stating that the "settled rule” was that if fully informed stockholders approved a transaction approved by even interested directors, the business judgment rule standard would be invoked, but that in the case of a third-party cash merger before the court, the stockholders’ vote did not qualify because of disclosure inadequacies (citing Gerlach v. Gillam, 139 A.2d 591, 593 (Del.Ch. 1958))
How later courts described this case
- stating that the "settled rule” was that if fully informed stockholders approved a transaction approved by even interested directors, the business judgment rule standard would be invoked, but that in the case of a third-party cash merger before the court, the stockholders’ vote did not qualify because of disclosure inadequacies (citing Gerlach v. Gillam, 139 A.2d 591, 593 (Del.Ch. 1958))
- holding that a deci sion by the board of directors to approve a merger did not fall within the proper exercise of business judgment because the directors failed to consider the intrinsic worth of the corporation where the stock traded at a depressed market value
- holding that directors were capable of assessing the fairness of a transaction based on their own knowledge
- holding that "the directors of Trans Union breached their fiduciary duty to their stockholders (1) by their failure to inform themselves ... and (2) by their failure to disclose all material information” and that "an award of damages maybe entered”
Written by the judges who cited it.
Later courts went against this
Overruled on other grounds by Gantler v. Stephens, 2009 Del. LEXIS 33 (2009)
488 A.2d 858, 878 (Del. 1985), overruled on other grounds by Gantler v. Stephens, 965 A.2d 695
Superseded by statute, as recognized in Emerald Partners v. Berlin
488 A.2d 858 (Del. 1985), superseded by statute as stated in Emerald Partners v. Berlin, 787 A.2d 85 (Del. Super. 2001).
The opinion
CHRISTIE, Justice,
dissenting:
I respectfully dissent.
Considering the standard and scope of r review under Levitt v. Bouvier, Del.Supr., 287 A.2d 671, 673 (1972), I believe at the record taken as a whole supports a nclusion that the actions of the defend-ts are protected by the business judg-mt rule. Aronson v. Lewis, Del.Supr., 8 A.2d 805, 812 (1984); Pogostin v. Rice, Del.Supr., 480 A.2d 619, 627 (1984). I also i satisfied that the record supports a nclusion that the defendants acted with e complete candor required by Lynch v. Vickers Energy Corp., Del.Supr., 383 A.2d 8 (1978). Under the circumstances I would affirm the judgment of the Court of Chancery.
ON MOTIONS FOR REARGUMENT
Following this Court’s decision, Thomas P. O’Boyle, one of the director defendants, sought, and was granted, leave for change of counsel. Thereafter, the individual director defendants, other than O’Boyle, filed a motion for reargument and director O’Boyle, through newly-appearing counsel, then filed a separate motion for reargument. Plaintiffs have responded to the several motions and this matter has now been duly considered.
The Court, through its majority, finds no merit to either motion and concludes that both motions should be denied. We are not persuaded that any errors of law or fact have been made that merit reargument.
However, defendant O’Boyle’s motion requires comment. Although O’Boyle continues to adopt his fellow directors’ arguments, O’Boyle now asserts in the alternative that he has standing to take a position different from that of his fellow directors and that legal grounds exist for finding him not liable for the acts or omissions of his fellow directors. Specifically, O’Boyle makes a two-part argument: (1) that his undisputed absence due to illness from both the September 20 and the October 8 meetings of the directors of Trans Union entitles him to be relieved from personal liability for the failure of the other directors to exercise due care at those meetings, see Propp v. Sadacca, Del.Ch., 175 A.2d 33, 39 (1961), modified on other grounds, Bennett v. Propp, Del.Supr., 187 A.2d 405 (1962); and (2) that his attendance and participation in the January 26, 1981 Board meeting does not alter this result given this Court’s precise findings of error committed at that meeting.
We reject defendant O’Boyle’s new argument as to standing because not timely asserted. Our reasons are several. One, in connection with the supplemental briefing of this case in March, 1984, a special opportunity was afforded the individual de *899 fendants, including O’Boyle, to present any factual or legal reasons why each or any of them should be individually treated. Thereafter, at argument before the Court on June 11, 1984, the following colloquy took place between this Court and counsel for the individual defendants at the outset of counsel’s argument:
COUNSEL: I’ll make the argument on behalf of the nine individual defendants against whom the plaintiffs seek more than $100,000,000 in damages. That is the ultimate issue in this case, whether or not nine honest, experienced businessmen should be subject to damages in a case where—
JUSTICE MOORE: Is there a distinction between Chelberg and Van Gorkom vis-a-vis the other defendants?
COUNSEL: No, sir.
JUSTICE MOORE: None whatsoever?
COUNSEL: I think not.
Two, in this Court’s Opinion dated January 29, 1985, the Court relied on the individual defendants as having presented a unified defense. We stated:
The parties’ response, including reargument, has led the majority of the Court to conclude: (1) that since all of the defendant directors, outside as well as inside, take a unified position, we are required to treat all of the directors as one as to whether they are entitled to the protection of the business judgment rule
Three, previously O’Boyle took the position that the Board’s action taken January 26, 1981 — in which he fully participated— was determinative of virtually all issues. Now O’Boyle seeks to attribute no significance to his participation in the January 26 meeting. Nor does O’Boyle seek to explain lis having given before the directors’ meet-ng of October 8, 1980 his “consent to the ;ransaction of such business as may come >efore the meeting." * It is the view of he majority of the Court that O’Boyle’s change of position following this Court’s decision on the merits comes too late to be considered. He has clearly waived ‘ hat right.
The Motions for Reargument of all defendants are denied.
We do nol hereby determine that a director’s execution of a waiver of notice of meeting and consent to the transaction of business constitutes an endorsement (or approval) by the absent director of any action taken at such a meeting.