Michael Patterson Wins Delaware Supreme Court Appeal, Overturning $40 Million Judgment
Los Angeles – April 17, 2026 – Cooley secured a unanimous ruling from the Delaware Supreme Court for client Michael Patterson, overturning a decision of the Delaware Court of Chancery and eliminating a potential personal exposure of $40 million in damages for alleged conversion.
The dispute arose from a $20,000 loan Patterson, former CEO of Romeo Systems, made to Lady Benjamin Cannon, a technology consultant, to hire a criminal defense lawyer. To secure the loan, Cannon executed an agreement pledging a warrant for one million shares of Romeo. Cannon signed off on the pledge agreement’s collateral description, represented she owned the pledged assets and reaffirmed over email that she intended “to pledge her ‘Romeo shares.’”
After Cannon defaulted, Patterson transferred the shares to his name. The corporation later entered into an agreement to be acquired by a public company in a stock-for-stock merger. Upon reading the announcement, Cannon filed a complaint for declaratory relief, noncompliance with Article 9 of the Delaware Uniform Commercial Code, conversion and breach of contract against Patterson. In October 2025, after a short trial (for which Cooley was not trial counsel), the Delaware Chancery Court ruled that Patterson had wrongly converted the warrant, and Cannon was entitled to damages and interest amounting to approximately $40 million.
In January 2026, Cooley was retained to help with the appeal and filed an appeal for Patterson to the Supreme Court of Delaware challenging the Chancery Court’s decision.
On April 17, 2026, the Delaware Supreme Court unanimously reversed the Delaware Chancery Court decision holding Patterson liable for $40 million in damages for alleged conversion.
The Cooley team advising Patterson was led by partners Brian Klein, Ephraim McDowell and Brian French, and also included associate Anna Mohan.
The case is Patterson v. Cannon.
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