In a preliminary injunction opinion issued on May 21, 2013, the Delaware Court of Chancery (VC Glasscock) found that the board of directors of NetSpend Holdings Inc., comprised of four directors representing private equity-affiliated stockholders that owned over 45% of NetSpend’s shares, three independent directors and the CEO, likely failed to satisfy their so-called “Revlon” duties to attempt to secure the best value reasonably attainable when agreeing to sell the company to Total Systems Services, Inc. (“TSYS”) in an all-cash $1.4 billion transaction. Specifically, the Court concluded that while the single-bidder sale process was not unreasonable per se … Read more
Chancellor Strine’s December 17, 2012 bench ruling in In re Ancestry.com Inc. Shareholder Litigation attracted immediate attention from M&A practitioners and scholars regarding the Chancellor’s comments on so-called “Don’t Ask, Don’t Waive” standstill provisions. That attention, however, overshadowed the Chancellor’s equally important guidance regarding the materiality—and, therefore, need to disclose to shareholders—of qualitative facts surrounding fairness opinions prepared by a target’s financial advisor. This post attempts to highlight that guidance, now that some of the proverbially dust kicked up by the Chancellor’s commentary on “Don’t Ask, Don’t Waive” standstills has begun to settle.
Background to the Ancestry.com Dispute
Beginning … Read more
In three relatively low profile decisions issued by the Delaware Court of Chancery in February 2013, the court reached seemingly atypical results given the issued involved and the procedural postures of the respective cases. The first decision was on February 6 in In re Puda Coal, Inc. Stockholders Litigation, C.A. No. 6476-CS (TRANSCRIPT). There, Chancellor Strine denied from the bench a motion to dismiss a claim alleging that the defendant directors had breached their duty of loyalty by failing to monitor the company’s officers. This result is noteworthy in that such so-called Caremark claims have been characterized by the … Read more