A Chinese Client’s Fight for Corporate Control Across Delaware, Texas and Nevada

Dec 18, 2025

Christopher D. Kercher, a partner at Quinn Emanuel and an expert in expedited litigation, discusses a gripping corporate control dispute involving a Chinese company facing a governance crisis. The conversation dives into the urgent strategies employed across Texas, Nevada, and Delaware as the new board battled internal blockers threatening delisting. Key highlights include the importance of a status quo order, the challenges of navigating Mandarin documents, and how AI was leveraged to accelerate discovery. Kercher shares insights on the necessity of cultural sensitivity when working with Chinese counsel.

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ANECDOTE

Cross-Border Control Crisis

A Chinese-listed oil company regained control struggles after a shareholder change led to contested U.S. subsidiaries.
The new Chinese board discovered blockers at U.S. holding companies that prevented timely director elections.

ADVICE

Bring Governance Disputes To Delaware Fast

Move corporate governance fights to the state of incorporation when possible because of the internal affairs doctrine.
Seek expedited Delaware processes when you need final, enforceable relief on a compressed timeline.

ADVICE

Freeze Major Actions With Status Quo Orders

Ask for a status quo order to freeze major corporate actions while litigation proceeds.
Use a veto threshold (e.g., $100,000) to prevent asset stripping or adverse transactions during expedited disputes.

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John is joined by Christopher D. Kercher, partner in Quinn Emanuel’s New York office. They discuss a complex cross-border dispute involving a Chinese public company listed on the Shanghai Exchange. The company, which owned oil assets in Texas and was one of the largest private oil producers in the U.S., faced a governance crisis after an investor took over the company and elected a new board in China. When the new board attempted to gain control over the company’s U.S. subsidiaries, it discovered that the company’s former management had implemented mechanisms at the subsidiaries’ holding companies that blocked the election of new directors. This control deadlock posed an existential threat, as Chinese regulators warned the company it could be delisted if control was not reestablished by the end of the year.

The urgency of the situation demanded a rapid litigation strategy across three U.S. jurisdictions: Texas, Nevada, and Delaware. The client’s initial effort, led by another firm, to resolve the matter in Texas failed because of the “internal affairs doctrine,” which required adjudication in Delaware, where the entities were incorporated. Fortunately, the other side initiated a Delaware proceeding allowing the Chinese parent to counterclaim and consolidate all issues under a highly expedited schedule. A key early win was securing a “status quo” order in Delaware, which froze major corporate actions and gave the new board veto power over decisions exceeding $100,000, effectively halting adverse moves by the former management.

The case involved extensive discovery, much of it in Mandarin, and included WhatsApp, WeChat, and other messaging platforms. Advanced AI tools played a crucial role in accelerating document review, translating materials, and aiding strategy development. Cultural sensitivity and coordination with Chinese counsel were also essential to preparing the case. As trial approached, the opposing side sought settlement, likely due to being overwhelmed by the pace and depth of the litigation.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi