BlackRock Joint Venture Targeted by Corporate Overhaul Challenge

An affiliate of BlackRock Inc. and TotalEnergies SE ripped off Clearway Energy Inc. shareholders by pushing the company to overpay for an Idaho wind farm, according to the latest lawsuit challenging Delaware’s recent corporate law overhaul.

An investor is suing Clearway’s ex-CEO and controlling stockholder over the $117 million transaction, saying it involved the kind of insider conflicts that have drawn elevated court scrutiny for decades. Although Delaware Gov. Matt Meyer (D) in March signed a bill designed to replace longstanding legal guardrails with a “safe harbor” for dealmakers, the legislation goes against the state constitution in two key ways, the suit says.

First, sections of state Senate Bill 21 aimed at reining in judicial discretion violate a provision prescribing the jurisdiction of Delaware’s Chancery Court, the leading US forum for business disputes, according to the legal complaint made public May 9. Second, applying the changes retroactively—to shield transactions like the wind farm deal—is a “particularly galling” constitutional breach, the filing says.

The lawsuit against Clearway Energy Group LLC—a joint venture between TotalEnergies and Global Infrastructure Partners LP, a private equity firm bought by BlackRock last year—seeks deal-related damages and an order declaring SB21 unconstitutional.

Clearway Energy Inc. didn’t immediately respond to a request for comment Monday. Neither did the US asset manager or French energy conglomerate, which aren’t directly named as defendants.

The case is the second in recent weeks to raise the same legal argument, after a suit against Korean sportswear giant Misto Holdings Corp. An earlier case, targeting Dropbox Inc.'s move from Delaware to Nevada, made similar claims.

Divisive Legislative Push

The shareholder suit, originally filed under seal May 6, retraces the aggressive legislative push to reverse several landmark Delaware court rulings, particularly a decision involving Match Group Inc. that reaffirmed heightened scrutiny of transactions involving controlling stockholder conflicts of interest.

The filing highlights the effort’s links to Elon Musk—who has publicly assailed the judiciary that handed him a $56 billion court loss last year—and Mark Zuckerberg, who’s facing investor cases that threaten him with billions in personal legal exposure.

Scholars, shareholder attorneys, and pension funds unsuccessfully mobilized against the “billionaire’s bill,” which Meyer signed less than six weeks after rolling it out. Lawmakers implicitly rejected their argument that the legislation would backfire by tying judges’ hands and giving oligarchs a blueprint for end-running court rulings.

Backing SB21 was a coalition of white-shoe law firms, private equity lobbyists, and the state’s political establishment, all sounding the alarm that a recent crackdown on self-dealing would drive companies away from America’s corporate capital, which funds more than a quarter of its budget with billions in fees on millions of business entities.

The investor suing Clearway, Thomas Rutledge, is represented by Bernstein Litowitz Berger & Grossmann LLP, Equity Litigation Group LLP, and Morris Kandinov LLP. The joint venture and former CEO, Christopher Sotos, haven’t yet made court appearances.

The case is Rutledge v. Clearway Energy Grp. LLC, Del. Ch., No. 2025-0499, complaint unsealed 5/9/25.