Delaware Chancery Denies SLC Termination in Coinbase v. Andreessen Over Independence

The court emphasizes Zapata step-one independence, finding “thick ties” between Rajaram and Andreessen Horowitz undermine SLC independence in Coinbase v. Andreessen.

Rich by Coin

2026-02-18

On Jan. 30, 2026, Chancellor Kathaleen St. Jude McCormick of the Delaware Court of Chancery issued an opinion in Grabski ex rel. Coinbase Global v. Andreessen, denying a special litigation committee’s motion to terminate a stockholder derivative suit due to disputed evidence regarding an SLC member’s independence. The court stressed the paramount importance of the independence inquiry under Zapata v. Maldonado and found material disputes concerning one SLC member’s independence based on extensive ties to a principal defendant and the defendant’s affiliated venture capital firm. The decision signals that, in Zapata challenges, the court will closely scrutinize SLC members’ relationships and viability of their independence, especially in two-member panels.

The case centers on Coinbase’s 2021 direct listing and the resulting derivative suit alleging fiduciary breach and unjust enrichment. Eight days after the court denied the dismissal motion, Coinbase formed a two-member SLC comprising Kelly Kramer and Gokul Rajaram and retained Wilson Sonsini as counsel. The SLC conducted a 10-month investigation, reviewing roughly 60,000 documents from 31 custodians and conducting 21 witness interviews, culminating in a 332-page report, and concluded that the action lacked merit. The plaintiff opposed the motion, arguing that Rajaram’s ties to Marc Andreessen and Andreessen Horowitz created an unreasonable risk of bias, and challenged the independence of the SLC’s counsel. The court applied Zapata’s two-step test, starting with independence of SLC members and the reasonableness of the investigation.

On step one, the court found material disputed facts about Rajaram’s independence, citing extensive connections with Andreessen and Andreessen Horowitz that could influence outcomes. As a result, the SLC failed Zapata step one, precluding dismissal at this stage. The court also noted Oracle Derivative Litigation as guiding authority, emphasizing a contextual approach to independence and leaving open the possibility that the SLC’s report could later support summary judgment.