B.E. Capital Management Fund LP v. Fund.com Inc.

── B.E. Capital Management Fund LP v. Fund.com Inc. ── Court: Court of Chancery of Delaware Date: April 10, 2026 Category: General IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE B.E. CAPITAL MANAGEMENT ) FUND LP, ) ) Petitioner. ) ) v. ) C.A. No. 12843-JTL ) FUND.COM INC., ) ) Respondent. OPINION ADDRESSING OBJECTION TO SALE PROCESS AND REQUEST FOR STATUS QUO ORDER Date Submitted: April 7, 2026 Date Decided: April 10, 2026 Peter Lydon Sheeran, Jr., Pro se. Russell C. Silberglied, RICHARDS, LAYTON & FINGER P.A., Wilmington, Delaware; Receiver of Fund.com Inc. LASTER, V.C.  Fund.com Inc. (the “Company”) is a defunct corporation. The court originally appointed Thomas Braziel as receiver. After Braziel’s defalcations came to light, the court removed Braziel and imposed remedies against him. The court appointed a successor receiver (the “Receiver”) charged with maximizing the value of the Company’s assets for the benefit of its claimants, including both creditors and equity holders in order of priority. The Receiver is currently seeking to maximize the value of the Company’s claims against a company subject to liquidation in New Zealand (the “Assets”). The Receiver has constructed a sale process and permitted Braziel to participate as a potential buyer. Peter Lydon Sheeran, Jr. objects to Braziel’s participation. He seeks an order preventing the Receiver from permitting, soliciting, entertaining, or accepting any bid from Braziel and requiring any bidder to certify that it is not acting on behalf of, in concert with, or for the benefit of Braziel. Sheeran contends—and I credit for purposes of his objection—that Braziel has an informational advantage over other bidders concerning the Assets. Braziel was personally involved in procuring the Assets, and there are gaps in the due diligence information available to other bidders about some of the actions Braziel took that could affect the value of the Assets. Given his first-hand involvement, Braziel has superior knowledge about what he did and hence, as to those issues, can better assess risk than other bidders.  The Receiver argues that Sheeran lacks standing to sideline a competing bidder. In my view, Sheeran has standing to challenge the sale process from the standpoint of whether it can generate the best value for the Assets. This court’s analysis must start by determining the standard of review. If the order appointing a receiver specifies a standard of review, then that standard applies.1 Here, the court’s order appointing the Receiver did not specify a standard of review. The next consideration is the type of receiver. The State empowers some receivers to act by statute—the principal example is the Insurance Commissioner— warranting presumptively deferential review.2 When a court appoints a private individual to act as a receiver, however, the appointment is akin to empowering a special magistrate.3 The default standard of review is therefore de novo, particularly 1 See In re Dissolution of Jeffco Mgmt., LLC, 2021 WL 3611788, at *6 (Del. Ch. Aug. 16, 2021) (“Frequently, the applicable standard of review for a receiver’s decisions is reflected in the order appointing the receiver. . . . In the absence of a standard of review in the order appointing the receiver, this court has looked to the relevant statutes, rules, and case law for guidance.”), aff’d, 285 A.3d 125 (Del. 2022). 2 See Matter of Scot. Re (U.S.), Inc., 273 A.3d 277, 293 (Del. Ch. 2022) (“The parties broadly agree that an abuse of discretion standard governs the Commissioner’s request. Black letter authorities generally state that an abuse of discretion standard applies when a court re