The Business Court issued only three Opinions in September 2026.

All three were interesting to me and should be to you as well. The first (Apex Elastics) is a case about where the proper venue lies for a case designated to the Business Court. The second (Northlake Mall) is a very rare personal injury case handled by the Business Court. The third (Daedong) burrows deep into what constitutes a corporate conflict of interest transaction.

I thought about paywalling my discussion of each of these Opinions in order to force a few more paid subscriptions, but I decided to go with a carrot rather than a stick approach for now and to leave them free for all. I will start with the stick in a few weeks.

I think that I am producing good stuff. Please become a paid subscriber.

Which County is the Proper Venue for a Mandatory Complex Business Case?

One of the Defendants (a Gaston County resident) in Apex Elastics, LLC v. Tucker, 2026 NCBC 76 had been sued in Wake County. He (or his lawyer) didn't like that. He felt that the lawsuit against him was improperly venued and should have been brought in Gaston County. He made a Motion to Dismiss for Improper Venue.

Business Court Judge Houston spilled 50 paragraphs of printer ink in denying the Motion.

But It seems that everyone involved in the Motion and the resulting Opinion, including Judge Houston, overlooked G.S. §1 – 81.2 which would have completely resolved the question of the proper venue for the case. That statute says that: “venue shall lie exclusively in Wake County in any action designated by the Chief Justice of the Supreme Court of North Carolina as a mandatory complex business case pursuant to G.S. 7A-45.4 or otherwise assigned to a business court judge by the Chief Justice pursuant to the General Rules of Practice for the Superior and District Courts.” (emphasis added). This case was designated by the Chief Justice as a mandatory complex business case on December 12, 2025. (ECF No. 1) and therefore venue was appropriate in Wake County.

To be fair to all concerned, I had no idea that that this statute specifying venue in Wake County existed until researching venue in the Business Court in connection with writing about this Opinion.

Despite that statutory authority, Judge Houston went on to analyze the propriety of venue in Wake County and Gaston County. The facts of the case involve a business dispute between parties in both Wake County and Gaston County. The day to day operations of the business and its manufacturing actions were handled in Gaston County. Defendant Tucker, a resident of Gaston County, represented himself as the Plaintiff’s CFO and COO and had control over the company's financial records. The Plaintiff LLC had its "business development, sales, and customer relationships out of Wake County where its Manager resided.

If G.S. §1-76(4) was applicable, the moving party was absolutely correct that the case was properly venued in Gaston County. That says that “actions generally ‘must be tried in the county in which the subject of the action, or some part thereof, is situated’. Op. ¶23.

But that is true only if the claims “are for the “recovery of personal property when the recovery of the property itself is the sole or primary relief demanded.”

Judge Houston went to his undoubtedly well-thumbed Merriam-Webster dictionary to divine the meaning of the terms ”sole” and “primary.” Op. ¶29. He wrote that:

The common meaning of the term “primary” is “of first rank, importance, or value.” Primary, MERRIAM-WEBSTER, https://www.merriamwebster.com/dictionary/primary (last visited 9 September 2026). Moreover, the ordinary meaning of the term “sole” is “being the only one.” Sole, MERRIAM-WEBSTER, https://www.merriam-webster.com/dictionary/sole (last visited 9 September 2026).

Id.

While plaintiff was indeed seeking the recovery of personal property, at least 10 of its 13 causes of action revolved around allegations of monetary damages and requests to recover monetary damages. Op. ¶30.

The Court ruled that venue was proper in Wake County pursuant to G.S. §1-82, which provides for venue “in the county in which the plaintiffs or the defendants, or any of them reside at" the commencement of the case. Being more specific, G.S. §1-81.2 would control, though the result would be the same under either statute.

What About A Change of Venue?

Judge Houston, of course, had the power pursuant to G. S. §1 – 83(2) to change the “place of trial" “[w]hen the convenience of witnesses and the ends of justice would be promoted by the change.” Op. ¶40.

What difference would a transfer make anyway ? Judge Houston pointed out that per Business Court Rule 6.2 all pretrial proceedings would be heard in Wake County unless the court ordered otherwise. Thus, the only practical effect to the Defendant if his Motion were granted was that it would "ultimately change only the trial venue.” Op. ¶44.

What the Defendant offered in support of his motion that he said was made for the "convenience of witnesses” was the bald and unsupported statement that there were individuals "with specific knowledge of [the relevant] interactions” and other unidentified witnesses “who reside in or around Gaston County.” Judge Houston denied the Motion to Transfer Venue to Gaston County.

Murder and Mayhem at the Business Court

If you think that the diet of a Business Court Judge is limited to resolving squabbles over failed business relationships, Chief Judge Conrad's recent Opinion in Brown v. TM Northlake Mall, LP, 2026 NCBC 77 (Conrad, C.J.) lays that misapprehension to rest.

The case is about a shooting at Northlake Mall in Charlotte, North Carolina which killed one individual and severely injured another. Are you wondering why a case of this type is even in the Business Court? I was too. It was designated as "exceptional” and assigned to Judge Conrad by the Chief Justice on November 18, 2024. (ECF No.1).

And this isn't the Business Court's first go-round with the tragic events that happened at Northlake Mall. Judge Conrad denied Motions to Dismiss in the case in March 2025. The lawyers at Fox Rothschild writing the It's Just Business Blog covered that decision after it was handed down last year.

The three Plaintiffs “claim that that the owners, managers, and security agencies for Northlake Commons and Northlake Mall were negligent for having failed to provide adequate security on the night of the shooting despite being aware of the area’s history of criminal activity.” Op. ¶12. That history of criminal activity was substantial with over 1000 reported crimes over a five-year period including rape, robbery, and murder.

Now, on a more fully developed discovery record, Chief Judge Conrad granted a Motion for Summary Judgment filed by three of the Defendants. Those three were all affiliated with Northlake Commons. Defendant ARC was its owner; Hiffman was its manager; and S&S was one of its security agencies.

Northlake Commons sits adjacent to Northlake Mall. The two entities are independently owned and operated. The attack took place on the premises of the Mall. In their Complaint, the Plaintiffs had alleged that the attack on [them] began in Northlake Commons, and the attacker harassed and “tailgat[ed]” them “from Northlake Commons into Northlake Mall” in an unbroken chain of events that culminated in the shooting.

Those allegations had been enough to survive the Motions to Dismiss, but discovery established a different version of the facts. As Judge Conrad put it "the evidence is clear and undisputed.” Op. ¶16. There had been no interaction between the attacker and the Plaintiffs on the Commons property, nor had there been any tailgating from the Commons to the Mall.

Judge Conrad held that “No reasonable jury could conclude from this evidence that there was a cascade of events that began in Northlake Commons and spilled over to Northlake Mall.” He added that “[n]o reasonable jury could conclude that ARC, Hiffman, and S&S had a duty to protect individuals from criminal activity that began and ended outside Northlake Commons.” Op. ¶18.

Proximate Cause

The Northlake Mall Defendants — the owner, manager, and security company working at the Mall tried a different approach on their own Motion for Summary Judgment. They argued that their alleged failure to provide adequate security was not the proximate cause of the injuries suffered by the Plaintiffs.

That argument was a nonstarter, since the issue of proximate cause is a classic question for a jury. The North Carolina Supreme Court has stated that:

It is only in exceptional cases, in which reasonable minds cannot differ as to foreseeability of injury, that a court should decide proximate cause as a matter of law.

Williams v. Carolina Power & Light Co., 296 N.C. 400, 403 (1979).

Chief Judge Conrad held that the evidence before him was “not so one-sided.” Op. ¶21. Whether an increased level of security patrols would have prevented the attack was “far from certain. But a jury exercising ‘good common sense’ could reasonably draw that inference from the evidence.” Op. ¶22. This presented a genuine issue of material fact.

Do I like writing about personal injury cases? Definitely not. Thankfully they don't crop up in the Business Court very often.

Another Excessively Long Opinion from Judge Davis, Discussion of What Constitutes a Corporate Conflict of Interest Transaction

I have kvetched about an excessively long opinion from Judge Davis before (it was 95 pages long and 303 paragraphs), and now I am confronted with another one. It’s in Daedong-USA, Inc. v. KI Finance, Inc., 2026 NCBC 78 (Davis, J.). This one runs a mere 75 pages and goes on for 260 paragraphs. And like most Opinions written by Judge Davis, it finds multiple “genuine issues of material fact” and it does not reach a resolution.

Anyway, this post is my attempt to extract a valuable nugget of information from this Opinion. That nugget lies in a court’s authority to void a conflict of interest transaction pursuant to the Business Corporations Act. The relevant statute provides that “a conflict of interest transaction is a transaction with the corporation in which a director of the Corporation has a direct or indirect interest.” You can read the entire statute here.

The facts of the case are, of course, convoluted. Plaintiff Daedong-USA, Inc. is “primarily in the business of manufacturing and distributing agricultural equipment, including tractors, utility vehicles, and zero-turn mowers.” Op. ¶4. It competes with John Deere and Kubota, with whose products you are probably more familiar.

The dispute at issue involves Plaintiff’s direct “in-house” wholesale financing program. Op. ¶14. That kind of program stands in contrast to the way that equipment manufacturers sell their products to dealers. That is generally done through a wholesale financing or "floorplan financing" program. This means the involvement of a third-party financial institution that handles the “the necessary funding, servicing, underwriting, auditing, and administration.” Op. ¶12.

Plaintiff wanted to begin its own in-house wholesale financing program in order to compete with John Deere and Kubota, which were the only agricultural equipment manufacturers in the United States who were offering such financing to their dealerships between 2015 and 2016. Op. ¶16.

Defendant Dae was hired by Plaintiff as its Finance Manager to build the in-house financing program. Op. ¶18. Over a period of years, the Plaintiff captured a larger share of the agricultural equipment market as a result of the successful creation and implementation of its in-house financing program. Op. ¶22.

Then, in 2022, Defendant Dae announced his intention to resign to accept a higher paying position at Subaru. Plaintiff refused to match the higher offer. Both Plaintiff and Defendant Dae were concerned about the continuation of the in-house financing program. Dae proposed that he would form an independent company to which it could “outsource” its in-house financing services.

Dae formed a corporation called KIF. Defendant Dae was the sole shareholder and sole officer of KIF. Plaintiff entered into an agreement pursuant to which KIF would perform the same services for Plaintiff as its own employees had under Dae’s supervision as the company's finance manager. Many of those employees left Plaintiff’s employment to become employees of KIF. They “continued to retain access to their Daedong email accounts, continued to work out of Daedong’s Raleigh office space, and continued to perform the same services and job duties.” Op. ¶43.

Defendant Dae negotiated a steep fee in a written Services Agreement for the services to be provided by KIF. The final agreement was that KIF would charge Daedong a monthly fee of 3% of the value of all outstanding financing agreements in service by KIF was a flat monthly fee of $5,000.

Ultimately, by the time the relationship between the Plaintiff and KIF fractured and Plaintiff attempted to terminate the Services Agreement Plaintiff had paid almost $8 million to KIF. Op. ¶105.

Conflict of Interest Transaction

One of the Plaintiff's claims asserted against Defendant Peter Kim, the former CEO of the Plaintiff. was that Peter’s approval of the Services Agreement was an invalid conflict of interest transaction. The conflict arose from Peter's investment in or loan to KIF. Peter had in fact made a payment of $200,000 to KIF shortly after its formation.

Was It a Loan or A Purchase of Equity?

The nature of Peter's payment was essential to his argument that he did not have a “material financial interest” in KIF under G.S. §55-83-2(b)(1). He contended that it was a loan and that this did not meet the definition of a ”material financial interest.” He contended that only an actual ownership interest in KIF could meet the requirements of the statute.

There was a glaring issue of fact on the nature of the payment. KIF had classified the $200,000 payment from Peter as an ”equity investment” in exchange for the issuance of common stock on its tax returns . Op. ¶87. The Plaintiff’s CFO prepared internal documents that listed Peter as holding 9,000 shares in KIF.

But did it really make a difference whether it was a loan or purchase of shares?

Judge Davis rejected the Defendants’ argument that “the phrase ‘material financial interest’ should be deemed to encompass only actual ownership interests.” Op. ¶91.

He said that the:

Court must assume that our Legislature intentionally omitted the word “ownership” and used instead the broader term “financial” to encompass other types of interests that could give rise to a “material financial interest.” As a result, the Court is unable to conclude that the Legislature intended for N.C.G.S. § 55-8-31(b)(1) to be limited to self-interested transactions involving directors with an ownership interest in the other company to the transaction at issue—to the exclusion of all other types of financial interests that might implicate the director’s duty of loyalty.

Op. ¶91. I lack the faith in the General Assembly that Judge Davis appears to have. I doubt that a single legislator took a look at this provision when it was up for passage and carried the thought imagined by Judge Davis.

The Model Business Corporation Act Has Thoughts

But my lack of faith aside, Judge Davis found support for his position in the American Bar Association's most recent Model Business Corporations Act. That document expressly:

defines the term “material financial interest” as “a financial interest in a transaction that would reasonably be expected to impair the objectivity of the director’s judgment when participating in action on the authorization of the transaction.” Model Bus. Corp. Act § 8.60 (2016) (A.B.A., amended 2026); see also Potts v. KEL, LLC, 2021 NCBC LEXIS 100, at *54–55 (N.C. Super. Ct. Nov. 5, 2021) (treating the Model Business Corporation Act as persuasive authority when interpreting portions of the North Carolina Business Corporation Act).

Op. ¶92.

He went on to conclude that “there is a genuine issue of material fact as to whether Peter’s payment of $200,000 to KIF (whether characterized as a loan or an equity investment) would have reasonably been expected to impair his judgment and objectivity when authorizing Daedong to enter into the Services Agreement. . . . Op. ¶94.

This didn't end Judge Davis’ analysis. He went on to consider a number of situations in which a conflicted transaction is not voidable.

What Else Is There In This Opinion? More Questions of Fact

There is a lot more in Judge Davis’ Opinion in Daedong, but I am not willing to write any more about it. Read it if you want. Paragraphs 116-260.

There was too much attention given to the ”Duck Donuts” issue, which involved Defendant Peter Kim having the Plaintiff pay for his personal legal expenses in connection with his acquisition of a Duck Donuts franchise. I have limits of what I'm interested in writing about.

There is also some discussion of whether Defendant Kim’s conduct was protected by the business judgment rule. Judge Davis said that this issue “must be decided by a jury at trial.” Op. ¶125.

There were also fiduciary duty issues. The most interesting one concerned whether Defendant Anna Kim (Daedong’s former COO) had violated her fiduciary duty with regard to steps she was taking to prepare to leave the business. She had downloaded confidential information to a personal computer drive which she had the Corporation purchase for her.

Here's a useful statement on that point: North Carolina courts have recognized that “merely making plans to compete with an employer before leaving the company, without more, does not necessarily constitute a breach of fiduciary duty.” Op. ¶143 (emphasis added). Defendant Anna’s conduct probably went well beyond “making plans”. The breach of fiduciary duty claim against her survived