## Facts

- Coinmint, LLC was formed in 2016 as a Delaware LLC to run a bitcoin mining/data-center business.
- Coinmint was founded by two childhood friends: Prieur Leary (the operations partner) and Ashton Soniat (the cash-funding partner).
- Leary held his interest through Mintvest Capital Ltd. (Mintvest). Soniat held his interest through Coinmint Living Trust (CLT). Mintvest and CLT were Coinmint’s only members.
- The parties began with an understanding and record ownership of 50% each.
- Coinmint’s operating agreement provided that Soniat/CLT capital contributions could dilute Mintvest’s membership interest.
- As the business developed, Soniat/CLT made substantial capital contributions. The parties regularly ignored operating-agreement governance mechanics (including formal meetings and other process steps).
- Rather than applying the operating agreement’s dilution mechanics strictly, the parties made a separate deal that fixed Mintvest’s interest at 18.2% and CLT’s at 81.8%, with later funding often treated as nondilutive loans.
- CLT caused Coinmint to convert/redomesticate from a Delaware LLC to a Puerto Rico LLC to obtain Puerto Rico-based benefits for the business.
- The conversion did not follow all steps contemplated by the operating agreement, but Mintvest/Leary did not timely object and participated with knowledge of the plan to convert.
- After the relationship soured, CLT took the position that it could unilaterally amend the governing documents, remove Mintvest’s membership interest, and treat CLT as the sole member.
- Mintvest filed an action in the Delaware Court of Chancery seeking relief including nullification of the conversion (and related ownership and governance remedies), and sought dissolution-type relief.

## Issues

1. Whether Mintvest could unwind or nullify the Delaware-to–Puerto Rico conversion based on failures to follow operating-agreement procedures when Mintvest knew of, supported, and accepted the conversion.
2. Whether Mintvest’s course of conduct—accepting the 18.2%/81.8% split and allowing CLT’s capital structure and conversion to proceed—barred its claims under waiver, acquiescence, or equitable estoppel.
3. Whether the Delaware Court of Chancery had subject-matter jurisdiction to grant internal-affairs remedies (including dissolution-type relief) for Coinmint after it became a Puerto Rico LLC.

## Decision

- The Court of Chancery entered judgment for CLT on Mintvest’s post-trial claims.
- The court refused to unwind the conversion, concluding that Mintvest’s conduct supported equitable defenses (including waiver, acquiescence, and estoppel) against Mintvest’s procedural and contractual objections.
- The court treated Mintvest as bound by the renegotiated ownership arrangement (18.2% for Mintvest and 81.8% for CLT) in light of the parties’ agreement and performance.
- The court held that, once Coinmint converted into a Puerto Rico LLC, Delaware lacked subject-matter jurisdiction to adjudicate internal-affairs disputes and to grant dissolution-type relief as to the foreign entity.
- The court dismissed claims seeking relief that would regulate the internal affairs of the Puerto Rico LLC and vacated the prior status-quo order entered earlier in the case.

## Legal Principles

- Delaware LLC law is largely contractual; the operating agreement generally controls members’ rights and obligations.
- A party may waive contractual rights through words or conduct showing an intentional relinquishment of a known right.
- Acquiescence can bar relief where a party, with knowledge of the relevant facts, remains silent or participates while others rely on the transaction.
- Equitable estoppel may prevent a party from challenging a transaction when its conduct induced reliance by the other side.
- Failures to follow operating-agreement procedures commonly make an act voidable (not automatically void), and equitable defenses may foreclose rescission-type remedies.
- Under the internal affairs doctrine and limits on Delaware’s statutory authority, Delaware courts generally lack power to grant internal-affairs relief (including dissolution) for a foreign entity; once an LLC is no longer a Delaware LLC, those disputes belong in the entity’s new jurisdiction absent some independent Delaware basis for relief.

## Conclusion

In re Coinmint holds that Mintvest could not use ignored contractual formalities to unwind dilution and a Puerto Rico conversion that it knowingly accepted, and that Delaware’s Court of Chancery lacked subject-matter jurisdiction to grant internal-affairs and dissolution-type relief once Coinmint became a Puerto Rico LLC.


In Re Coinmint, LLC, 261 A.3d 867 (2021)