On November 10, 2022, Saxena White filed a stockholder class action in the Delaware Court of Chancery on behalf of the public Class A stockholders of Goosehead Insurance, Inc., captioned Dollens v. Goosehead Insurance, Inc., C.A. No. 2022-1018-JTL.
The complaint challenged a stockholders agreement entered into in connection with Goosehead’s 2018 initial public offering. Although the founding stockholders had sold down their holdings and no longer held a majority of Goosehead’s voting power, the agreement continued to give them sweeping control over the Company so long as they retained just 10% of its outstanding shares. It required their prior written approval before the board could act on a broad range of matters — mergers and other major transactions, charter and bylaw amendments, changes to the size of the board, and decisions regarding the hiring, firing, compensation, and benefits of Goosehead’s most senior officers — and gave them the right to designate the nominees for a majority of the board’s seats. Plaintiff alleged that these provisions violated Section 141(a) of the Delaware General Corporation Law, which vests management of a corporation’s business and affairs in its board of directors, and sought a declaration that they were invalid and unenforceable.
After extensive negotiations, the parties agreed to a settlement that narrowed the categories of corporate action requiring the favored stockholders’ prior approval — removing decisions concerning the hiring, termination, and replacement of senior officers from the provision entirely — and added a fiduciary out permitting the board to act without their approval where it reasonably determines that doing so is necessary to comply with its fiduciary duties under Delaware law. The settlement also amended the board designation right to confirm that it is not exclusive: Goosehead’s other stockholders retain the right to designate a competing slate of nominees, and the board has no obligation to endorse or support the favored stockholders’ designees where its fiduciary duties require otherwise.
On June 30, 2026, the Court of Chancery approved the settlement. The Court found the claims meaningful and, under traditional Section 141(a) standards, of substantial merit, and observed that the complaint was the first to challenge a new-wave governance agreement of this kind. The Court certified the class, found that notice satisfied Rule 23 and due process, and concluded that the relief fell within the range of reasonableness.
