Wygand v. Presidio, Inc.

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

KENNETH WYGAND, )
) C.A. No. S22C-02-004 CAK
Plaintiff, )
)
v. )
)
PRESIDIO, INC., )
)
Defendant. )

Submitted: March 20, 2025
Decided: March 24, 2025

Upon Plaintiff’s and Defendant’s Cross-Motions for Summary Judgment
under Delaware Superior Court Civil Rule 56

PLAINTIFF’S MOTION DENIED
DEFENDANT’S MOTION GRANTED

MEMORANDUM OPINION AND ORDER

Kenneth Wygand, Plaintiff, Pro Se.
10 Myles Court
Commack, NY 11725

Jason Z. Miller, Esquire and Kelly A. Green, Esquire, Smith, Katzenstein & Jenkins
LLP, The Brandywine Building, 1000 N. West Street, Suite 1501, Wilmington, DE
19801, Attorneys for Defendant.

KARSNITZ, R. J.
INTRODUCTION

This is a straightforward breach of contract case. Nonetheless, it has been

ongoing for more than four years and deals with events that occurred fourteen years

ago. The time has come for this matter to be resolved and judgment to be entered with

respect to this dispute surrounding what in my view is a clear and unambiguous

contract.

Kenneth Wygand, a resident of New York (“Plaintiff”) claims he was treated

poorly, and he was. Presidio, Inc., a Delaware corporation (“Defendant”) owed

Plaintiff $834.90, which Defendant agreed was due on March 31, 2011, the date on

which Defendant was sold in a cash-out merger. Remarkably, Defendant has not

paid Plaintiff. It could have done so without prejudice, which at least would have

stopped the accrual of interest on this amount. Everyone would have benefitted.

However, Plaintiff has transferred his mistreatment into a claim that he should

have received a benefit to which he was not entitled, and which was only

theoretically possible. I questioned him about this at oral argument, and he

articulated no response other than that he was wronged, and that I should give him a

windfall to offset the mistreatment.

Plaintiff’s position is not in accordance with basic contract law. Plaintiff and

Defendant had a contract, the Equity Participation Agreement (the “EPA”).

2
Defendant acknowledges that it breached the EPA. Upon a sale and merger of

Defendant, Plaintiff’s equity rights were extinguished, and Plaintiff was given no

new or additional equity rights. Rather, Defendant was required to make a cash

payment to Plaintiff, as discussed in greater detail below. However, Plaintiff asserts

that he is entitled to new or additional equity rights. I disagree. Rather, he is entitled

to what he should have been paid in 2011 with interest at the legal rate. 1 That

payment will make him whole, which is the goal of contract law in resolving claims

for breach of contract.

FACTS

Plaintiff is a former employee of Defendant, who commenced his employment

with Defendant in 2007. During Plaintiff’s employment, he received an Equity

Participation Right (“EPR”) pursuant to an Equity Participation Agreement dated

March 5, 2008 (the “EPA”), representing 10,000 management common shares and

10,000 common shares. The management common shares and the common shares

both had a Granting Value of $0.22 per share. The EPA defined Granting Value as

the fair market value per share of the EPR shares as of the Grant Date, March 5, 2008.

Assuming he remained employed with Defendant, Plaintiff’s EPR vested at a rate of

25% each year from the Grant Date, e.g., on March 5, 2009, he was vested at 25%,

1
6 Del. C. § 2301(a).
3
on March 5, 2010, he was vested at 50% and so on, until fully vested in four years.

On June 2, 2010, Defendant (then a limited liability company) elected to be

treated as a corporation for tax purposes and, in connection with that election, each

1,000 management common shares were converted to 518 common shares. Thus,

Plaintiff’s EPR equivalent was modified.2 Based on this conversion, Plaintiff’s EPR

in connection with the 10,000 management common shares converted to an EPR

represented by 5,180 common shares. Thus, Plaintiff had a total EPR equal to 15,180

common shares.

In December 2010, Plaintiff terminated his employment with Defendant. At

that juncture, only 50% of Plaintiff’s EPR had vested, i.e., he had an EPR tracking

the fair market value of 7,590 of the 15,180 common shares.

On March 31, 2011, Defendant was sold in a cash-out merger. The merger

agreement provided that both the vested and unvested portions of all equity-based

awards would be cashed out. In other words, the equity underlying the EPRs no

longer existed by virtue of the merger. As an equity-based award, Plaintiff’s EPR

was terminated, as were all other outstanding EPRs. Plaintiff’s EPR was converted

into the right to receive a cash payment in the amount of $0.33 per share less the

Granting Value, which was $0.22 per share, or $0.11 per share. Multiplying that

$0.11 per share by Plaintiff’s 7,590 common shares yielded a cash payment amount

2
This conversion was consistent with the EPA and has never been challenged by Plaintiff.
4
of approximately $834.90 due to Plaintiff.

Plaintiff’s payment was calculated in accordance with Section 3 of the EPA

entitled, “Payment for Equity Participation Right.” Section 3(b) of the EPA provides

that:

In the event of a sale, a consolidation or merger of the Company or a
sale of all or substantially all of the assets of the Company (“Sale”) or
in the event of a liquidation or dissolution of the Company, or a
Company Public Offering (as defined in the Company’s Second
Amended and Restated Limited Liability Company Agreement, as
amended from time to time, the “LLC Agreement”), the Board or board
of managers or board of directors of any entity assuming the obligations
of the Company, shall either (A) provide that this Equity Participation
Right be continued by the Company or assumed by the acquiring or
succeeding entity (or an affiliate thereof) and continue to vest in
accordance with the terms thereof (including any accelerated vesting as
provided in accordance with Exhibit A attached hereto), in which case
this Equity Participation Right shall be exercisable (to the extent then
vested on any such date) by the Grantee at any time through the
Expiration Date for a cash payment equal to the Net Value, subject to
the provisions of Section 3a, or (B) provide that the outstanding Equity
Participation Right shall be terminated (including both the vested and
unvested portion thereof) in exchange for a cash payment equal to the
Net Value of the vested portion thereof as of such date. For purposes
of clause (B) the date of termination shall be the Date of Exercise.
[Emphasis supplied]

The Net Value to which Plaintiff was entitled is defined by Section 3(c)(A) of the

EPA as “the amount, as of the Date of Exercise, by which the Exercise Value exceeds

the Granting Value.” Section 3(c)(B) then proceeds to define Exercise Value as “the

fair market value per share of the Equity Participation Right Shares on the Date of

Exercise as determined in good faith by the Board.” Since Defendant was sold and

5
the acquiring entity did not assume the EPR, Section 3(b)(B) (emphasized above) is

the applicable provision for determining the cash payment to which Plaintiff was

entitled. Plaintiff is entitled to a cash payment equal to the Net Value of his vested

EPR. As stated above, Net Value is calculated as follows: the Exercise Value ($0.33

per share) as determined in accordance with the merger sale price minus the Granting

Value ($0.22 per share) and multiplying that amount ($0.11 per share) by Plaintiff’s

vested 7,590 common shares. Multiplying that $0.11 per share by 7,590 common

shares yields a cash payment amount of approximately $834.90.

An employee of Defendant misconstrued the provisions of the EPA and

erroneously believed that Plaintiff’s voluntary termination of his employment

resulted in the forfeiture of his entitlement to payment for the EPR. Due to this

clerical error, Plaintiff did not receive a cash payment for the value of his EPR.3

On December 19, 2017, Plaintiff contacted Defendant to inquire as to the

procedure for obtaining payment in connection with his EPR. Defendant informed

Plaintiff that his EPR was worth an $834.90 payment but offered Plaintiff a

payment in the amount of $1,669.90 to make up for the clerical error made by

Defendant.4 Plaintiff was unwilling to accept that payment in full satisfaction of a

judgment. Instead, Plaintiff maintains he is entitled to the amount of $139,959.60,

3
Compl. ¶ 21; Answer ¶ 21.
4
This amount would have provided Plaintiff with a compounded rate of interest exceeding ten
percent at the time the offer was made.
6
which he claims represents the fair market value of the shares at the close of the

stock market trading day on December 19, 2017.

PROCEDURAL BACKGROUND

On September 11, 2020, Plaintiff filed a Verified Complaint (“Complaint”) in

the Court of Chancery against Defendant. Plaintiff’s Complaint contained two

counts – one for breach of contract and one for violation of shareholder rights.

Defendant moved to dismiss the Complaint for a lack of subject matter jurisdiction

and moved to dismiss the shareholder rights claim for failure to state a claim.

Briefing ensued, and the Court of Chancery held oral argument on January 6, 2022,

and dismissed Plaintiff’s shareholder rights claim pursuant to Rule 12(b)(6) and

found that it lacked subject matter jurisdiction over the contract claim. The Court

of Chancery gave Plaintiff leave to transfer his contract claim to Superior Court and

the action was transferred to this Court in February 2022.

Defendant filed its Answer to the Superior Court Complaint on March 31,

2022. On September 7, 2022, Defendant moved for judgment on the pleadings

pursuant to Superior Court Civil Rule 12(c). Plaintiff filed an opposition to the

motion dated October 31, 2022, and an amended opposition dated November 10,

2022. Defendant filed its reply on December 7, 2022.

On January 5, 2023, the parties submitted a joint letter to the Court that

requested the Court issue a new pretrial scheduling order that extended all existing

7
deadlines by six months. On January 9, 2023, the Court approved the extension.

On March 3, 2023, the Court held oral argument on Defendant’s motion for

judgment on the pleadings. The Court denied Defendant’s motion and ordered

Plaintiff to contact Defendant’s counsel within twenty days to attempt to reach

agreement on whether discovery was necessary in this action and, if not, to agree on

a briefing schedule for dispositive motions.

On March 13, 2023, the parties submitted a joint letter to the Court apprising

the Court of each parties’ respective positions with respect to whether discovery in

this action was warranted. On March 14, 2023, the Court issued a letter ruling that

the parties were allowed limited discovery of document requests and interrogatories

to twenty per party and depositions to one per party.

The parties conferred and submitted a schedule to govern discovery and

summary judgment briefing on March 21, 2023. On June 2, 2023, the Court entered

the parties’ proposed schedule. On July 10, 2023, Plaintiff served requests to

produce documents and interrogatories. Defendant timely served its responses and

objections to the discovery on August 9, 2023. The next day, Defendant produced

documents to Plaintiff. Wygand took two depositions in this action. On March 1,

2024, the Court ruled that no more depositions would be conducted and advised the

parties that they could move forward with dispositive motions. On March 7, 2024,

Plaintiff asked for reconsideration of the Court’s ruling and on March 11, 2024,

8
Defendant opposed reconsideration, On March 19, 2024, the Court allowed Plaintiff

one more deposition.

On July 1, 2024, the Court entered a Second Pretrial Scheduling Order which,

inter alia, provided that the pretrial stipulation would be due on March 27, 2025, and

the pretrial conference was scheduled for April 2, 2025, with trial to follow.

On September 13, 2024, Defendant filed its Motion for Summary Judgment.

On November 15, 2024, Plaintiff filed both an Answer to Defendant’s Motion for

Summary Judgment and his Cross-Motion for Summary Judgment. On December 5,

2024, Defendant filed its Reply to Plaintiff’s Answer and its Opposition to the Cross-

Motion for Summary Judgment. On January 13, 2025, Plaintiff filed his Reply. I

held oral argument on the cross-Motions for Summary Judgment on February 11,

2025.

On February 25, 2025, Defendant filed its letter with respect to the calculation

of prejudgment interest. On March 3, 2025, Plaintiff filed an unsolicited letter on a

variety of topics, and on March 17, 2025, Plaintiff filed his letter with respect to the

calculation of prejudgment interest. On March 19, 2025, Defendant filed its response

to Plaintiff’s unsolicited letter.

On March 20, the parties requested a clarification of the Second Pretrial

Scheduling Order, and that same day the Court entered an Order holding all dates in

abeyance until the issuance of this opinion. This is my opinion on the cross-Motions

9
for Summary Judgment.

STANDARD OF REVIEW

Summary judgment is appropriate when the moving party demonstrates

that there are no genuine issues of material fact and that the moving party is

entitled to judgment as a matter of law.5 In reviewing a motion for summary

judgment, I view the facts in a light most favorable to the non-moving party and

draw all reasonable inferences in favor of the non-moving party. 6 Once the

moving party establishes that there are no material factual issues in dispute, the

non-moving party bears the burden of demonstrating a material factual issue by

offering admissible evidence. 7 The non-moving party may not simply rest on

unverified allegations or unsupported statements of fact in a brief.8 “The purpose of

Superior Court Civil Rule 56 is to provide a method by which issues of law involved

in a litigation may be speedily brought before a trial court and disposed of without

unnecessary delay. ‘The disposition of litigation by motion for summary judgment

should, when possible, be encouraged for it should result in a prompt, expeditious

and economical ending of lawsuits.’”9

5
Del. Super. Civ. R. 56(c); Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979).
6
DiOssi v. Maroney, 548 A.2d 1361, 1362 (Del. 1988).
7
Del. Super. Civ. R. 56(e); Phillips v. Del. Power & Light Co., 216 A.2d 281, 285 (Del. 1966).
8
Super. Ct. Civ. R. 56(e); Martin v. Nealis Motors, Inc., 247 A.2d 831, 832 (Del. 1968); Standard
Accident Ins. Co. v. Ponsell’s Drug Stores, Inc., 202 A.2d 271, 276 (Del. 1964); Tanzer v. Int’l
Gen. Indus., Inc., 402 A.2d 382, 385 (Del. Ch. 1979).
9
AeroGlobal Cap. Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428, 443 (Del. 2005)
(internal citations omitted).
10
When, as here, the parties file cross-motions for summary judgment and do

not argue that there is a material issue of fact, the court will treat the motions as a

stipulation for a decision on the merits based on the record submitted with the

motions. 10 The court must examine each motion separately, applying the same

standard to each. The existence of cross-motions does not necessarily indicate that

summary judgment is appropriate for either party. Each party must show that there

is no genuine issue of material fact and that they are entitled to judgment as a matter

of law.11 Filing a cross-motion for summary judgment does not waive a party's right

to assert that there are disputed facts that preclude summary judgment in favor of the

other party. Each party concedes the absence of a factual issue and the truth of the

nonmoving party's allegations only for the purposes of its own motion.12 Even when

presented with cross-motions, the court must deny summary judgment if a material

factual dispute exists. The court must view the facts in the light most favorable to

the nonmoving party and determine if the record requires further development to

clarify the law or its application to the case.13

10
Farmers for Fairness v. Kent County, 940 A.2d 947 (Del. 2008); Waters v. Delaware Moving
and Storage, Inc., 300 A.3d 1 (Del. 2023).
11
Bernstein v. TractManager, Inc., 953 A.2d 1003 (Del. 2007); Fasciana v. Electronic Data
Systems Corp., 829 A.2d 160 (Del. 2003).
12
Waters v. Delaware Moving and Storage, Inc., supra; Total Care Physicians, P.A. v. O'Hara,
798 A.2d 1043 (Del. 2001).
13
Fasciana v. Electronic Data Systems Corp., supra; Comet Systems, Inc. Shareholders' Agent v.
MIVA, Inc., 980 A.2d 1024 (Del. 2008).

11
ANALYSIS

Summary Judgment

In my view, Defendant has satisfied the standards for summary judgment.

Defendant has demonstrated that there are no genuine issues of material fact and

that it is entitled to judgment as a matter of law, even though I have viewed the

facts in a light most favorable to Plaintiff and drawn all reasonable inferences in

favor of Plaintiff. Plaintiff has not borne the burden of demonstrating a material

factual issue. It cannot simply rely on mere allegations or conclusory statements

of fact. This resolution of the case will allow issues of law to be promptly, expeditiously

and economically resolved.

Breach of Contract and Monetary Relief

Plaintiff argues that the proper Date of Exercise for his EPR was not

March 31, 2011, the merger date, but rather December 19, 2017, the date on

which Plaintiff requested to exercise his EPR and Defendant denied Plaintiff's

request. Since Defendant failed to follow the procedures for cashing out

Plaintiff’s EPR in accordance with the provisions of the EPA (a failure conceded

by Defendant), and since Plaintiff was unaware of such failure and the purported

termination of his EPR, such failure in effect negated the termination of his EPR

until he sought to exercise it six years later. In something akin to an equitable

estoppel argument, Plaintiff asserts that his EPR remained intact until Plaintiff's

12
request to exercise it in 2017.

The specific failure pointed to by Plaintiff was Defendant’s failure to

include his EPR in the membership interest schedule provided to the Board of

Directors of Defendant as a part of the merger consideration. This omission, argues

Plaintiff, means that the Board of Directors never could have made the required

determination under Section 3(b)(B) of the EPA, discussed above, to either

terminate or continue his EPR. Had it had the opportunity to do so, it could have

continued his EPR rather than terminating it.

Plaintiff misreads the clear and unambiguous language of Section 3(b)(A)

and Section 3(b)(B) of the EPA. Defendant’s choice upon the merger was either

to continue the EPRs after the merger under Section 3(b)(A) of the EPA or to

terminate the EPRs after the merger under Section 3(b)(B) of the EPA. The

merger agreement itself clearly and unambiguously chose the latter – to

terminate all the EPRs for a cash payment to all holders of EPRs, including

Plaintiff. Section 3(b)(B) of the EPA clearly and unambiguously states that the

EPR is terminated and replaced by the right to a cash payment, i.e., an equity

right is replaced by a liquidated cash equivalent. It is true that the cash payment

was never tendered by Defendant or received by Plaintiff, and that this was

Defendant’s fault. But this does not mean that, because of such fault, Plaintiff

continued to have some sort of inchoate equity interest ad infinitum into the future

13
until he chose to cash it out.

Another fallacy in Plaintiff’s argument is that he is asserting an equity interest

in an entity that no longer exists. The entity in which Plaintiff was given an EPR has

long ago been merged and sold. Even if Plaintiff theoretically had an equity interest

(which he no longer does), an equity interest in nothing is nothing. That equity

interest was long ago converted to the right to a cash payment.

As to Plaintiff’s assertion that the proper Date of Exercise was December

19, 2017, the fact that he chose that date to request his cash payment does not

change the clear and unambiguous terms of Section 3(b)(B) and Section 3(c)(A)

of the EPA and the merger agreement. Unlike a magician, Plaintiff cannot

simply pick a date and make it the Date of Exercise in contravention of the

contract documents.

Similarly, Plaintiff cannot contravene the detailed terms of the EPA for

calculating the value of the vested and unvested portions of the EPR, including

Section 3(b)(B) and Section 3(c)(A) of the EPA, by the self-serving statement

that his EPR should be valued based on the fair market value of Defendant’s stock

on December 19, 2017, the date of his exercise request. One can appreciate

Plaintiff’s attempt to astronomically increase the amount of the cash payment

but simply wishing for something does not make it true.

14
CONCLUSION

For the reasons discussed above, Defendant’s Motion for Summary Judgment

is GRANTED and Plaintiff’s Cross-Motion for Summary Judgment is DENIED.

Defendant shall pay Plaintiff the sum of $834.90, plus prejudgment interest thereon

from the date of March 31, 2011, until the date of this judgment at the rate of 5%

over the Federal Reserve discount rate, compounded quarterly.

IT IS SO ORDERED.

/s/ Craig A. Karsnitz
Craig A. Karsnitz

cc: Prothonotary

15