Delaware court orders Collectable Sports Assets to release records to investor

A Delaware court has ruled in favor of an investor seeking clarity into the operations of a fractional sports memorabilia platform, a decision that could have broader implications for wealth managers navigating niche alternative investments.

In a May 29 ruling, the Delaware Court of Chancery ordered Collectable Sports Assets, LLC to turn over a range of business documents to investor Justin Cornett. The court found that Cornett—a longtime sports memorabilia collector and early investor in the platform—had legitimate reasons to request records, including assessing the value of his holdings and investigating potential mismanagement.

Collectable, founded in 2020, offers fractional shares in investment-grade sports memorabilia. At one point, Cornett’s portfolio included stakes in 23 different series and was valued at over $1 million. As of trial, he held investments in 11 series, including a Luka Doncic game-worn rookie jersey and a Wilt Chamberlain high school uniform.

The company, structured as a Delaware series LLC, initially saw strong demand. But by 2023, it was facing operational headwinds. In a May 2023 Form 1-K filed with the SEC, Collectable disclosed “significant doubt that it [would] be able to operate for another 12 months unless it receive[d] additional liquidity.” The company had also stopped conducting IPOs, cited high holding costs, and faced challenges liquidating its assets.

In June 2023, Collectable was acquired by Fractional Ownership Holdings, LLC—a Wyoming company owned by Philip Neuman—for $1.6 million. Neuman later also acquired Collectable Technologies, Inc., the sole member of CS Assets Manager, LLC, which manages Collectable. Following the acquisition, co-founder Ezra Levine resigned, and President and COO Jarod Winters was terminated in April 2024.

Cornett, increasingly concerned, noted a breakdown in member communications and discovered Collectable assets displayed at the Dretore Investment Gallery, affiliated with NoCor Investment Fund—another Neuman-controlled entity. In October 2024, he submitted a formal demand for records under Delaware law. When Collectable failed to respond, he filed suit on November 1, 2024.

The Court found that Cornett had proper purposes—valuation and investigation of possible wrongdoing—and granted inspection of key records. The judge ordered the company to produce materials related to its financial condition, member list, and formal documents surrounding its failure to file a required annual report, halt of secondary market trading, and relocation of certain underlying assets.

The court denied one request—for an explanation regarding the termination of Winters—because it did not involve actual records. While the judge upheld confidentiality provisions in Collectable’s operating agreement, he rejected the company’s attempt to block Cornett from contacting other members, stating such communication is permitted as long as confidential information isn’t improperly shared. Cornett is barred from using the records to contact asset storage facilities.

The court declined to award attorneys’ fees, finding no evidence of bad faith, but did shift costs to Collectable, naming Cornett the prevailing party. Both sides had agreed the ruling would be final and appealable only to the Delaware Supreme Court.

For wealth managers, the case underscores the importance of governance, transparency, and oversight—especially in fast-growing corners of the alternative investment market. While platforms like Collectable operate outside the scope of traditional funds, the risks tied to poor oversight and opaque operations remain the same.