The Delaware Court of Chancery ruled on Aug. 28, 2026 that Empery Digital Inc. (NASDAQ: EMPD) breached its fiduciary duties by rejecting director nominations from ATG Capital Management LP, finding the board's action "inequitable" and affirming stockholders' fundamental right to select board members.
ATG Capital, which holds approximately 16% of Empery's outstanding shares, submitted its nomination notice in February 2026. The board rejected the notice in March 2026, prompting the legal challenge that culminated in Tuesday's ruling.
The four confirmed nominees — James C. Elbaor, Gabriel D. Gliksberg, Meredith S. Kirshenbaum, and Aaron T. Morris — will now stand for election at Empery's annual stockholders meeting scheduled for Oct. 14, 2026. ATG had initially put forward nine candidates before reducing its slate.
Empery's board has committed significant resources to defending against the proxy contest. According to the company's definitive proxy statement filed Sept. 3, 2026, it estimates total costs at approximately $22.5 million, with roughly $20.5 million already spent. "The Board rejected our Nomination Notice to avoid accountability, and it spent more than $20 million to avoid a contested election," said Gabi Gliksberg, managing partner of ATG Capital.
Empery's stock has declined sharply since its recapitalization. Shares closed at $3.03 on Sept. 8, 2026, representing a drop of nearly 70% from the $10.00 per share price recorded during the company's July 2025 recapitalization.
