## Facts

- Herbert H. Haft founded and controlled Dart Group Corporation, whose Class B common stock was the corporation’s only voting stock.
- On July 28, 1993, Herbert transferred to his son, Ronald S. Haft, 172,730 shares of Dart Class B common stock, representing 57% of the then-outstanding Class B shares and sufficient voting power to elect Dart’s board.
- In exchange, Herbert received cash, a promissory note, and a proxy from Ronald described as “lifetime” and irrevocable to vote the transferred shares.
- The transaction occurred amid a contentious family dispute connected to Herbert and Gloria Haft’s divorce and shifting alliances among family members.
- At the same time, Ronald entered an employment arrangement with Dart to serve as President and Chief Operating Officer and received options to purchase additional Class B shares.
- The relationship between Herbert and Ronald later deteriorated; in September 1994, Ronald sued Dart seeking specific performance of an alleged stock option.
- Ronald then attempted to revoke the proxy previously granted to Herbert, prompting litigation over whether the proxy was irrevocable and, if so, whether it remained irrevocable.

## Issues

1. Whether the proxy was validly made irrevocable when granted under Delaware law.
2. If the proxy was validly irrevocable when granted, whether it later became revocable due to changed circumstances and Ronald’s attempted revocation.

## Decision

- The Court of Chancery held the proxy was validly irrevocable when granted because it was coupled with an interest.
- The court held the proxy remained irrevocable; Ronald could not unilaterally revoke it based on the breakdown of the parties’ relationship.
- The court concluded Ronald’s attempted revocation was ineffective, and Herbert retained the voting power associated with the shares covered by the proxy.

## Legal Principles

- Under Delaware law, a proxy is generally revocable unless it is stated to be irrevocable and is coupled with an interest sufficient to support irrevocability.
- A proxy may be “coupled with an interest” when it functions as part of a bargained-for transaction securing a substantial economic or proprietary interest related to the shares or voting control.
- Continued irrevocability depends on whether the supporting interest persists; deterioration in personal or familial relations does not, by itself, terminate an irrevocable proxy.
- When an irrevocable proxy is part of an integrated control and financing arrangement (including a stock transfer and consideration such as a promissory note), courts will enforce it according to its terms so long as the supporting interest remains in place.

## Conclusion

The court enforced a stated “lifetime” proxy as irrevocable because it was part of a control-conferring stock transfer supported by consideration and a continuing interest, and it refused to allow later family conflict to convert the proxy into a revocable agency.


Haft v. Haft, 671 A.2d 413 (Del. Ch. 1995)