CytoDyn Inc. v. Rosenbaum, C.A. No. 21-1139-MN (D. Del.), memorandum order on expedited discovery, Aug. 24, 2021 (Exhibit 99.2 to CytoDyn Form 8-K, Aug. 25, 2021)

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Memorandum order of August 24, 2021 in CytoDyn Inc. v. Rosenbaum, C.A. No. 21-1139-MN, U.S. District Court for the District of Delaware, signed by Judge Maryellen Noreika and filed by CytoDyn as Exhibit 99.2. The order rules on CytoDyn's Motion for Expedited Discovery and Expedited Proceedings, which the defendants opposed; its opening paragraph says the motion is GRANTED-IN-PART. The court finds expedited discovery warranted because CytoDyn seeks relief before the shareholder vote on October 28, 2021 and the requests are narrowly tailored to alleged disclosure violations in the defendants' Schedule 13D and preliminary proxy filings. Defendants must respond to document requests within 5 days, substantially complete production within 15 days and sit for depositions within 25 days.

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EX-99.2 3 d182240dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

CYTODYN INC., | )
)
Plaintiff, | )
)
v. | ) | C.A. No. 21-1139-MN
)
PAUL A. ROSENBAUM, JEFFREY P. | )
BEATY, ARTHUR L. WILMES, THOMAS | )
J. ERRICO, BRUCE PATTERSON, PETER | )
STAATS, MELISSA YEAGER, and CCTV | )
PROXY GROUP, LLC, | )
)
Defendants. | )

MEMORANDUM ORDER

At Wilmington this 24th day of August 2021:

Pending before the Court is the Motion for Expedited Discovery and Expedited Proceedings filed by Plaintiff CytoDyn Inc. (“CytoDyn”)
(D.I. 1). Defendants oppose the motion. (D.I. 15 at 16–18). For the following reasons, Plaintiff’s motion is GRANTED-IN-PART.

1. This Court has “broad discretion to manage the discovery process, and can accelerate or otherwise alter the
timing and sequence of discovery.” Williams v. Ocwen Loan Servicing, LLC , 2015 WL 184024, at *1 (D. Del. Jan. 13, 2015). When considering a motion for expedited discovery, courts use a “‘good cause’/reasonableness
analysis,” under which the moving party must demonstrate that its request is reasonable in light of the relevant circumstances. Kone Corp. v. ThyssenKrupp USA, Inc. , 2011 WL 4478477, at *4 (D. Del. Sept. 26, 2011). Courts must
balance “the need for discovery at an early juncture in the litigation against the breadth of the discovery requests and the prejudice to the responding party . . . by considering such factors as: (1) the timing and context of the discovery
requests, including whether a preliminary injunction hearing has been scheduled; (2) the scope and purpose of the requests; and (3) the nature of the burden to the respondent.” Ocwen , 2015 WL 184024, at *2 (citing Kone
Corp. , 2011 WL 4478477, at *4.

2. This Court is satisfied that expedited discovery is warranted in
this case. Plaintiff seeks relief in advance of the shareholder vote scheduled for October 28, 2021, (D.I. 1 at 4), and has requested a preliminary injunction hearing (D.I. 4) to avoid purported irreparable injury that is “threatened when
a stockholder might make a tender or voting decision on the basis of materially misleading or inadequate information,” In re Pure Res., Inc., Shareholders Litig. , 808 A.2d 421, 452 (Del. Ch. 2002). The discovery sought is narrowly
tailored to the alleged disclosure violations in Defendants’ Schedule 13D and Preliminary Proxy filings. Although Defendants claim that any deficiencies in their filings have been corrected by a revised preliminary proxy, (D.I. 15 at 7–8),
they have not amended their Schedule 13D filing and Plaintiff has identified additional purported deficiencies in the revised preliminary proxy statement, ( see D.I. 19 at 2–3). Furthermore, the tailoring of the discovery requests will
minimize any burden to Defendants.

3. Given the need for urgent action to avoid potential irreparable harm, and
the common practice of courts to approve expedited discovery in similar cases, see, e.g. , CNW Corp. v. Japonica Partners, L.P. , 874 F.2d 193, 194, 197 (3d Cir. 1989); Charming Shoppes Inc. v. Crescendo Partners II, L.P. ,
557 F. Supp. 2d 621, 623 (E.D. Pa. 2008), IT IS HEREBY ORDERED that Plaintiff’s motion to expedite discovery (D.I. 1) is GRANTED.

4. Defendants shall respond to Plaintiff’s First Set of Requests for Production of Documents within 5 days of the
date of this Order, shall produce responsive documents on a rolling basis beginning no later than 10 days of the date of this Order, and shall substantially complete production of responsive documents within 15 days of the date of this Order.

2

5. Defendants shall make themselves available for deposition within
25 days of the date of this Order. Depositions may be scheduled on three days’ notice.

6. IT IS FURTHER
ORDERED that, as discovery progresses, the parties shall discuss the need for and schedule for the pending preliminary injunction motion (D.I. 4).

/s/ Maryellen Noreika
The Honorable Maryellen Noreika
United States District Judge

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