Delaware Code

8 Del. C. § 226 (2026)

Appointment of custodian or receiver of corporation on deadlock or for other cause

✓ current as of May 2026

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(a) The Court of Chancery, upon application of any stockholder, may appoint 1 or more persons to be custodians, and, if the corporation is insolvent, to be receivers, of and for any corporation when:

(1) At any meeting held for the election of directors the stockholders are so divided that they have failed to elect successors to directors whose terms have expired or would have expired upon qualification of their successors; or

(2) The business of the corporation is suffering or is threatened with irreparable injury because the directors are so divided respecting the management of the affairs of the corporation that the required vote for action by the board of directors cannot be obtained and the stockholders are unable to terminate this division; or

(3) The corporation has abandoned its business and has failed within a reasonable time to take steps to dissolve, liquidate or distribute its assets.

(b) A custodian appointed under this section shall have all the powers and title of a receiver appointed under § 291 of this title, but the authority of the custodian is to continue the business of the corporation and not to liquidate its affairs and distribute its assets, except when the Court shall otherwise order and except in cases arising under paragraph (a)(3) of this section or § 352(a)(2) of this title.

(c) In the case of a charitable nonstock corporation, the applicant shall provide a copy of any application referred to in subsection (a) of this section to the Attorney General of the State of Delaware within 1 week of its filing with the Court of Chancery.

8 Del. C. 1953, § 226; 56 Del. Laws, c. 50; 77 Del. Laws, c. 253, § 27;

Notes of Decisions

Cited in 41 cases (18 in the last 5 years), 1956–2024 · leading case: Shawe v. Elting, 157 A.3d 152 (Del. 2017).

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Shawe v. Elting, 157 A.3d 152 (Del. 2017). · cites it 13× “SEITZ, Justice, for the Majority: Philip Shawe and his mother, Shirley Shawe, have filed an interlocutory appeal from the Court of Chancery’s August 13, 2015 opinion and July 18, 2016 order, and related orders, appointing a custodian under 8 Del. C. § 226 to sell TransPerfect…”

Shawe v. Pincus, 265 F. Supp. 3d 480 (D. Del. 2017). “Relevant to this action, Elting filed two petitions seeking the appointment of a custodian for TransPerfect pursuant to 8 Del C. § 226(a): pne captioned In re TransPerfect Global Inc.”

Wilderman v. Wilderman, 315 A.2d 610 (Del. Ch. 1974). · cites it 2× “Finally, plaintiff seeks an order directing the continuance of the business of the corporate defendant under a custodian as provided for under the provisions of 8 Del.C. § 226. Marble Craft is engaged in the business of installing ceramic tile and marble facings in residences…”

Hall v. John S. Isaacs & Sons Farms, Inc., 163 A.2d 288 (Del. 1960). · cites it 3× “The suit sought the appointment of liquidating receivers of the four corporate defendants pursuant to 8 Del.C. § 226 on the ground that a stockholders' deadlock had resulted in the failure to elect directors of the corporations.”

In Re Arthur Treacher's Fish & Chips of Ft. Lauderdale, Inc., 386 A.2d 1162 (Del. Ch. 1978). “Petitioner, on the other hand, strongly objects to such approach, contending that if the Court were to countenance such a procedure that Section 273 will be transformed into a replica of Section 226, an intention not to be presumed.”

Whitman v. Fuqua, 549 F. Supp. 315 (W.D. Pa. 1982). “See also: 8 Del. C. § 226(a)(2), which provides for the appointment of a custodian when the corporation is threatened with irreparable injury because of a deadlock between directors.”

Paulman v. Kritzer Radiant Coils, Inc., 143 A.2d 272 (Del. Ch. 1958). “Plaintiffs have filed a petition for the appointment of a receiver for the defendant corporation under 8 Del.C. § 226 which provides as follows: *273 "Whenever, by reason of an equally divided vote of the stockholders, there shall be a failure to elect directors, and such…”

In the Matter of Forum Mobile, Inc. (Del. Ch. 2022). · cites it 8× “8 Del. C. § 226(a). Section 226(a)(3) thus permits a custodian to be appointed when a corporation “has abandoned its business and has failed within a reasonable time to take steps to dissolve, liquidate or distribute its assets.”

In re: Shawe & Elting LLC (Del. Ch. 2015). · cites it 13× “The primary issue for decision is whether the Court should grant Elting’s petition to appoint a custodian to sell the corporation under 8 Del. C. § 226 even though the corporation is highly profitable.”

Transperfect Global, Inc. v. Pincus (Del. 2022). · cites it 4× “Pincus, a custodian duly appointed by the Court of Chancery under 8 Del. C. § 226. The parties executed the sale agreement (the “SPA”) in November 2017.”

Kleinberg v. Aharon (Del. Ch. 2017). · cites it 3× “” 8 Del. C. § 226(a). The deadlock must be a product of “genuine, good faith divisions.”

Martion Coster v. UIP Companies, Inc. (Del. Ch. 2020). · cites it 3× “On June 15, 2018, Plaintiff filed a complaint in this Court naming Schwat, Schwat Realty LLC, and the Company as defendants and seeking the appointment of a custodian pursuant to 8 Del. C. § 226(a)(1) (the “Custodian Action”).”

Show all 41 citing cases →

— 8 Del. C. § 226(a) — 7 cases

Shawe v. Elting, 157 A.3d 152 (Del. 2017). “SEITZ, Justice, for the Majority: Philip Shawe and his mother, Shirley Shawe, have filed an interlocutory appeal from the Court of Chancery’s August 13, 2015 opinion and July 18, 2016 order, and related orders, appointing a custodian under 8 Del. C. § 226 to sell TransPerfect…”

In re: Shawe & Elting LLC (Del. Ch. 2015). “The primary issue for decision is whether the Court should grant Elting’s petition to appoint a custodian to sell the corporation under 8 Del. C. § 226 even though the corporation is highly profitable.”

Kleinberg v. Aharon (Del. Ch. 2017). “” 8 Del. C. § 226(a). The deadlock must be a product of “genuine, good faith divisions.”

Coster v. UIP Companies, Inc. (Del. 2021).

— 8 Del. C. § 226(a)(1) — 6 cases

Martion Coster v. UIP Companies, Inc. (Del. Ch. 2020). “On June 15, 2018, Plaintiff filed a complaint in this Court naming Schwat, Schwat Realty LLC, and the Company as defendants and seeking the appointment of a custodian pursuant to 8 Del. C. § 226(a)(1) (the “Custodian Action”).”

In the Matter of Tuebor Advisors (Del. Ch. 2021).

Coster v. UIP Companies, Inc. (Del. 2021).

— 8 Del. C. § 226(a)(2) — 8 cases

Wilderman v. Wilderman, 315 A.2d 610 (Del. Ch. 1974). “Finally, plaintiff seeks an order directing the continuance of the business of the corporate defendant under a custodian as provided for under the provisions of 8 Del.C. § 226. Marble Craft is engaged in the business of installing ceramic tile and marble facings in residences…”

Sanjiv Mehra v. Jonathan Teller (Del. Ch. 2021).

In re TransPerfect Global, Inc. (Del. Ch. 2014).

— 8 Del. C. § 226(a)(3) — 4 cases

In the Matter of Forum Mobile, Inc. (Del. Ch. 2022). “8 Del. C. § 226(a). Section 226(a)(3) thus permits a custodian to be appointed when a corporation “has abandoned its business and has failed within a reasonable time to take steps to dissolve, liquidate or distribute its assets.”

BE Capital Mgmt. Fund LP v. Fund.com Inc. (Del. Ch. 2024).

Ramos v. Headstrong Grp., Inc. (Del. Super. Ct. 2023).

FTE Networks, Inc. v. Szkaradek (D. Del. 2023).

— 8 Del. C. § 226(b) — 4 cases

Kleinberg v. Aharon (Del. Ch. 2017). “” 8 Del. C. § 226(a). The deadlock must be a product of “genuine, good faith divisions.”

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