Fermi Beats Co-Founder Neugebauer’s Bylaw Change Emergency Fight

(Bloomberg Law) -- Fermi Inc. can enforce a bylaw for now that co-founder Toby Neugebauer said stripped his authority to prepare the artificial intelligence powering project for sale, the Texas Business Court ruled Wednesday.

The bylaw change, which requires a 70% of shareholder approval to enact amendments, will remain in place pending a temporary injunction hearing, Judge Brian Stagner said in a written order.

Neugebauer failed to show an immediate need to block the bylaw before he presents a fuller argument that it was passed fraudulently to entrench incumbent directors and keep him from adding ones of his choosing, the order said.

“Whether it was properly adopted or is otherwise subject to challenge remains disputed, but those merits questions do not supply the missing showing of immediate injury,” Stagner said.

Neugebauer controls approximately 40% of Fermi’s voting shares. To reach the 70% threshold, he alleges he’d need to obtain support of nearly every public shareholder, which he says is all but impossible.
Stagner’s ruling came a day after a hearing when he said Neugebauer is likely entitled to limited discoveryto prepare for a temporary injunction hearing. He urged Neugebauer’s lawyers to meet with Fermi’s lawyer to discuss the scope of that discovery.

Stagner also denied Neugebauer’s emergency request to halt a director nomination deadline and a voting share standard he is challenging.

Fermi fired Neugebauer as CEO in April — eventually making it for cause in what the company co-founder alleged was to automatically remove him from the board.
Neugebauer alleges former Texas Gov. Rick Perry, a Fermi board member, conspired with others including Cody Campbell, chair of board of regents of the Texas Tech University System, to run him out of the company and take control of the massive, 17-gigawatt data center in the Texas Panhandle.

Fermi said the termination came after Neugebauer alienated a potential client and confronted Commerce Secretary Howard Lutnick in a hostile manner at a March conference.

Fermi will ask Stagner to dismiss Neugebauer’s claims at a hearing set for Oct. 6.

Fermi is represented by Vinson & Elkins LLP and Quinn Emanuel Urquhart & Sullivan LLP.
Neugebauer is represented by Tillotson Patton.
The case is Neugebauer v. Fermi, Tex. Bus. Ct., No. 26-BC01B-0034, 9/16/26.