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Paul, Weiss recently won a motion to stay proceedings pending the result of an ongoing arbitration on behalf of mineral and engineered material products company Covia Holdings LLC and New Covia Energy LLC in a dispute with two former senior executives in the Delaware Superior Court. The former executives assert various claims related to their alleged entitlement to certain restricted stock units in Covia.

In November 2024, former Covia executives Brian Richardson and Charles Giaudrone filed arbitrations in Ohio, where the company is headquartered, alleging that Covia failed to pay them severance benefits upon the terminations of their employment. In December 2024, after initiating the arbitration proceedings, both Richardson and Giaudrone filed lawsuits in the Delaware Superior Court seeking a declaration that Covia’s July 2024 internal reorganization separating its energy business unit from its industrial business unit satisfied the definition of an “Energy Divestiture” under the terms of their restricted stock unit agreement.

Covia moved to dismiss the Delaware claims for lack of subject matter jurisdiction or stay the action pending the result of the ongoing arbitration.

Judge Meghan Adams agreed with Covia, finding that the parties had agreed to arbitrate questions of substantive arbitrability and that a narrow, permissive carveout in the arbitration agreement for the parties to pursue injunctive relief in courts was not so broad that it would override that agreement. Judge Adams also rejected the plaintiffs’ argument that a consent-to-jurisdiction clause in the restricted stock unit agreements was a mandatory forum selection clause that required the parties to bring disputes related to the restricted stock units in the Delaware courts, and ordered that the Delaware proceedings be stayed until the arbitrator decides whether the former executives’ declaratory judgment claims are subject to arbitration.

The Paul, Weiss team includes litigation partners Gregory Laufer, who argued the motion, and Matthew Stachel and counsel Aubrey Smith; and executive compensation counsel Bruce Goldberger.