A Texas court dismissed a derivative lawsuit filed by shareholder Gary Guillaume against Coinbase without prejudice. The ruling centered on the plaintiff’s failure to submit a written demand to the board before suing, a requirement under Texas law that applied to his authority to bring the action despite the alleged misconduct occurring during Coinbase’s Delaware incorporation period.
The court did not evaluate the merits of the allegations regarding director conduct between 2021 and 2023. Instead, the decision established that while Delaware law might govern the underlying claims, Texas procedural rules controlled the shareholder’s right to sue following Coinbase’s conversion to a Texas entity in December 2025.
Key facts
- The Texas Business Court dismissed the suit on October 2, 2026, because Guillaume did not make a pre-suit written board demand.
- The dismissal was without prejudice, meaning the case was closed without a ruling on whether the directors committed any misconduct.
- Coinbase’s conversion from Delaware to Texas became effective on December 15, 2025, prior to the filing of this lawsuit.
- The court assumed Delaware law governed the underlying claims but applied Texas law to determine the shareholder’s authority to sue.
- Guillaume attempted to argue demand futility, but Texas law required a particularized written demand for public companies regardless of futility claims.
Why it matters
The immediate lesson for public shareholders is that the law governing a company’s past conduct and the law governing their ability to challenge it can diverge after reincorporation.