Dapper Development is a real estate corporation in North Carolina engaged in the construction of new houses and renovation of real estate. Its co-owners engaged in a rancorous ownership and managerial dispute later which resulted in litigation in the NC Business Court. According to Chalif Law, this was a firm that was tightly run and there was a breakdown of trust in the firm with members accusing each other of failing to honor contracts. Notably, this real-estate lawsuit cannot be compared to the highly-publicized NBA Top Shot case against Dapper Labs. Indeed, there is often a mix up: according to Chalif Law, Dapper Development an American real-estate company and Dapper Labs a Canadian blockchain company, are not exactly comparable. Here we have deconstructed both the stories – the first one beginning with the North Carolina dispute – and pointed out why the stories are distinct.
The Dapper Development Real Estate Dispute
Dapper Development (NC) and its affiliate Tantalum Holdings began to work in the partnership. As time went by, the main players i.e. Andrew Cordell, Mason Harris, Brendan Gelson and Kyle Tudor started disagreeing on matters of business. These disputes resulted in legal claims. Via court summaries, the plaintiffs (the other co-owners other than Cordell) claimed that Cordell abused the operating agreements of the companies, acted in a manner that negatively affected the assets of the companies and abused legal mechanisms to advance his self-interest. As an illustration, they alleged that Cordell unjustly declined to buyout, froze the bank accounts of company, and otherwise sabotaged the business using illegal practices.
The primary legal allegations in the Dapper Development case are:
- Breach of Contract: Plaintiffs allege that Cordell violated the operating agreements of the LLCs which were detrimental to business. As an example, they accuse him of not honoring the buyout terms and tampering with the company finances which breached the written contracts.
- Declaratory Judgment: The plaintiffs requested the court to explain the rights and obligations of the individual members of the operating agreements. That is, they would like the judge to state what would occur should there be termination of a member or disputes.
- Implied Duty of Good Faith and Fair Dealing: In situations where contracts fail to specify all the details, parties have a good faith obligation to each other. The owners purport that Cordell was not acting in the best interest of the company, which breaches this implied covenant. They accuse him of taking decisions that favored him against his fellow members.
- Abuse of Process: Plaintiffs believe that Cordell abused the process in itself. They also accuse him of harassing other members by litigation and legal threats in order to control and gain control, thus damaging their finances and reputation.
These accusations depict the extent to which the internal conflict was harsh. They, as one of the analyses remarks, expose the extent of the conflict and demonstrate how individual arguments may evolve into organizational crises when business companions fall against each other. Claims of this sort are not unparalleled in cases of closely held companies; in cases where there is no trust, courts tend to intervene in the messing of the obligations.
Court Proceedings and Timeline
The Dapper Development case has passed through the North Carolina Business Court with some significant milestones. Subsequently, following failed talks on buyouts in mid-2023, the remaining members voted to boot Andrew Cordell out of the LLCs. Court documents indicate that the other co-owners voted majority in June 2023 to end the membership and management position of Cordell according to the operating agreements. Cordell had filed his own suit against them (on grounds that his own rights were infringed) but he then voluntarily dismissed the action. In April 2024, the other owners resubmitted their action against Cordell claiming infringement of the contract and other allegations.
The next business court decisions were on the sufficiency of the pleadings (complaints and counterclaims) to proceed. As an example, the North Carolina Business Court (Chief Judge Bledsoe) passed a case of Dapper Dev., L.L.C. v. Cordell, 2024 NCBC 63, on September 25, 2024. The court refused to grant Cordell a motion to dismiss the complaint filed by plaintiffs. It determined that the plaintiffs had sufficiently claimed breach of contract and other claims. Specifically, this court ruled that it would be unacceptable to reject a valid buyout offer and freeze company funds due to a breach of contract in the operating agreement. The judge ruled that the allegations made by the plaintiffs satisfied the low standard of notice pleading and therefore the case had a chance to go to discovery and litigation.
The other important decision was passed in July 2025 (Dapper Dev., L.L.C. v. Cordell, 2025 NCBC 33). Cross-motions on different claims were then heard by Judge Brown. Key outcomes included:
- The court upheld the fact that Cordell had been rightly displaced as a member and manager in the operating agreements. The court ruled that Cordell did not remain a member of the LLC because a majority vote had been taken in June 2023. This also implied that he was no longer a manager as all members were also managers by contract.
- The court permitted the main breach-of-contract claims to live through. It believed that allegations of breaches upon Cordell part were not sufficiently specific to be dismissed, but that the claims against him on the part of the plaintiffs were sufficient in their pleading. That is, the judge determined that factual detail on those issues (dates, provisions, alleged breaches) was sufficiently present to necessitate a trial on those matters.
- Counterclaims by Cordell were not so well off: the court dismissed his breach of fiduciary duty claim. North Carolina statutes have no general fiduciary duty on the relationship of a managing member and other members of an LLC. The court stated that there is no fiduciary duty, except when Cordell might demonstrate a de facto special relationship of trust and domination. In this case, Cordell retained some ownership rights and control hence, no special obligation was established and his claim was rejected.
Such decisions explain why, by mid-2025, the case continues to be under litigation. Many procedural matters have been adjudicated by the judges but no final decision on a trial or a settlement is reported. Concisely: The internal suit of Dapper Development is going through the preliminary hurdles and is moving forward on its own merit.
Dapper Labs and the NBA Top Shot NFT Lawsuit
This is a separate case. Dapper Labs, Inc. is a Canadian blockchain firm that created the Flow blockchain and the NBA Top Shot platform to sell digital collectibles (NFTs). In 2021, buyers of Top Shot “Moments” brought a federal class-action lawsuit against Dapper Labs, claiming that they were in fact unregistered securities. This assertion hinged on the Howey test (the long-running U.S. test of an investment contract): that plaintiffs alleged that purchasers committed money in a common enterprise and that they would get profits through the work of Dapper Labs. According to the complaint filed by Baker McKenzie, the complaint made a clear statement saying that Moments were securities since they do constitute an investment of money in any common enterprise with a reasonable probability of profits are going to be realized out of the effort undertaken by other people.
This was strenuously refuted by Dapper Labs. Its defense said Moments was like a sports trading card, such as a baseball or Pokémon card, which is not a security. After initial filings, a key ruling came on February 22, 2023. The U.S. District Judge Victor Marrero of Southern District of New York turned down the motion by Dapper to dismiss the class action. By so doing, he was the first federal judge to conclude that under certain conditions the sale of NFT could be regulated by the securities law. But Judge Marrero took care to add that not every NFT is a security and his ruling only permitted the case but not a blanket rule. The court determined that the complaint presented a plausible claim of an investment contract in that the manner in which Dapper Labs marketed and sold the Moments was specific.
The parties subsequently settled on the settlement of the class claims. Judge Marrero preliminarily approved a settlement on June 4, 2024, where Dapper Labs would pay a settlement amounting to 4 million into a settlement fund. This amount (less court-approved attorney fees and expenses) would cover all the members of the class who purchased Top Shot Moments in the specified time. According to the official notice, Dapper Labs… will pay out the Settlement Fund: $4,000,000 (the Settlement Fund) to cover claims made by individuals who bought or otherwise acquired [Moments] within the Settlement Class Period. Besides the cash payment, Dapper Labs also accepted some business modifications in order to deal with the issues expressed in the lawsuit. As an example, the company also admitted that by 2021, it no longer owned the core Flow blockchain, that various marketplaces could trade Top Shot Moments without being blocked by Dapper, and that withdrawal times were capped by the end of 2021.
Notably, Dapper Labs did not make any confessions. The settlement notice clearly indicates that the company and its CEO reject and still reject all the allegations of wrongs, fault, liability or harm. The payment of 4 million dollars was done to prevent the risk of taking to court and to offer relief to customers. Officials of the classes (by the Rosen Law and others) indicated that the median payment would be roughly 0.12 per NFT Moment (assuming that there are approximately 33 million Moments during the class period). Dapper Labs later closed the case in late 2024 after final approval by the court.
Overall, the Dapper Labs class-action concerned the issue of whether NBA Top Shot NFTs were securities; it led to a settlement of 4M in mid-2024. In comparison, Dapper Development lawsuit is in real estate contracts and co-owner obligations and was still pending in North Carolina at the time of last report.
Key Differences and Takeaways
Justice scales, gavel and two businesspersons shaking hands – business and law: a representation of law resolution. The two suits are called by the same name yet the subject matter is very different. Dapper Development the real estate company in NC was taken to court by the owners of this company against contractual and fiduciary responsibilities. Dapper Labs (the blockchain company) was involved in a public securities law and NFTs class action. In practice, this means:
- Industry and law: The dispute of Dapper Development is covered by the North Carolina LLC law and contract law. It handles property and house transactions. In comparison, Dapper Labs case implies the application of the U.S. federal securities law to digital assets. One is placed in a specialized business court; the other is in the federal court of securities.
- Outcome: The NC real-estate lawsuit remains in litigation no final decision but court decisions as of today. The NFT case was however, settled and as such, the settlement paid the class off.
- Impact: Dapper Development case is a lesson to entrepreneurs that despite cordial relationships, an operating agreement and good governance are required. The written rules will be enforced by the judges (through the deprivation of a member and refusal to grant some claims in Dapper Dev., L.L.C.). The Dapper Labs case demonstrates that those companies introducing new financial products have to pay attention to securities laws, even if digital collectibles might provoke Howey factors at times.
Lessons for Investors and Business Owners
Investments and business relationships are to be taken care of. Key takeaways include:
- Clear contracts and roles: See to it that operating contracts outline terms of buyout, voting procedures, and functions of members. Due to ambiguities, any disputes such as those at Dapper Development may arise. In case one of the partners is not behaving fairly, the courts will refer to the written and implied obligations.
- Governance matters: In closely-held LLCs, a single manager may misuse his power and this may give rise to court intervention. According to one such analysis, when trust fails, the governance is weak and courts tend to intervene to create some solutions.
- Understand regulations (for crypto/NFTs): As can be seen in the case of Dapper Labs, blockchain enterprises have to overcome securities law. The NFT purchasers ought to know that the regulators can examine the way the products are promoted and whether they expect to receive profit. The old Howey factors (money + common enterprise + profit by other effort) are still being utilized in any investment scheme.
- Prepare for litigation risk: In both cases, it is shown that litigation is an expensive and long process. Legal costs and delays should be considered by the investors. The legal suit of Dapper Development has taken years and several court proceedings on its own.
Succinctly, these cases act as a caution to everyone including the real estate and crypto parties. Check contracts and compliance problems. Keep good records. And, in case of a dispute, you should know that the courts may strictly enforce rights and in certain cases, may declare digital assets as securities under the current law.
Conclusion
The term Dapper Development lawsuit might serve as a cause of confusion since it can be used to describe two unrelated court cases. One is a case of an internal dispute between a North Carolina home-building company and its owners over contracts and control. The second is NBA collectibles and securities law made by blockchain. Knowing the facts it becomes obvious that they are different: Dapper Development (the real-estate LLC) works on the case of the member disputes under the state laws related to the business, and Dapper Labs is the activity connected with NBA Top Shot NFTs and federal securities laws. If you follow crypto news and legal updates, check out CrypStudio blogs for more simple guides and scam alerts.
By late 2025, the lawsuit against the real estate company has been pending in court and no settlement has been declared. In the meantime, Dapper Labs settled its NFT case in 2024 with a class-action lawsuit by paying the alleged victim 4 million dollars. These are the results that must not be disregarded by investors and participants: legal battles over ownership may either end in court or in a negotiated settlement. At any rate, it is important to be transparent, have clear agreements and be aware of legal rules. These two illustrations show that in either buying real estate or electronic cards, you need to understand the legal landscape, and if it is required, employ skilled legal advice to help you through it.
