GigCapital7 proposed charter changes on shareholder lawsuits

The Tip Desk · October 30, 2026 · 3 min read

GigCapital7 proposed alternative courts for shareholder claims after SEC staff questioned whether its charter could prevent some federal securities suits altogether.

GigCapital7, the merger partner of Hadron Energy (HDRN), proposed changes to its planned corporate charter after SEC staff asked whether restrictions on shareholder lawsuits could leave investors unable to bring certain federal securities claims in any court. Its April 8 response proposed alternative Delaware courts when the state's Court of Chancery lacked jurisdiction.

The practical concern involved derivative lawsuits, which shareholders bring on a company's behalf. Staff wanted a clear explanation of whether the proposed charter required derivative claims under the Exchange Act to proceed exclusively in Chancery, whether that court could hear them, and whether enforcing the restriction would consequently prevent those claims everywhere. Staff also demanded disclosure of uncertainty over enforceability.

GigCapital7 proposed revising both the interim and post-closing certificates of incorporation. The revised language would provide access to the federal district court in Delaware or other Delaware state courts when Chancery lacked jurisdiction. Its proposed disclosure expressly said Chancery could not hear Exchange Act claims and directed the derivative federal securities claims at issue to the federal court in Delaware. Those were proposed changes; the supplied material does not establish staff acceptance.

That response followed several rounds of pressure over the same restriction. In February, staff questioned whether the charter's treatment of Exchange Act claims matched the description shareholders received. GigCapital7 said it revised the disclosure. In March, staff again sought clarity, pointing to language selecting Delaware courts alongside a separate statement that the provisions did not apply to Exchange Act suits. GigCapital7 reported another revision on March 11.

The April challenge went further. Staff asked the company to balance its discussion of the Ninth Circuit's 2023 decision in *Lee v. Fisher* with a subsequently adopted Delaware law provision. Staff cited the amendment's legislative explanation that a forum restriction covering derivative federal claims must permit those claims in the federal district court in Delaware. The requested explanation concerned shareholders' ability to pursue a claim at all, as well as the location of the court.

Earlier in the dialogue, GigCapital7 also narrowed statements supporting the transaction's financial rationale. Staff had asked what supported Hadron's $1 billion valuation and sought an explanation for references to prospective financial information alongside a statement that the board received no Hadron financial projections.

GigCapital7 answered that the information concerned what it might cost a data center to have a micronuclear reactor manufactured. It reiterated that the board received no Hadron financial projections and deleted a risk factor referring to projections and forecasts. It also removed a statement linking valuation benchmarking materials to the combined company's potential for strong, sustainable free cash flow, explaining that those materials supplied no basis for that calculation. These revisions narrowed the financial claims presented to shareholders considering the deal.

The company also removed proposed approval for additional securities issuances from the merger-share issuance proposal after staff questioned bundling them together. That deletion narrowed the scope of the requested shareholder authorization.

GigCapital7 also proposed legal-proceedings disclosure in response to staff's April request about a former employee matter. The proposed disclosure described an expected $16.345 million settlement, comprising $100,000 in cash and the remainder in stock, with payment expected before the merger closed. The supplied correspondence does not establish staff acceptance of the proposed disclosures.

Source: SEC staff letters and company responses dated January 15–April 8, 2026, released October 29, 2026.