In the decision of Rich v. Fuqi International Inc., Civil Action No.
5653-VCG (Del. Ch. June 12, 2013), the Court analyzed a Motion
for Rule to Show Cause why Defendant Fuqi should not be held in
contempt for breach of the Court's order directing Fuqi to hold
an annual shareholder's meeting. In 2012, the Court
directed Fuqi to hold such a meeting, which it failed to do.
Fuqi asserted that to do so would be in violation of federal law
given that it has not filed audited financial statements.
However, Fuqi failed to explain why such statements have not yet
been filed.
The Court declined to impose a significant fine upon Fuqi for
failing to comply with the Court's previous order, given that
it would only damage stockholders, and further declined to appoint
a receiver to liquidate the company. Instead, the Court
appointed a receiver for a limited basis to take the following
actions: (i) evaluate whether audited financials sufficient to
comply with SEC regulations can
