The Supreme Court has affirmed the Court of Chancery decision that Section 226 of the DGCL permits the Court to appoint a custodian to sell a Delaware corporation when the board of directors and stockholders are deadlocked...more
It is well understood that minority stockholders have limited rights to object to a short-form merger under Delaware law. This decision affirms that minority stockholders cannot challenge the merger on fairness grounds...more
After the enactment of Section 109(b) of the Delaware General Corporation Law, one would have thought that fee-shifting bylaws were invalid. However, this decision deals with another attempt to shift fees, this time when a...more
This is another decision in the continuing development of Delaware law on how to determine the acquired company’s fair value in an appraisal action. The decision carefully reviews the more recent opinions on whether the...more
Appraisal petitioners normally agree to consolidate their actions, on which law firm(s) will represent them, and on how their common objectives will be carried out. That did not happen in this case: the petitioners disputed...more
This is an important decision because it clarifies when a stockholder loses standing to bring a fiduciary duty case because he sold his stock. Briefly, breach of fiduciary duty claims may be direct (belonging to the...more
When a stockholder files a derivative suit she can avoid dismissal under Rule 23.1’s pre-suit demand-on-the-board requirement by showing that a majority of the directors were not independent enough to fairly consider her...more
Among the most-discussed issues in corporate law today is whether appraisal actions should be curtailed. Triggered by above-merger price awards after deals were shopped in the market, the argument is that the appraisal...more
This decision deals with the always difficult world of what beta to use in a DCF valuation....more
This is an excellent review of the law governing when the Court will enjoin board action that affects the ability of stockholders to elect directors....more
Delaware does hold that the dismissal of a derivative suit in another jurisdiction may preclude the prosecution of a similar derivative suit in Delaware. ...more
It is well understood that to be entitled to the appraisal of your stock you need to not vote for the merger. However, in the complex world of how shares are held by beneficiaries and depositories, it is easy to overlook the...more
Perhaps the longest-running litigation in recent Delaware Court of Chancery history has been settled, after the plaintiff class lost at trial. The Jan. 20 settlement hearing in In re Trados Shareholder Litigation, Con. C.A....more
This initial formal decision by the recently-appointed Vice Chancellor shows her firm commitment to the tradition of the Court of Chancery to produce well-written, scholarly opinions. ...more
This is an interesting decision for two reasons. First, it explains when directors might have a duty to cause the company to make disclosures to the stockholders about transactions that do not require the stockholders’ vote....more
This is a precedent-setting decision in the books and records context. In it, the Court imposes an “Incorporation Condition” on the stockholder’s inspection. That is, a stockholder who establishes a credible basis to inspect...more
First, the Court explores the effect settlement agreements in two federal court actions might have on claims in a Delaware action. The decision holds that the settlements did not release the Delaware plaintiffs’ derivative...more
This is a potentially significant decision because it interprets a change in control clause to include a change in beneficial ownership of an entity's securities. Hence, not only actual changes in ownership may trigger such...more
When the merger price is the product of a full market check by a disinterested Board without interference from a controller and is approved by the stockholders, the Court of Chancery is inclined to give that price weight in...more
In this unusual factual circumstance, the Court denied a motion to dismiss a claim against an investment banker for aiding and abetting a board’s alleged breach of its duty to act with care. Note that the board itself was...more
Much has been written lately about why suits objecting to a merger are so bad. The complaint is that those suits lack any merit and are filed only to get a fee for the plaintiffs bar, after a quick settlement. As evidence of...more
Here the banker failed to make a timely disclosure to its client that it had previously pitched the buyer to make a bid for the client. The Court found that in the context of a motion to dismiss the Board may have breached...more
There has been some debate about the effect of an approval by a majority of a company’s stockholders of a transaction with an unrelated third party - does that invoke the Business Judgment Rule? The question arose over...more
It is often said that when a majority stockholder issues more stock to himself at an unfair price that is a direct claim and not derivative. But as this decision points out, that is a little too simplistic....more
This decision has been widely reported as signaling the Court of Chancery’s intention to cut back on the wave of suits filed over almost every merger.
First, the Court held that the scope of any release will be affected...more