December United Rentals v RAM Holdings Bernstein v TractManager Fogel v US Energy Systems United Rentals v RAM Holdings LAMPERS v Countrywide Financial November Cox v Crawford-Emery Globis Partners v Plumtree Software Ryan v Gifford Sample v Morgan [more...]
Select Delaware Opinions 2008 2007 2006 2005 2004 Earlier March NAMA v World Market Center 3.04 s Schoon v Smith 2.12 S Law Debenture v Petrohawk 1.23 S March Holman v Northwest Broadcasting [more...]
Summary Secondary buyout of private equity portfolio company Publisher of special interest magazines e.g., Popular Woodworking , Scuba Diving Sold by Providence Equity Partners Bought by ABRY Partners Stock purchase agreement Target gave standard representations Re: business, operations and financial statements Seller gave only limited [more...]
Summary 2 nd Circuit rules that proxy access bylaw proposals can't be excluded under Rule 14a-8(i)(8) Overturns a 2005 SDNY decision in favor of AIG Court declined to defer to SEC's interpretation of the rule Rule 14a-8(i)(8) is the election exclusion Rule 14a-8(i) allows companies to exclude specified types of shareholder proposals from the [more...]
AIG Retirement v Barbizet Del Ch 2006 Opinion 7.11.06 Vice Chancellor Chandler Introduction + Background I. Legal standard II. Analysis III. Demand is excused III.A Plaintiff alleges individual defendants were beholden III.A.1 Adequate allegations of adverse interests III.A.2 Breach of Fiduciary Duty Claim III.B Conclusion IV. [more...]
Summary Disclosure of merger discussions For purposes of Rule 10b-5 context, adopts standard of materiality set forth in TSC Industries Inc v Northway Inc 426 US at 449 96 S Ct at 2132 Rejects "agreement-in-principle as to price and structure" as the bright-line rule for materiality Reject the proposition that "information becomes [more...]
Blackmore Partners v Link Energy Del Ch 2005 Opinion 10.14.05 Vice Chancellor Lamb Introduction + Facts I Links Emergence From Bankruptcy I.A. The Plains Transaction I.B. Links Insolvency I.C. The Plaintiffs Allegations I.D. Applicable Standard II. Distinguishing Orban v Field III. Analysis IV. The Companys Fiduciary Duty To Creditors [more...]
Calpine v Bank of New York Opinion 11.22.05 Vice Chancellor Strine Introduction + Background I The Notes I.A. Designated Assets I.B. Use of the Rosetta Proceeds I.C. Analysis II. Calpines Use Of The Rosetta Proceeds To Acquire Already-Extracted Natural Gas For Burning In Its Power Plants Did Not Involve The Purchase Of Designated Assets [more...]
In re Caremark Del Ch 1996 Opinion 698 A2d 959 Background I Events Prior to the Government Investigation I.A Government Investigation and Related Litigation I.B Caremark's Response to the Investigation I.C Federal Indictments Against Caremark and Officers I.D Settlement Negotiations I.E The Proposed Settlement of this Litigation I.F Legal Principles [more...]
Cede & Co v JRC Acquisition Cort, and 800-JR Cigar, Inc. (Del Ch 2004) Memorandum Opinion + I. Background I. The Stipulated Facts I.A. The Experts I.B. Legal Framework II. Analysis III. DeVinney's Comparable Transactions Analysis III.A. Discounted Cash Flow Analysis of DeVinney [more...]
Projections Recent developments in disclosure of projections - CheckFree and SEC staff views Cleary Gottlieb Steen & Hamilton LLP USA - January 28 2008 A recent decision of the Delaware Court of Chancery addresses the circumstances in which disclosure of financial projections in a proxy statement seeking shareholder approval of an M&A transaction will be required. [more...]
Summary Proposes changes to entire fairness standard Wouldn't apply to mergers where controlling stockholder obtains approval from Independent directors, and Minority shareholders Business judgment rule would instead apply Would cut back on Kahn v Lynch Dicta from Vice Chancellor Strine Unnecessary to his decision in Cox Still, opinion is [more...]
DeLucca v KKAT Management (Del Ch 2006) Opinion 1.23.06 Vice Chancellor Strine Introduction + Background I Relationships Among the Parties I.A. The New York Action I.B. Procedural Framework II. Analysis III. DeLucca Is An Indemnified Person Under The Operating Agreements III.A. Must DeLucca Prove She Suffered Losses Before She Is Entitled [more...]
Disclosures New Jersey Chancery Court applies business judgment rule to rebuff shareholders challenge to proxy statement Drinker Biddle & Reath LLP USA - December 19 2007 In Oldham v. Dendrite International, Inc. (Ch. Div., May 2, 2007), a shareholder of Dendrite International, Inc. (Dendrite) sought to enjoin a shareholder vote to approve a merger between Dendrite and Cegedim, S.A. [more...]
Summary Disney management has been embroiled in litigation over hiring and firing of Michael Ovitz since 1997 Final decision reaffirms application of business judgment rule Supreme Court rejects theory that bad faith can include acting without adequate information and deliberation While such conduct can violate the duty care , by ruling that it [more...]
Dweck v Nassar (Del Sup 2005) Opinion 11.23.05 Vice Chancellor Lamb Introduction + Facts I. The Parties I.A. The Purported Stockholders Agreement I.B. Dwecks Termination I.C. Applicable Standard II. Analysis III. Breach Of The Alleged Stockholders Agreement III.A. Promissory Estoppel II.B. Breach Of Fiduciary Duty Claims III.C. Conclusion IV. [more...]
In re eBay (Del Ch 2004) Opinion 1.23.04 Revised 2.11.04 Chancellor Chandler Delaware website version Hyperlinked index Introduction + Background I . Analysis II. Demand Futility II.A. Corporate Opportunity II.B. Aiding and Abetting Claim II.C. Conclusion III.
Delaware Chancery Opinion May 2004 Opinion - Jacobs Facts I Parties I.A Plaintiffs I.A.1 Defendants I.A.2 ◊ ECM defendants I.A.2.a ◊ Board defendants I.A.2.b Formation of ECM I.B Aborted Innovative-ECM merger I.C Privatization pursued I.D Second special committee - Negotiation I.E Privatization approved I.F Issues [more...]
Encompass Services Holding Corporation v Prosero Incorporated (Del Ch 02.03.05) Memorandum Opinion + Facts I. Analysis II. Section 262 and Tolling II.A. Encompass' Basis for Tolling II.B. The Bankruptcy Court's Exclusive Jurisdiction II.B.1. The Bankruptcy Court's "Related To" Jurisdiction II.B.2. The Court of Chancery's Exclusive [more...]
Summary Shareholders suit dismissed on the basis of shareholder ratification Court of Chancery decision upheld by Delaware Supreme Court Delaware Supreme Court Opinion March 2006 Opinion - Justice Randy J. Holland PDF version Affirms Delaware Chancery decision Hyperlinked Index Introduction + [more...]
Ng v Heng Sang Realty Chancery April 2004 (Del Ch 2004) Opinion The Facts I. The 1998 and 1999 Shareholders' Meetings I.A. The Merger I.B. The Parties' Contentions and the Issues Presented II. Analysis III. Preliminary III.A. The Tax Rate Issue III.B. The SG&A Expense Issue III.C. [more...]
http://react.bracewellgiuliani.com/reaction/announcements/Delaware.pdf Exercise of Delaware Appraisal Rights Still a Long and Uncertain Process September 28, 2007 When minority stockholders feel as if they have not received fair value as the price in a "cash-out merger" transaction, they often consider seeking appraisal rights for their stock. In a recent decision, Highfields [more...]
Summary Lawsuit over acquisition of Bank One by JP Morgan Chase Deal page Alleged that JPM overpaid for ONE By paying a premium when a no-premium deal was on offer No-premium deal was contingent on ONE's CEO becoming CEO of combined company According to press accounts Plaintiffs also claimed that proxy statement failed to disclose the [more...]
Kahn v Tremont Corp (Del 1997) 694 A2d 422 (Del 1997) Background + Facts I Entire Fairness Applied II Analysis III Fair dealing III.A Disclosure issues III.B Conclusion IV [more...]
Larue V. DeWolff, Boberg & Associates, Inc. Overview Supreme Court overturns Fourth Circuit, 9-0 Holds that ERISA authorizes participants of defined contribution pension plans -- such as 401(k) plans -- to sue ERISA fiduciaries under ERISA 502(a)(2) to recover losses arising from a breach of ERISA fiduciary duties to [more...]
Overview Overrules Dr Miles decision; Vertical price restraints are to be judged by the rule of reason 5-4 decision Dr. Miles Medical v John D Park & Sons made it per se illegal under 1 of the Sherman Act for a manufacturer and its distributor to agree on the minimum price the distributor can charge for the manufacturers goods ( [more...]
Cancelling Options Cancelling underwater stock options in a change in control transaction without taking a bath Weil Gotshal & Manges LLP USA - October 3 2007 The Delaware Chancery Courts recent decision in Lillis v. AT&T provides guidance concerning the right of acquirors to cancel employee stock options for no consideration in acquisition transactions. [more...]
LAMPERS v. Crawford (Caremark) Delaware Chancery Summary Legal challenge to Caremark - CVS merger Delaware Chancery twice delayed merger vote, but declined to enjoin the merger despite finding improprieties Court left fate of merger to shareholder vote after requiring additional disclosures CVS/Caremark merger closed on 3.22.07 See [more...]
Overview Case addressed the extent to which state law securities fraud class action claims were preempted by the Securities Litigation Uniform Standards Act of 1998 (SLUSA) The Court unanimously ruled that SLUSA barred state law "holder" claims, which are based on losses caused when a shareholder retains stock due to fraud instead of [more...]
Dobler v Montgomery Cellular Holding (Del Ch 2004) Opinion I. II. The Parties II.A Background II.B. The Challenged Transaction II.C. The Experts II.D. The Valuation Methods II.E. The Respondents' Valuation Method II.E.1. The Petitioners' Valuation Method II.E.2. III. IV. The Respondent's Expert [more...]
In re MONY Group (Del Ch 2.17.04) MONY I Opinion 2004 WL 303894 Summary conclusion I Facts II Parties II.A MONY's problems - Merger talks II.B Change In control agreements - AXA's initial bid II.C Board amends the CICs II.D AXA's current bid II.E Claims II.F Standard for preliminary injunction III Revlon analysis IV Adequacy of proxy [more...]
Summary Legal challenge to buyout of software company Sale of company followed standard script Use of a special committee of independent directors 3% break-up fee Post-signing window shop period Shareholder litigation challenged process and disclosures Delaware Chancery finds that directors breached their Revlon duties by excluding strategic [more...]
Newcastle Partners v Vesta Insurance (Del Ch 2005) Opinion 11.15.05 Revised 11.16.05 Vice Chancellor Lamb Introduction + Facts I. Analysis II. Conclusion III. Commentary Law firms Morris Nichols Related Topics Delaware General Corporation Law [more...]
Summary Controlling shareholder saved company from bankruptcy But Board still breached duties to minority shareholders Boston University was the controlling stockholder in a financially troubled biotech Seragen would have failed but for continued investments from BU BU's investment (and involvement of BU's President) were criticized at [more...]
Orloff v Shulman (Del Sup 2005) Opinion 11.23.05 Vice Chancellor Lamb Introduction + Facts I. The Parties I.A. Prior Litigation I.B. The Mays Transactions I.C. Third-Party Transactions I.D. Vacant Properties, Loss-Making Properties, And Rockridge Farm I.E. Advancement Bylaw - Section 102(b)(7) Provision I.F. Disclosure Claims I.G. The Defendants [more...]
Stapled financing Stapled FinancingRisk and Reward Especially in light of the tightening credit conditions for leveraged buyouts, stapled financing remains an attractive technique to mitigate financing uncertainties in todays market. In a typical stapled financing transaction, a seller arranges the availability of credit for a range of potential buyers through the sellers financial advisors. In [more...]
Summary Shareholder litigation over Blackstone-led buyout Deal page Initial strike suit focused on quick flip of AmeriSuites by Blackstone for a substantial gain As part of settlement company sent a proxy supplement Proxy statement supplement (9.24.04) Litigation settled (9.24.04) Subsequent litigation attacked this settlement Plaintiffs [more...]
Denies Motion for Reargument Opinion 7.24.06 Opinion (Del Ch 2006) Opinion 6.27.06 Vice Chancellor Lamb Introduction + Background I. Third party confidentiality agreement II. Analysis III. Order IV. Related Topics Books and Records
SS&C Technologies, Inc. Shareholders Litigation Delaware Chancery (2006) Summary Litigation over 2005 buyout by Carlyle CEO initiated and drove the sale process Special committee approved deal after Carlyle offer was increased from $37 to $37.25 per share For more on the deal, see SS&C Technology Buyout Delaware Chancery (V.C. Lamb) [more...]
Overview Supreme Court affirms the Eighth Circuit, 5-3 Holds that secondary actors are not liable under Exchange Act §10(b) and Rule 10b-5 where plaintiffs cannot prove reliance Rejects use of scheme liability by private plaintiffs against secondary actors where there was no actual reliance on the deceptive conduct by the plaintiffs [more...]
Summary Digests selected Supreme Court cases Securities, corporate and other commercial cases Latest Decisions Leegin Creative Leather v PSK Argued 3.26.07 Overrules Dr Miles decision (1911); Vertical price restraints are to be judged by the rule of reason Dedicated Topic Page Tellabs v Makor Issues Decided [more...]
Summary Lawsuit over AT&T's 1999 acquisition of TCI TCI had dual class voting stock In the merger, 10-vote stock was paid a 10% premium over what 1-vote stock was paid Delaware Chancery denies defendants' summary judgment motion Opinion 12.21.05 (below) Disparate holdings of 10-vote stock conflicted TCI directors So that entire fairness [more...]
Summary Lawsuit over Toys R Us LBO Deal page: Toys R Us LBO Delaware Chancery denied shareholders' motion for a preliminary injunction to block the deal VC Strine upheld the Board's auction process Rejected Revlon claim that the Board should have used an entirely new auction when the proposed deal switched from a sale of TOY's largest [more...]
TSC Industries v Northway (US 1976) Opinion 426 US 438 (US 1976) Factual background I Legal background II Exchange Act §14(a) II.A Materiality II.B For purposes of Rule 14a-9 II.C Summary judgment [more...]
Summary News Corp was sued over rights plan Plaintiffs alleged that News Corp contracted, or else promised, that any extension of its poison pill would be put to a shareholder vote Promises were made in context of News Corp seeking shareholder approval for its reincorporation in Delaware from Australia News Corp later adopted a rights plan [more...]
United Rentals v RAM Holdings Delaware Chancery Summary Legal challenge over proposed buyout of United Rentals Chancellor Chandler denied United Rental's motion for specific performance of a $4.0 billion Cerberus-led buyout of the company The buyers intentionally breached the agreement -- without asserting that there had been a [more...]