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Delaware Chancery Court Upholds Majority Stockholder Lock-up
In Orman v. Cullman, 2004 WL 2348395 (Del.Ch.), the Delaware Chancery Court's first decision interpreting the Delaware Supreme Court's controversial 2003 Omnicare decision (Omnicare, Inc. v. NCS Healthcare, Inc., 818 A.2d 914 (Del. 2003)), the court upheld an 18-month lock-up agreement required by a buyer from a controlling stockholder. Noting that the public stockholders had retained full authority to veto the transaction, the board had negotiated an effective fiduciary out, and any interested third party was free to purchase the publicly owned shares of the target, the Chancery Court dismissed plaintiff's breach of fiduciary duty claim on summary judgment and ruled that the lock-up did not “impermissibly coerce” the public shareholders to approve the merger.
The Chancery Court's decision in Orman v. Cullman reaffirms that even under the Unocal standard of enhanced judicial scrutiny regarding merger defenses, voting agreements are not per se malevolent — and rejects the notion that being in a voting minority “automatically means that a shareholder is coerced.” This article reviews some of the events leading up to the Orman v. Cullman decision, examines how the decision differs from the Omnicare decision, and looks at some of the implications of the decision for future transactions.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.