Merger Related to Eighteenth Century Pirate Ships Fails in Delaware Court of Chancery

An analysis of the Delaware Chancery Court’s decision in Buddenhagen v. Clifford

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Published March 19th, 2026

Written by Jay Gelhard

In May 2024, Vice-Chancellor Nathan Cook of Delaware’s Chancery Court issued a ruling in a shareholder’s lawsuit against a company that owns a shipwreck. In the case, Paul S. Buddenhagen v. Barry Barry L. Clifford,  the plaintiff, Buddenhagen, was a minority shareholder in Maritime Explorations Incorporated, a corporation which owns the only known fully authenticated pirate shipwreck, the Whydah Gally (1717). Buddenhagen alleged improper conduct by the directors of MEI, Barry Clifford and Robert Lazier, and challenged the legality of a 2018 merger carried out by MEI with an entity called Whydah International. However, Vice Chancellor Cook rejected Buddenhagen’s claims of shareholder misconduct due to a lack of feasible evidence—most of MEI’s records had been destroyed in a flood—and the doctrine of laches, a principle in equity preventing a party from enforcing a claim if an unreasonable amount of time has lapsed. Buddenhagen did prevail in one area: Vice Chancellor Cook ordered the rescission of the 2018 merger. 

MEI completed the controversial 2018 merger with the hopes of selling the treasure found in the shipwreck. When the Whydah Gally sank off the coast of Cape Cod in 1717, it was rumoured to be carrying the treasure of at least 53 other ships it had robbed. Barry Clifford discovered the shipwreck in 1982 and successfully filed an admiralty action seeking sole title to the Whydah. Clifford and Lazier later formed MEI to excavate the reported treasures, along with a separate company, Whydah International Incorporated, to attract speculative investments. Clifford and Lazier owned 50.7% of the stocks of MEI, while the remaining 49.3% were split among various shareholders, including Buddenhagen. Clifford and Lazier were also majority shareholders in Whydah International. Buddenhagen, who was engaged as a business consultant by Clifford-founded Maritime Explorations Incorporated between 1991 and 1996, became a shareholder through his consulting services. In 2018, Clifford and Lazier decided to merge MEI and Whydah International before selling the treasure without consulting the minority shareholders of MEI. The effect of the merger was to significantly dilute the ownership of the minority shareholders, which decreased from 49.3 % to less than 10%. As for Buddenhagen himself, he awoke one morning to find out he owned only 1% of the newly merged company. To calm his concerns, Lazier and Clifford assured Buddenhagen that they were close to uncovering “the mother load” of treasure. 

Clifford and Lazier did not consult any outside expert with regards to the merger. Indeed, they explicitly refused to bring in a financial advisor to assess the value of MEI. Despite this, Clifford remained optimistic about the value of the treasure. In an email to shareholders, he claimed that the treasure was worth at least $200 million. However, a financial expert who testified at trial, Dr. Brett Marglin, valued the treasure at a mere $1.08 million at the time of the merger. Thus, Buddenhagen not only saw his shares diluted, but whatever money he expected to receive fell quite short of his expectations. Vice Chancellor Cook deemed the merger illegal because Clifford and Lazier did not discuss their plan to merge MEI and Whydah International with shareholders of MEI. Vice Chancellor Cook called the merger blatantly illegal, writing,  “Of note, Defendants were the only ones negotiating the Merger on MEI’s behalf – against themselves.” Vice Chancellor Cook concluded that the facts of the case necessitated a rescission of the 2018 merger and a restoration of Buddenhagen’s original stock ownership.

Though Buddenhagen prevailed on the issue of the merger, he did not prevail on claims regarding alleged fiduciary misconduct by Clifford and Lazier, many of which went back to the 1990s. Vice-Chancellor Cook called Buddenhagen a “slumbering shareholder” who had waited too long to press these claims, specifically citing laches, a key principle of equity. The doctrine of laches states that a delay in bringing an action unfairly harms a defendant since circumstances change and evidence can be lost over time. Buddenhagen only brought up previous fiduciary misconduct after he discovered that his ownership had been diluted in the 2018 merger. Buddenhagen had simply waited too long to sue—the majority of the needed evidence was destroyed years ago and Robert Lazier had passed away. In the end, Buddenhagen merely found himself with minority ownership in an undervalued company. 

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