In Leon v. Orlando, 2024 WL 2862452 (Del. Ch. June 5, 2024), Vice Chancellor Lori W. Will explained the process for setting the value, timing, and securitization of a bond in connection with a status quo order that restricted certain defendants from transferring shares of publicly traded stock. The Vice Chancellor’s decision illustrates the court’s discretion and, in this instance, common-sense approach to requiring a bond in the context of provisional relief. The underlying dispute involved determining the rightful manager of nominal defendant ARC Global Investments II LLC under 6 Del. C. Section 18-110. ARC was the sponsor of a SPAC, Digital World Acquisition Corp., which completed a business combination with Trump Media & Technology Group Corp. Defendant Orlando purportedly was the managing member and manager of ARC. Plaintiffs were members of ARC who claimed that they removed Orlando from those roles through a written consent.

The court had previously entered a status quo order when resolving various preliminary motions. One issue raised in the motions concerned restricting defendants from transferring Trump Media securities that ARC would receive in connection with its ownership of Digital World securities. The Trump Media securities were publicly traded and experienced a high level of volatility in share price. The status quo order prevented ARC and Orlando from transferring their respective Trump Media stock except to comply with existing contractual obligations or in the ordinary course of ARC’s business.