In RE Appraisal Of AOL Inc.

This is an important case for its comments on the Dell decision of the Delaware Supreme Court. The Court declined to use the deal price as evidence of the fair value despite the favorable comments on the use of deal price in Dell. Hence, this may mean that some commentators are wrong in their views that deal price is conclusive in valuation cases in the Delaware courts. Note, however, that again the fair value determined by the Court is less than the deal price, a loss for petitioners.

The decision is also important for its review of when the “operative reality” of a company includes the value of a new deal not yet concluded but sufficiently certain that its value needs to be part of the fair value of the company.

via Morris James

完全な基準が適用される事案で利益相反のない取締役に関して訴え却下の申し立てが認められなかった事例—In re Cornerstone Therapeutics Inc. Stockholder Litigation 2014 WL 4418169 (Del. Ch. Sept. 9, 2014)

In re Cornerstone Therapeutics Inc. Stockholder Litigation, 2014 WL 4418169 (Del. Ch. Sept. 9, 2014)は,支配株主が行った少数株主のフリーズアウトの取引に関して完全な基準が適用される事案で,定款にデラウェア州一般会社法102条(b)項(7)号の定めがあるにも拘わらず,利益相反のない取締役に関して訴え却下の申し立てが認められなかった事例です。

Sullivan & Cromwellのニュースレターでの要約は,次の通りです。

In an opinion issued on September 9, 2014, the Delaware Court of Chancery (VC Glasscock) held that in a controlling stockholder freeze-out merger subject to entire fairness review at the outset, disinterested directors entitled under a company’s charter to exculpation for duty of care violations cannot prevail in a motion to dismiss even though the claims against them for breach of fiduciary duty are not pled with particularity; instead, the issue of whether they will be entitled to exculpation must await a developed record, post-trial. The decision once again highlights the litigation cost that will be imposed on companies engaged in controlling stockholder freeze-out mergers for failing to employ both of the safeguards that Delaware has endorsed to ensure business judgment, instead of entire fairness, review— (1) an up-front non-waivable commitment by the controller to condition the transaction on an informed vote of a majority of the minority stockholders and (2) approval of the transaction by a well-functioning and broadly empowered special committee of disinterested directors. At the motion to dismiss stage, disinterested directors effectively will be treated in the same manner as controllers and their affiliated directors.

via Sullivan & Cromwell, Francis Pileggi