Cadwalader, Wickersham & Taft LLP
MONTH-IN-BRIEF (Jun 2022)
Business Litigation
Citing Exceptional Facts, Delaware Court Finds Board Had Compelling Justification to Thwart Stockholder Action
By Leah E. León and Shannon E. German
In a case presenting unusual facts, the Delaware Court of Chancery recently upheld, on remand, a board’s decision to pursue a stock sale to escape a deadlock.[1] In Coster v. UIP Companies, Inc., Chancellor Kathaleen St. J. McCormick had previously found in a post-trial decision that the challenged stock sale was entirely fair.[2] On remand following an appeal, the Chancellor determined that the stock sale did not fall within Schnell’s[3] limited application and that it satisfied review under Blasius.[4]