I use this kind of code to create composite shapes:

     // Implicitly created undo records will be saved here
     CompositeCmd composite = this.diagram1.UndoManager.StartComposite("Create group", true);
     // Call methods that create undo records
     ShapeNode node1 = new ShapeNode();
     node1.Resize(130, 130);
     node1.Move(0, 0);
     ShapeNode node2 = new ShapeNode();
     node2.Move(0, 0);
     node2.Resize(30, 30);
     Group g = diagram1.Factory.CreateGroup(node1);
     g.AttachProportional(node2, 10, 10, 40, 40);
     node1.SubordinateGroup.AutoDeleteItems = true;
     this.diagram1.Nodes.Add(node2);
     this.diagram1.Nodes.Add(node1);
     node1.ZIndex = 0;
     composite.Execute();

The reason I'm not using Factory method is because i want to create instance of my class that inherits from ShapeNode. Unfortunately if i add 2 nodes and i undo operation i get weird result (e.g: parts of the composite shape are deleted instead of the full shape)
What Am I doing wrong?

-Corrado

Are you using try/catch around the Undo call? Seems the group undo records are in some invalid state and Undo throws an exception, beause when the group creation method stores undo information, it expects the nodes are already added to the diagram. I have rearranged the lines a bit, and this seems to work:

// Implicitly created undo records will be saved here
CompositeCmd composite = diagram.UndoManager.StartComposite("Create group", true);
// Call methods that create undo records
ShapeNode node1 = new ShapeNode();
node1.Resize(130, 130);
node1.Move(0, 0);
ShapeNode node2 = new ShapeNode();
node2.Move(0, 0);
node2.Resize(30, 30);
this.diagram.Nodes.Add(node1);
this.diagram.Nodes.Add(node2);
Group g = diagram.Factory.CreateGroup(node1);
g.AttachProportional(node2, 10, 10, 40, 40);
g.AutoDeleteItems = true;
composite.Execute();
 

I hope that helps,
Stoyan