Albert J. Carroll of Morris James. Controlling Stockholder Avoids Liability Despite Overreach Into Special Committee Brokered-Settlement
Triggering Delaware's entire fairness review in stockholder litigation was once considered outcome determinate, but that view has waned. Numerous…
November 08, 2023 at 09:00 AM
6 minute read
Contributors
Triggering Delaware's entire fairness review in stockholder litigation was once considered outcome determinate, but that view has waned. Numerous decisions have shown that defendants can overcome the unified fair process and fair price components of entire fairness review and avoid sizeable judgments. Despite a finding of liability against a controlling stockholder arising out his overreach into a committee's process, the defense in In re Straight Path Communications Consolidated Stockholder Litigation, 2023 WL 6399095 (Del. Ch. Oct. 3, 2023) followed a well-worn path to success: proving the transaction's fair price.
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Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
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