX-1187 at 2.

78
Kuramo investments in my fund or involvement in my fund decisions have created

significant harm to my track record, business and I will not accept any future

involvement.”386 That is, Seruma acknowledged that Kuramo had been involved in

KN Agri and NGFF management decisions.

Accordingly, Kuramo has proven that the parties intended, by their conduct,

to modify the agreements to allow for Kuramo’s involvement in Seruma’s

management decisions. Although Seruma ultimately took issue with Kuramo’s level

of involvement, for the years the parties worked amicably together, he consented to

Kuramo’s more-than-passive level of involvement.

The Nile Parties argue that the agreements were not modified through the

parties’ course of conduct because “the parties have previously amended the

agreements in writing.”387 They do not explain the legal effect of this factual assertion

given the evidence of the parties’ course of conduct. They also have not proven the

factual basis for the argument. Although they do not point to which agreements

support their theory, the only written amendments in the record, the Amended KN

Agri LLC Agreement and the Second Amended NGFF LLC Agreement, were only

signed by Seruma.388 So the Nile Parties’ argument fails.

386 JX-1196 at 1; see JX-985 at 12:17–20 (Seruma telling Pallan: “I have had a
situation where my fund -- you know, you guys have been pretty much running my
fund indirectly and, you know, it gets to a stage where you just kind of continue going
on like that.”).
387 Nile Post-Trial Answering Br. at 52 n.239 (“The standard is even higher where, as

here, the parties have previously amended the agreements in writing.” (citation
omitted)).
388 JX-1274 at 38; JX-1448 at 259.

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The Nile Parties have not proven that Kuramo breached the Amended KN Agri

LLC Agreement or the NGFF LLC Agreement.

b. Side Letter Agreement

The Nile Parties allege that Kuramo breached the Side Letter Agreement by

“fail[ing] to defer to [NGFF]’s binding instructions with respect to KKM and

KKM2.”389 The Nile Parties point to three instances when Kuramo supposedly

ignored Seruma’s instructions.

First, on February 9, 2021, Adeosun and Mpinga sent a letter to the chair of

PHC as “the 99% beneficial owners of Feronia KNM, the entity owning the shares of

Feronia Maia, and as the previous owners of the KKM controlling entity,” to inform

the chair that Seruma’s proposed nomination “is an unauthorized action.”390 The Nile

Parties argue that this letter breached the Side Letter Agreement because Seruma

had decided to nominate himself as DG of PHC and “Kuramo II GP did not have the

contractual right to override that decision.”391

Second, on April 16, 2021, Straight KKM 2 Limited filed suit against Seruma,

KN Agri, Feronia KNM SARL, the Nile Parties’ law firm (DLA Piper), and others,

claiming that the defendants breached the Support Agreement and Purchase

Agreement, and that the defendants violated the Canadian Bankruptcy Court’s

389 Am. Countercl. ¶¶ 133–36; Nile Parties’ Post-Trial Opening Br. at 114.

390 JX-1249 at 3.

391 Nile Post-Trial Opening Br. at 114–15.

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vesting order by “not constituting Feronia KNM SARL as a wholly-owned affiliate of

Straight KKM 2 Limited.”392

Third, the Nile Parties argue that “Adeosun and Pallan have also claimed to

represent KKM and KKM2 and have voted to create a ‘special committee’ of the KKM

Board—all against [NGFF]’s express instructions.”393

The Side Letter Agreement addresses voting. That is because the purpose of

the agreement was to align Kuramo and Nile in actions in relation to the third

member of the consortium, Mafuta.394 In relevant part, the Side Letter Agreement

states:

1) Kuramo and Nile shall agree unanimously on all voting
matters relating to the business of KKM and KKM2

2) In cases, where such agreement is not reached, Nile’s
instructions shall take precedence and be binding on
Kuramo395

Neither the first nor the second challenges address “voting matters.” As

alleged, there was no vote. The Side Letter Agreement, therefore, does not apply to

the first or second challenged actions. The third challenge appears to deal with a

voting matter, but not one that was developed factually. In briefing, the Nile Parties

support the argument by referring back to the factual background.396 Their factual

392 JX-1517 at 1, 4.

393 Nile Post-Trial Opening Br. at 115.

394 See JX-53 at 1–2.

395 Side Letter Agr. at 2 (emphasis added).

396 Nile Post-Trial Opening Br. at 115 n.562 (citing “Facts, Sections H.3-H.4”).

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recitation, however, does not discuss the factual basis for the third challenge. It does

not appear anywhere in briefing.

The Nile Parties have not proven Kuramo breached the Side Letter Agreement.

c. Amended Nile LLC Agreement

The Nile Parties claim that Kuramo breached the non-disparagement

provision of the Amended Nile LLC Agreement by stating, in or around February

2021, that Seruma engaged in illegal or unethical behavior.397 They also claim that

Kuramo breached the non-compete and nomination provisions of the Amended Nile

LLC Agreement by appointing a non-Nile entity (Nabo Capital Limited) to manage a

fund Seruma was contractually entitled to manage (GenAfrica), thereby prohibiting

Seruma from the investment manager fees he was owed.398

As to the claim for breach of the non-disparagement clause, Kuramo advances

two arguments. Kuramo first argues that it did not breach the non-disparagement

clause because that clause “applies only ‘during and after the termination’ of the

397 Am. Countercl. ¶¶ 129–32; Nile Post-Trial Opening Br. at 112 (“[(1)] misinformed

PHC’s Chairman that Seruma abused his position by taking ‘unauthorized action,’
despite knowing he had done no such thing; [(2)] misrepresented to PHC’s board that
Feronia KNM’s stockholders had ‘withdrawn [their] confidence’ in Seruma, when
Adeosun could not speak on behalf of these stockholders; and [(3)] accused Seruma
of ‘appalling’ acts of misconduct in his capacity as investment manager in a letter to
PHC’s investors and lenders, despite knowing this was a fabrication to get him
deported.”).
398 Nile Post-Trial Opening Br. at 113 (“Kuramo Capital Management repeatedly

breached both of the exclusivity and non-compete provisions, including by (i) failing
to make Nile Capital the manager of Fund III’s GenAfrica investment, (ii) naming a
different manager (Nabo Capital Limited) to manage GenAfrica in Nile Capital
Management’s rightful place, and (iii) managing GenAfrica themselves.”).

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Agreement.”399 Kuramo sent the notice of termination on February 10, 2021.400 The

allegedly disparaging statements occurred on February 9 and 15, 2021.401 It appears

that at least some of the allegedly defamatory statements, however, were made before

Kuramo sent the termination notice. Thus, even if effective, this argument is limited

in scope.

Kuramo next argues that the Nile Parties’ claim fails because they do not

identify any harm or damages resulting from Kuramo’s disparaging statements.402

The Nile Parties claim that “the Kuramo Parties caused significant reputational

damage to the Nile Fund Parties by violating non-disparagement agreements.”403

They do not explain, or attempt to prove, any measure for these damages. Tacitly

acknowledging this weakness, the Nile Parties ask for injunctive relief. But they fail

to explain what form this would take. They neither brief nor argue the elements of a

399 Kuramo Post-Trial Answering Br. at 84–85 (quoting Am. Nile LLC Agr. § 13.8(c)

(“No Principal will, and each Principal will cause his or her affiliates not to, make or
cause to be made or condone the making of any statement, comment or other
communication, written or otherwise, that disparages in any material respect the
Company or any of its subsidiaries or affiliates or any of any [sic] of the products or
services of the Company or any of its subsidiaries or affiliates during and after the
termination date.”)).
400 JX-1270 at 2 (“This Letter is formal notice to Larry Seruma of the intention by

Kuramo Capital Management, LLC to immediately terminate the LLC Agreement.
Pursuant to the LLC Agreement, we require a full redemption of all our beneficially-
owned assets invested in, among other entities, [NGFF], and KN AGRI LLC.”); see
Trial Tr. at 280:22–283:2 (Pallan).
401 JX-1249 at 2; JX-1251 at 5; JX-1321 at 3.

402 Kuramo Post-Trial Answering Br. at 84–85.

403 Nile Post-Trial Opening Br. at 1.

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permanent injunction.404 They do not claim that any of the conduct is ongoing. It is

hard to know what to do with this request.

The Nile Parties have failed to prove their claim for breach of the non-

disparagement provision.

As to the claim for breach of the non-compete provision, Kuramo argues that

the provision does not apply to GenAfrica. The relevant language is in Section 7.4 of

the Amended Nile LLC Agreement, which provides:

Kuramo Capital Management LLC, affiliates or its
principals will not own or directly invest or own any
business entity in competition with the activities or
products of the Company. However, the Funds managed by
Kuramo may invest in business entities in Africa that
compete with the Company and the principals of Kuramo
will have an indirect ownership of business that compete
with the Company via such Fund ownership.405

The provision prohibits Kuramo from obtaining an ownership interest in “any

business entity in competition with the activities or products of the Company.” But

404 See id. at 112 (failing to assert specific harm).The Nile Parties also assert that
injunctive relief is warranted for the non-disparagement breach, but beyond using
the term “injunctive relief” the Nile Parties do not explain how they come close to
satisfying the elements for a permanent injunction. See Preston Hollow, 2020 WL
1814756, at *20 (“The elements for permanent injunctive relief are: (1) actual success
on the merits; (2) irreparable harm will be suffered if injunctive relief is not granted;
and (3) the harm that will result from a failure to enjoin the actions that threaten
plaintiff outweighs the harm that will befall the defendant if an injunction is
granted.” (quoting Sierra Club v. DNREC, 2006 WL 1716913, at *3 (Del. Ch. June 19,
2006), aff’d, 919 A.2d 547 (Del. 2007)).
405 Am. Nile LLC Agr. § 7.4.

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the Nile Parties did not show that GenAfrica competed with Nile.406 Accordingly,

they have not proven that Kuramo breached the non-compete provision.

Kuramo similarly argues that the nomination provision does not apply to

GenAfrica. Section 7.2(b) of the Amended Nile LLC Agreement prohibits Kuramo

from appointing advisors, other than Nile, to make investment decisions relating to

the management of public market funds. It requires that Kuramo:

Nominate the Company as the sole Sub-Advisor for the
public markets allocation of all future Funds and separate
accounts managed by Kuramo. The Company will be sole
advisor, sub adviser or entity to be allocated all the
investments, investment decisions relating [to] the
management of public markets investment funds, to
include but not limited to, equities and fix income, hedge
funds, alternative funds, mutual funds, or any other
investment product or strategy in the public markets for
which Kuramo directly has any control, discretion and/or
management control.407

The provision applies only to “investment decisions relating [to] the management of

public markets investment funds.” Seruma acknowledged GenAfrica was not a public

markets investment.408 Because the Nile Parties did not prove that GenAfrica was a

public markets investment, they have not proven that Kuramo breached the

nomination provision.

The Nile Parties have not proven that Kuramo breached the Amended Nile

LLC Agreement.

406 See Nile Post-Trial Opening Br. at 113–14; Nile Post-Trial Answering Br. at 67–

68.
407 Am. Nile LLC Agr. § 7.2(b).

408 JX-98 at 1.

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3. Promissory Estoppel

The Nile Parties assert promissory estoppel concerning the 2020 Bridge Loan

and GenAfrica.

“To state a claim for promissory estoppel, a plaintiff must prove by clear and

convincing evidence that: ‘(i) a promise was made; (ii) it was the reasonable

expectation of the promisor to induce action or forbearance on the part of the

promisee; (iii) the promisee reasonably relied on the promise and took action to his

detriment; and (iv) such promise is binding because injustice can be avoided only by

enforcement of the promise.’”409 “Promissory estoppel does not apply, however, where

a fully integrated, enforceable contract governs the promise at issue.”410

a. The 2020 Bridge Loan Agreement

The Nile Parties allege that Kuramo breached its promise to fund the entire

$15 million bridge loan as part of the May 22, 2020 Bridge Loan Agreement. 411 As

stated previously, the 2020 Bridge Loan Agreement fully governs the parties’

relationship. Accordingly, the promissory estoppel claim fails.

b. GenAfrica

The Nile Parties claim that Kuramo breached its promise to provide Seruma

with management rights and dividends in exchange for Seruma’s novation of his

409 Windsor I, LLC v. CWCapital Asset Mgmt. LLC, 238 A.3d 863, 876 (Del. 2020)

(quoting SIGA Techs., Inc. v. PharmAthene, Inc., 67 A.3d 330, 347–48 (Del. 2013)).
410 SIGA Techs., 67 A.3d at 348.

411 Am. Countercl. ¶¶ 161–65.

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interest in GenAfrica.412 Specifically, the Nile Parties assert that Kuramo refused to

pay dividends unless Seruma agreed to give up his management rights, contrary to

oral promises.413

Again, the Nile Parties fail to support their claim with sufficient proof. There

is no evidence of an oral promise.

For support, the Nile Parties rely on Seruma’s testimony, when he stated that:

“our expectation were [sic] when we novate our ownership into that vehicle, we will

be able to get an equity that’s proportioned to how much we invested but also reflected

our sweat equity in terms of getting this transaction to the end. And also our

expectations were that we are going to be the manager of GenAfrica going forward.”414

The court, however, gives little weight to Seruma’s testimony because of his conduct

detailed above. And his testimony is directly contradicted by Pallan,415 who was a

credible witness.

412 Id. ¶¶ 166–69.

413 Id.; Nile Post-Trial Opening Br. at 126 (asserting that “[a]fter [NGFF] (through

Seruma) invested in GenAfrica in 2018 pursuant to a Share Purchase Agreement,
Kuramo Capital Management made a promise: if [NGFF] novated its GenAfrica
interests to Kuramo Kenyan Fund, it would receive proportionate interests in
Kuramo Kenyan Fund in exchange (and receive its pro rata share of dividends) and
be appointed manager of the investment (with the right to receive management
fees)”); id. at 126–27 (“In reliance upon Kuramo Capital Management’s promise,
[NGFF] novated its GenAfrica interests to Kuramo Kenyan Fund.”).
414 Trial Tr. at 957:1–7 (Seruma).

415 Id. at 333:19–22 (Pallan). Kuramo’s CIO Shaka Kariuki testified to that same
effect. Id. at 1342:9–12 (Kariuki).

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The only other evidence on which the Nile Parties rely are two exhibits that do

not support their argument. The first exhibit is a chain of emails from September

2019 that show Kuramo distributed a portion of a dividend in a Kuramo fund (Kenya

III) from GenAfrica to Nile.416 The second exhibit is a chain of emails from October

2020 that show Kuramo told Seruma that GenAfrica had paid dividends to Kuramo’s

fund (Kenya III) in 2020, but that fund had not yet declared a dividend for 2019.417

The chain continues with an email from Pallan to Seruma stating: “Please remember

we are also awaiting your review and signature on the business plan and a couple

resolutions for GenA that are long outstanding.”418 In post-trial briefing, Seruma

argues that the resolutions were Kuramo trying to force him to sign away his

management rights in exchange for dividends, but the email chain does not support

that position. And neither Seruma, nor any witness, provided testimony concerning

that email chain.

The Nile Parties’ claims for promissory estoppel thus fail.419

416 JX-201 at 2.

417 JX-939 at 1.

418 Id.

419 The Nile Parties seek three declarations. First, the Nile Parties seek a declaration

that pursuant to the Canadian bankruptcy court sale order, Feronia KNM directly or
indirectly controls 76.17% of PHC’s Class A shares. Second, the Nile Parties seek a
declaration that Kuramo has “no right to exercise power and authority over the
operations of KN Agri or any of its Series Funds, or perform any acts or undertakings
on behalf of KN Agri or its Series Funds, and that KN Agri is controlled by its
managing member, [NGFF].” Third, the Nile Parties seek a declaration that Kuramo
cannot redeem its investments from NGFF before June 30, 2022. See Am. Countercl.
¶¶ 137–60. Kuramo does not respond to the Nile Parties’ requests for declaratory

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C. Remedies

Kuramo has proven that Seruma breached his duty of loyalty, KN Agri

breached the 2020 Bridge Loan Agreement, and Seruma is not entitled to

indemnification. Kuramo has not proven its remaining claims. The Nile Parties have

not proven any of their claims. Kuramo’s arguments for relief focus on the success of

its claim for breach of fiduciary duty, and this analysis follows suit.

“Once a fiduciary breach has been established, this court’s powers are complete

to fashion any form of equitable and monetary relief as may be appropriate.” 420

“Delaware law dictates that the scope of recovery for a breach of the duty of loyalty is

not to be determined narrowly.”421 “Damages must be ‘logically and reasonably

related to the harm or injury for which compensation is being awarded,’” 422 but “[a]s

long as there is a basis for an estimate of damages, and the plaintiff has suffered

harm, ‘mathematical certainty is not required.’”423 Any uncertainties in calculating

damages must be “resolved against the wrongdoer.”424

relief directly, but the claims appear to overlap with the claims for breach of contract
and breach of fiduciary duty and thus fail for the same reasons.
420 Dole, 2015 WL 5052214, at *44 (cleaned up).

421 Thorpe v. CERBCO, Inc., 676 A.2d 436, 445 (Del. 1996).

422 Dole, 2015 WL 5052214, at *44 (quoting In re J.P. Morgan Chase & Co. S’holder

Litig., 906 A.2d 766, 773 (Del. 2006)).
423 In re S. Peru Copper Corp. S’holder Deriv. Litig., 52 A.3d 761, 814 (Del. Ch. 2011)

(quoting Bomarko, Inc. v. Int’l Telecharge, Inc., 794 A.2d 1161, 1184 (Del. Ch. 1999),
aff’d, 766 A.2d 437 (Del. 2000)).
424 Thorpe v. CERBCO, Inc., 1993 WL 443406, at *12 (Del. Ch. Oct. 29, 1993) (citation

omitted); see also Dole, 2015 WL 5052214, at *46 (applying wrongdoer rule).

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Kuramo asks the court to order rescission by declaring that Feronia KNM “is

owned by KN Agri Series B, and that Seruma’s personal Mpala interests remain in

KN Agri Series C.”425 To Kuramo, this is the transaction the parties agreed to.426

Kuramo asserts that any other remedy would be “virtually impossible,” in part

because there is no way to value Mpala given the current record.427 Kuramo adds

that the court should declare Kuramo’s interest in NGFF redeemed, and should shift

“attorneys’ fees and management fees Seruma owes to NGFF.”428

The Nile Parties respond that Kuramo waived its ability to seek rescission by

not asserting it earlier,429 and ordinarily the court would agree. Here, however,

Seruma’s breaches of fiduciary duty require a remedy. And although “[i]t is a well-

established principle of equity that a plaintiff waives the right to rescission by

excessive delay in seeking it,” the underlying policy rationale is to discourage

plaintiffs from sitting back and waiting to see whether the defendants increase the

value of the disputed enterprise.430 This court has found that where there is no

improper conduct, no prejudice, and the delay is not unreasonable, then a plaintiff is

425 Kuramo Post-Trial Opening Br. at 142.

426 Id.

427 Id. at 143.

428 Id. at 144.

429 Nile Post-Trial Answering Br. at 90 n.441.

430 Ryan v. Tad’s Enter., Inc., 709 A.2d 682, 699 (Del. Ch. 1996) (citation omitted),

aff’d, 693 A.2d 1082 (Del. 1997) (TABLE).

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not barred from asserting rescission.431 Kuramo therefore did not waive its request

for rescission.

The remedy of rescission “restore[s] the parties substantially to the position

which they occupied before making the contract.”432 “Rescission ‘is not given for every

serious mistake and it is neither given nor withheld automatically, but is awarded as

a matter of judgment.’”433 The court has broad discretion to award recission where

the facts and circumstances warrant.434 This court has awarded rescission as a

remedy for breach of fiduciary duty, particularly in the context of self-dealing

431 In re Fuqua Indus., Inc., 2005 WL 1138744, at *7 (Del. Ch. May 6, 2005).

432 Craft v. Bariglio, 1984 WL 8207, at *12 (Del. Ch. Mar. 1, 1984) (citing Henry

Campbell Black, On Rescission and Cancellation § 616 (2nd ed.)); accord Geronta
Funding v. Brighthouse Life Ins. Co., 284 A.3d 47, 61 (Del. 2022) (“rescission results
in abrogation or unmaking of an agreement, and attempts to return the parties to the
status quo” (quoting Norton v. Poplos, 443 A.2d 1, 4 (Del. 1982)); Geronta Funding,
284 A.3d at 61 (“‘[E]quitable rescission offers a platform to provide additional
equitable relief, such as cancellation of a valid instrument—the formal annulment or
setting aside of an instrument or obligation.’” (quoting Ravenswood, 2018 WL
1410860, at *21)).
433 Gotham P’rs, L.P. v. Hallwood Realty P’rs, L.P., 817 A.2d 160, 174 (Del. 2002)

(quoting Gaffin v. Teledyne, Inc., 1990 WL 195914, at *16 (Del. Ch. Dec. 4, 1990), aff’d
in part and rev’d in part on other grounds, 611 A.2d 467 (Del. 1992)).
434 Id. at 164 (stating that whether to order rescission is within the discretion of the

Court of Chancery); see also Weinberger, 457 A.2d at 714 (“[T]he Chancellor’s powers
are complete to fashion any form of equitable and monetary relief as may be
appropriate.”); Int’l Telecharge, Inc. v. Bomarko, Inc., 766 A.2d 437, 440 (Del. 2000)
(“In determining damages, the powers of the Court of Chancery are very broad in
fashioning equitable and monetary relief under the entire fairness standard as may
be appropriate, including rescissory damages” (citations omitted)).

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transactions.435 The Delaware Supreme Court referred to recission as “the preferable

remedy” in Vickers for breach of fiduciary duty where one party has misled another.436

To be entitled to equitable rescission, a plaintiff must demonstrate that

rescission is both “reasonable and appropriate” under the circumstances.437 This

includes showing that it is possible for “all parties to the transaction [to] be restored

to the status quo ante, i.e., to the position they occupied before the challenged

transaction.”438

Kuramo has demonstrated that rescission is reasonable, appropriate, and

practicable. The transaction is relatively easy to “unscramble.”439 Seruma moved

Mpala through an accounting notation. He can move it back just as easily. The court

thus restores the parties to the bargain Seruma told Kuramo he was executing—

where Kuramo holds 97.16% of KN Agri Series B, and KN Agri Series B holds Feronia

435 See, e.g., eBay Domestic Hldgs., Inc. v. Newmark, 16 A.3d 1, 46 (Del. Ch. 2010)

(ordering rescission of a rights plan as a remedy for breach of fiduciary duty); Valeant,
921 A.2d at 752 (ordering rescission of a compensation plan where the defendants
“failed to show that the transaction was entirely fair” and it was “clear that he has
no right to retain any of the $3 million bonus he received”).
436 Lynch v. Vickers Energy Corp., 429 A.2d 497, 501 (Del. 1981) (describing rescission

as the “preferrable” remedy), overruled in part by Weinberger, 457 A.2d at 703–04
(“We therefore overrule [Vickers] to the extent that it purports to limit a stockholder's
monetary relief to a specific damage formula.”).
437 Lenois v. Lawal, 2017 WL 5289611, at *20 (Del. Ch. Nov. 7, 2017).

438 Strassburger v. Earley, 752 A.2d 557, 578 (Del. Ch. 2000) (emphasis in original)

(quoting Norton v. Poplos, 443 A.2d 1, 4 (Del. 1982); In Re MAXXAM, Inc., 659 A.2d
760, 775 (Del. 1995)).
439 See In re Sunbelt Beverage Corp. S’holder Litig., 2010 WL 26539, at *14 (Del. Ch.

Jan. 5, 2010) (declining to order rescission because the transaction was “too complex
to unscramble”).

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KNM, which holds the PHC asset. And that Mpala remains ring-fenced in KN Agri

Series C.440

III. CONCLUSION

Kuramo seeks other relief, but it is difficult to determine whether the

requested relief was fairly pled. For example, Kuramo seeks a declaration that its

“interest [is] redeemed.”441 Kuramo did not plead this request for relief in the

complaint or the amended complaint. It first appeared in Kuramo’s pre-trial brief.442

And the Nile Parties did not advance much of a defense to this request, except to say

(inaccurately) that the redemption value of Kuramo’s interest is $0. It is difficult to

know what to do with this.

Given this open issue, and the extensive scope of the issues raised and the

parties’ failure to join them in briefing, the parties are granted leave to submit letters

identifying any arguments or claims that they believe were fairly raised but that this

decision does not address. When doing so, the parties shall summarize the claim or

440 Kuramo requests attorney’s fees based on a version of the bad faith exception to

the American rule, which entitles litigants to their attorney’s fees incurred in
securing a clearly defined and established right. Kuramo Post-Trial Opening Br. at
145; McGowan v. Empress Ent., Inc., 791 A.2d 1, 4 (Del. Ch. 2000) (“A subset of this
‘bad faith’ exception is that attorneys’ fees may be awarded if it is shown that the
defendant’s conduct forced the plaintiff to file suit to secure a clearly defined and
established right.” (citation and internal quotation marks omitted)); Abex Inc. v. Koll
Real Estate Gp., Inc., 1994 WL 728827, at *20 (Del. Ch. Dec. 22, 1994) (“Actions by a
defendant which necessitate judicial intervention to secure a clearly defined and
established right, are evidence of bad faith.” (citing Judge v. City of Rehoboth Beach,
1994 WL 198700, at *2 (Del. Ch. Apr. 29, 1994))). The court does not shift fees lightly.
And the facts and circumstances of this case do not warrant it.
441 Kuramo Post-Trial Opening Br. at 144.

442 Dkt. 256 at 71.

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argument, identify where it was first raised, and where in the briefs and pleadings it

was developed. Each side shall have the opportunity to respond to the other’s

submission. The parties shall meet and confer on a schedule to bring this final round

of submissions to a close.

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