---
title: "The Notetaker Doesn’t Work for You"
description: "Somewhere in Texas there's a boardroom that wishes it had checked its meeting software settings. On August 28, 2026, Vice Chancellor Lori Will of the Delaware Court of Chancery (my favorite Court of Chancery!) ended a proxy fight at Empery"
url: https://kaynemcgladrey.com/blog/the-notetaker-doesnt-work-for-you/
date: 2026-09-24
modified: 2026-09-24
author: "Kayne"
image: https://kaynemcgladrey.com/wp-content/uploads/2026/09/pexels-icon0-1393315.webp
categories: ["Blog"]
type: post
lang: en-US
---

# The Notetaker Doesn’t Work for You

Somewhere in Texas there’s a boardroom that wishes it had checked its meeting software settings. On August 28, 2026, Vice Chancellor Lori Will of the Delaware Court of Chancery (my favorite Court of Chancery!) ended a proxy fight at Empery Digital, a Bitcoin treasury company headquartered in Texas, by ruling that its board had no right to reject an activist’s director slate. The [opinion](https://courts.delaware.gov/opinions/download.aspx?id=400580) runs 48 pages of careful contract analysis, and it’s already being recycled into a dozen earnest advisories about advance notice bylaws. That’s the wrong lesson, or at least the smaller one.

Here’s the situation that matters. Empery raised $500 million at $10 a share in July 2025 to buy and hold Bitcoin. By January 2026 the stock traded at 73% of the value of its own coins, net asset value (“NAV”) in the local dialect, which is corporate finance’s way of inviting trouble. An activist fund, ATG Capital, showed up with a nine-person slate and what the board suspected, correctly as it turned out, was a hidden partner and a large short position in Bitcoin exchange-traded funds (“ETFs”) hedging the whole play. The board spent a 13-page rejection letter cataloguing deficiencies, then abandoned all but two of those grounds by the time trial rolled around, which the court noted with the driest possible line in the decision. “Advance notice bylaws are not moving targets.”

The board lost because its bylaws, read as written, never required the disclosures it demanded. The court “cannot … enforce a requirement that a bylaw does not contain.” Coordinating with another investor wasn’t a disclosure trigger. Shorting Bitcoin ETFs wasn’t either. When the board tried reinterpreting a federal “participant” definition to sweep in its suspected co-conspirator, the court applied a canon of statutory construction older than the internet and sent everyone home. Fine. Draft better bylaws.

Now the part your outside counsel’s client alert didn’t dwell on.

## The other record in the room

For the same board meetings, the court held two documents. One was the official minutes, which is the carefully laundered narrative of what the board decided and why. The other was the AI-generated transcript of those meetings, the record nobody curated, which captured what was said. They disagreed, and the disagreement is the whole story.

| Meeting | Official minutes said | The AI transcript said |
| --- | --- | --- |
| Feb. 2, 2026 (rights plan adoption) | The plan protects stockholders while the company closes the NAV gap | Capping the activist at 12.5% makes a proxy fight “not worth it,” and the plan was “necessary in order for the board to remain in its position” |
| March 26, 2026 (nomination rejection) | Deficiencies identified, rejection recommended | The rejection letter “threw in the kitchen sink,” no single omission was detrimental, ATG was “sloppy” in the aggregate, and the objective was to reject and “see what” the activists did |

Nobody contested the authenticity of those transcripts. They came in as joint trial exhibits, cited without qualification in the sections of the opinion where the court assessed the board’s actual motivations. The transcripts didn’t decide the case, strictly speaking. The bylaws did that.

> The transcripts didn’t decide the case. They decided who the board was while they were deciding it.

Everything from the pretextual analysis to the court’s patience with the board’s after-the-fact legal theories ran downstream of that second record.

If that feels familiar, it should. In March, the same vice chancellor read a CEO’s ChatGPT logs aloud from the bench in [a Delaware earnout dispute](https://kaynemcgladrey.com/blog/your-ai-wont-testify-for-you/), matched the model’s suggestions against the executive’s subsequent sabotage of his own subsidiary, and reinstated the executives the CEO had fired. In that case the human’s prompts convicted him. Here, nobody in the boardroom did anything wrong by talking, because deliberation is the entire point of a board meeting, including the blunt parts, the hypotheticals, the tactical asides about who benefits. The transcription tool converted ordinary candor into motive evidence without anyone in the room signing up for that conversion.

The mirror image is sitting right there in the same opinion. Once the activists got serious in late January, they ditched their phones for Signal with auto-delete enabled and destroyed every message between them. It didn’t help them either. The court found coordination was more likely than not, then held that even a spoliation inference couldn’t rewrite a bylaw. Read the two together and you get the uncomfortable synthesis of 2026 litigation so far. Manage your records too aggressively and you’re hiding evidence; keep them faithfully and an AI tool you barely remember enabling testifies about your state of mind. Deleting isn’t an answer and neither is innocence.

## The consent problem at the front door

Two weeks before the Empery opinion, a federal judge in San Jose handed down an order in a class action against Otter.ai that turns the recording question from an etiquette issue into a legal one. The [order](https://storage.courtlistener.com/recap/gov.uscourts.cand.454675/gov.uscourts.cand.454675.68.0.pdf), dated August 13, 2026, let the bulk of the privacy claims proceed against the company whose Notetaker joins Zoom and Teams calls as a “silent participant.”

The claims that survived matter more than the ones that didn’t. Wiretap claims under the federal Electronic Communications Privacy Act (“ECPA”) and California’s Invasion of Privacy Act (“CIPA”) both cleared the pleading stage. The plaintiffs alleged Otter retains conversation content and voiceprints and uses them to train its own models, which can make the vendor a third-party eavesdropper rather than a mere extension of whichever user clicked “invite.” Otter’s party-consent defense went nowhere, with the court observing that committing a tort and seeking a profit aren’t mutually exclusive. Illinois plaintiffs survived on biometric claims built on voiceprint collection.

The upshot: consent from the human who clicked “invite” may not cover the vendor sitting behind the bot.

The dismissals are instructive too. Plaintiffs who said their intercepted conversations were merely “sensitive” got bounced for vagueness, while the one who described medical calls with his doctor survived. Courts will demand specifics about the harm, which means your legal exposure to a meeting bot depends heavily on what was being discussed when it joined uninvited. A board discussing a control contest, or counsel walking directors through litigation risk, sits squarely on the wrong side of that line.

Now, the Chancery opinion never names the transcription tool in Empery’s boardroom. Two cases, one theme, and no shared vendor, so don’t let anyone sell you a neat little narrative directly connecting them.

## The questions nobody has answered

Three open items are worth tracking, because they’ll be litigated within the next few years.

- Whether an AI transcript counts as a “record of board action” under Delaware’s books and records statute after the 2025 amendments to Section 220, which could put transcripts in stockholders’ hands through a Section 220 demand, no lawsuit required
- How courts will handle authentication and reliability when transcripts are contested, since speaker misattribution and dropped negations in a machine record you didn’t proofread is a new and novel kind of evidentiary problem
- What happens when a director runs a personal notetaker nobody authorized, creating a record outside the company’s systems, retention policy, and litigation holds, and that record surfaces in discovery later

That third one isn’t hypothetical. It’s just undiscovered.

## What to do while the law catches up

This comes up in client conversations I have, and the question boards keep asking is backwards. It isn’t whether to allow transcription, it’s who controls the record it creates. The same court that read those transcripts is the one that forgave Marriott’s imperfect security oversight in the Starwood breach litigation, drawing the line between “a flawed effort and a deliberate failure to act.” Delaware rewards documented, imperfect governance. It punishes blank stares. With that standard in mind, the boring work looks like this.

1. Turn transcription off by default for privileged sessions, executive sessions, and anything touching litigation or control contests. Where counsel’s providing advice, this isn’t a close call, because a vendor-generated record of a privileged discussion creates waiver problems no one has sorted out yet.
2. Write down who may enable or disable transcription, and whether directors can run personal notetakers on company calls. If the answer is no, the policy should say so before the first incident, not after.
3. Tie retention to minutes. Once the board approves the minutes, delete the transcript unless a litigation hold says otherwise, because once a dispute is reasonably anticipated, transcripts are electronically stored information like anything else, and that moment arrives earlier than you expect.
4. Verify the vendor terms yourself, meaning the enterprise tier, model training off by default, negotiated deletion, and confirmed data residency. If your board platform can’t produce those terms in writing, treat the transcript as already leaked.
5. Train directors and executives to assume their remarks will be read verbatim, without tone or context, by a judge. The hypothetical they floated to stress-test a position reads like a confession two years later.

In other words, the notetaker doesn’t work for you, never has, and produces a record optimized for nobody’s litigation posture. For decades the minutes worked precisely because they were the only record, drafted by the corporate secretary, approved by the board, and structured around decisions rather than raw talk. That monopoly is over.

I sat on a panel earlier this month digging into where [AI liability](https://kaynemcgladrey.com/blog/when-ai-gets-it-wrong-who-actually-owns-the-liability/) lands when models screen your hires, draft your disclosures, or sit in your meetings, and the recurring theme was that courts reward organizations that can reconstruct what happened. A board that can produce its transcription policy, its retention schedule, and the name of the person who authorized the tool will be fine. Everyone else is betting their next proxy contest on the goodwill of a machine’s memory.