Benchmark Investments LLC v. Pacer Advisors, Inc.

── Benchmark Investments LLC v. Pacer Advisors, Inc. ── Court: Supreme Court of Delaware Date: April 30, 2026 Category: General IN THE SUPREME COURT OF THE STATE OF DELAWARE BENCHMARK INVESTMENTS § LLC (d/b/a KELLY BENCHMARK § INDEXES), § No. 378, 2025 § Plaintiff Below, § Court Below: Superior Court Appellant, § of the State of Delaware § v. § C.A. No. N23C-03-171 § PACER ADVISORS, INC., § § Defendant Below, § Appellee. § Submitted: February 4, 2026 Decided: April 30, 2026 Before SEITZ, Chief Justice; VALIHURA, TRAYNOR, LEGROW, and GRIFFITHS, Justices, constituting the Court en Banc. Upon appeal from the Superior Court. REVERSED AND REMANDED. Elizabeth A. Sloan, Esquire, Emily C. Friedman, Esquire, BALLARD SPAHR LLP, Wilmington, Delaware; Gregory M. Williams, Esquire, (argued), Jacquelyn E. Fradette, Esquire, SIDLEY AUSTIN LLP, Washington, D.C., for Plaintiff Below, Appellant Benchmark Investments LLC. Michael W. McDermott, Esquire, (argued), David B. Anthony, Esquire, Zachary J. Schnapp, Esquire, BERGER MCDERMOTT LLP, Wilmington, Delaware, for Defendant Below, Appellee Pacer Advisors, Inc. SEITZ, Chief Justice: Benchmark Investments, LLC hired Pacer Advisors, Inc. to serve as an investment advisor and servicer for Benchmark’s exchange-traded funds. Section 6(c)(i) of their agreement gave Benchmark a without-cause termination right at the end of the term after written notice to Pacer. Also, under Section 6(c)(ii), Benchmark could notify Pacer of “its intent to terminate the Agreement in accordance with sub- section 6(c)(i)” and propose a reorganization of the funds. Benchmark notified Pacer of its “intent to terminate” their agreement and proposed a reorganization plan. After the reorganization plan was not approved, Pacer informed Benchmark that it “accepted” Benchmark’s termination of their agreement. Benchmark disagreed that it had terminated the agreement. It responded that Benchmark’s notice of intent to terminate under Section 6(c)(ii) was not the same as a notice of actual termination under Section 6(c)(i). In other words, it was only an intent to terminate, not an actual termination. The Superior Court held that Benchmark’s notice of intent to terminate caused an actual termination of the parties’ agreement when the reorganization plan was not approved. On appeal, Benchmark argues that a notice of intent to terminate is not the same as an actual termination. We agree. The court should have granted Benchmark’s motion for summary judgment. 2  I. A. Benchmark Investments, LLC, operating as Kelly Benchmark Indexes, is a sponsor and index provider for exchange traded funds (“ETFs” or “funds”). An ETF is an investment fund traded on stock exchanges. It allows investors to buy a basket of assets like stocks, bonds, or commodities without purchasing each asset individually. Businesses like Benchmark design indexes and offer ETFs to invest in those indexes. The Benchmark funds correlate to real estate indexes.1 In November 2017, Benchmark signed an ETF services agreement with Pacer Advisors, Inc. (“ETF Services Agreement” or “Agreement”).2 The Agreement followed what is known as a “white label” model.3 Under a white label model, a sponsor (like Benchmark) pays a service provider and advisor (like Pacer) to host the sponsor’s indexes in its own funds.4 Typically, the service provider receives all 1 App. to Opening Br. at A073 [hereinafter A_] (Am. Compl., dated June 14, 2023, at 1–2 [hereinafter Compl.]). 2 A084 (Id. at 13). See