Chancellor Leo E. Strine Jr. has long had a high regard for the ability of stockholders to decide for themselves what is in their own best interests. A corollary of that is judicial restraint when stockholders on full information of flaws and conflicts of interests in a sales process have the opportunity to approve or reject a merger transaction with a substantial 47.8 percent control premium, albeit one likely not as robust as a well-run sales process may have generated.
This is particularly true when the record does not reflect any alternative buyers. InIn re El Paso Corp. Shareholder Litigation , Strine declined to enjoin a merger transaction even though he found on a preliminary record that plaintiffs likely could prove a high probability of success on their claims for breach of fiduciary duty and irreparable harm. Although it may be argued that this is inconsistent with the maxim that "equity will not allow a wrong without remedy," a better view is that the Court of Chancery will not use the strong arm of equity paternalistically to deprive stockholders of a premium-generating transaction if, on full information, they choose to take it.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
