Fried Frank Discusses High Bar for Deeming Minority Shareholder a Controller

In In re Essendant Inc. Stockholder Litigation (Dec. 30, 2019), the plaintiff-stockholders of Essendant, Inc. (the “Company”) brought claims against the Company’s directors for their decision to terminate an agreement for a stock-for-stock merger with Genuine Parts Company (“GPC”) in order to enter into an all-cash deal offered by Staples, Inc. and its private equity firm parent, Sycamore Partners. The Delaware Court of Chancery, at the pleading stage of the litigation, rejected the plaintiffs’ contention that Sycamore, although a minority stockholder, was a controlling stockholder of the Company. In so ruling, Vice Chancellor Slights dismissed the plaintiffs’ claims that (i) … Read more