Private equity firm American Capital will have to defend against breach of fiduciary duty claims after Vice Chancellor Sam Glasscock III last month found reason to believe it was exercising control of Halt Medical at the time of a disputed merger, despite having just a 26 percent stake in the company.
The plaintiff stockholders filed their suit last January, alleging American Capital used Halt’s debts to force Halt’s board to enter the merger under duress while promoting its own interests. A majority of the directors, they argued, were beholden to American Capital and could not be considered independent or disinterested in the transaction, which unfairly diluted the stockholders’ interest in the company.
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