Exobox Technologies Corp (EXBX)

[TheLaserGuy]

AMFs

The ruling in Delaware Chancery Court by Vice Chancellor J. Travis Laster also offers a glimmer of hope to other investors who suffered steep losses on Chinese companies that listed their shares in the U.S., but have plummeted in value in the past two years.

Such investors were pounded by billions of dollars in losses as short sellers targeted U.S.-listed Chinese companies, auditing firms backed away from previous work on financial statements and regulators questioned the accounting and disclosure practices of some companies.

The Delaware ruling came after ZST Digital Networks Inc. ZSTN +6.06% a network-equipment supplier, flouted an earlier court order to give the shareholder access to "certain books and records" of the company.

Related Read the Ruling: Delaware Court Document

Peter E. Deutsch, who runs a wine importer, began buying ZST shares in 2011 and eventually accumulated 3.9 million shares. But ZST ran into questions over its accounting in 2012, ultimately prompting Mr. Deutsch to sue.

The judge granted a request by Mr. Deutsch for a "put option" that allows him to force ZST to buy back his shares for $8.21 apiece, or as much as $32.3 million. That per-share price is based on ZST's book value in the last financial statements the company filed with the SEC. The shares recently traded for $1.39 a share.