Stability AI and Mostaque have emphasized that Hodes willingly sought to sell his shares and had personal motivations for doing so. They contend that Hodes’ regret, in hindsight, is not actionable.
Furthermore, Stability AI and Mostaque argue that the court should not entertain Hodes’ claims as he has failed to establish personal jurisdiction over the defendants. Mostaque, a U.K. resident and citizen, made the alleged misrepresentations from the U.K. in connection with stock purchase agreements for shares of a Delaware corporation. The transactions took place in Florida, where Hodes resides, indicating no connection to California.
Even if personal jurisdiction were established, the defendants maintain that Hodes’ claims lack merit. They highlight that Hodes waived his right to receive company information during the initial stock purchase, and Delaware law, which governs his claims, does not impose a fiduciary duty to disclose in a private stock sale between a director and a minority shareholder.
