Majority Rules? Not Without Proper Notice

A recent Delaware Court of Chancery decision reminds us that control disputes are decided by process—not power.

In Diez Barroso v. Vasallo TV Group, C.A. No. 2025-0480-LWW (Del. Ch. Oct. 10, 2025), supermajority members attempted to (1) appoint new Managers by written consent and (2) remove the sitting CEO at a Management Committee meeting. They won on governance authority but lost on execution.

What the Court held:

➤ Which operating agreement governs? A circulated 2019 draft was never signed or adopted—so it didn't control. The Court applied the executed 2008 agreement, as modified by a 2012 settlement.

➤ Can Managers be appointed by written consent? Yes. Reading the agreement's provisions together, the Court held that written consent was a valid method for the majority to appoint Managers—the "annual meeting" clause was a default, not an exclusive path.

➤ Did the CEO removal stick? No. After the first meeting was adjourned for lack of quorum, a second meeting was convened minutes later—without the 10-day notice the governing agreement required. The resulting resolutions were defective, and the CEO stayed in place.

Practical takeaways for owners and counsel:

Define "the operative agreement"—and prove it. If amendments require signatures or consents, say so clearly and maintain a clean execution record. An unsigned draft, no matter how widely circulated, is not a governing document.
Align written-consent mechanics with appointment and removal provisions. Ambiguity between "general" consent rights and "specific" procedural sections invites costly litigation. Draft them to work together explicitly.

Treat notice as a deal term, not a formality. The Court called this result "hyper-technical"—and enforced it anyway. Spell out what happens when a meeting is adjourned and reconvened, and consider building in cure or ratification language so a procedural misstep doesn't undo a substantive decision.

The bottom line: a 65.8% supermajority had the right to take control—but lost on a five-minute procedural gap. Process is substance.