Pause the Earnout Clock
Forcing a buyer to reinstate an ousted CEO is almost unheard of in Delaware M&A. But VC Will did it just this past March—and paused the earnout clock.
In Fortis Advisors v. Krafton (C.A. No. 2025-0805-LWW, March 16, 2026), the Delaware Court of Chancery issued a landmark decision focused entirely on enforcing post-closing operational covenants through extraordinary equitable relief.
THE DISPUTE.
Krafton acquired Subnautica developer Unknown Worlds for $500M upfront + up to $250M in contingent earnouts. To protect that upside, target leadership contractually secured operational control and explicit protections against termination without Cause.
With Subnautica 2 tracking toward a payout, Krafton locked the studio out of its Steam publishing platform and ousted CEO Ted Gill.
THE COURT'S REMEDY: FORCING THE KEYS BACK.
Rather than deferring resolution to post-trial monetary damages years down the road, Vice Chancellor Will issued a rare suite of mandatory injunctions:
Mandatory Reinstatement: Reinstated ousted CEO Ted Gill immediately, restoring his full executive authority. Chancery almost never forces hostile acquirers and founders back into an operating relationship, but did so here because operational control was an express, bargained-for term.
Platform Restoration: Ordered Krafton to immediately restore the studio’s full access to its Steam publishing platform.
258-Day Earnout Tolling: Equitably extended the earnout period by the exact duration of Gill’s wrongful ouster, neutralizing the buyer’s incentive to win by running out the clock through litigation.
THE TAKEAWAY
Money damages after the fact are no longer the only risk for buyers who breach governance terms. If you strip operational control to avoid an earnout payout, Delaware courts can—and will—force you back into business with the executives you tried to push out.
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