# Smith v. Van Gorkom

> Supreme Court of Delaware · March 14, 1985 · 488 A.2d 858

URL: https://www.frixlaw.com/law-library/cases/9637560

## Case

- **Full name:** Alden SMITH and John W. Gosselin, Plaintiffs Below, Appellants, v. Jerome W. VAN GORKOM, Bruce S. Chelberg, William B. Johnson, Joseph B. Lanterman, Graham J. Morgan, Thomas P. O’Boyle, W. Allen Wallis, Sidney H. Bonser, William D. Browder, Trans Union Corporation, a Delaware Corporation, Marmon Group, Inc., a Delaware Corporation, GL Corporation, a Delaware Corporation, and New T. Co., a Delaware Corporation, Defendants Below, Appellees
- **Court:** Supreme Court of Delaware
- **Decided:** March 14, 1985
- **Citations:** 488 A.2d 858
- **Precedential status:** Published
- **Opinion:** Dissent by Christie
- **Judges:** Herrmann, McNeilly, Horsey, Moore, Christie
- **Cited by:** 307 later opinions in the Frix Law Library

## Citator (automated)

- **Red flag:** Overruled on other grounds by Gantler v. Stephens, 2009 Del. LEXIS 33 (2009).
- Negative treatments: 2
- Distinguished by: 0
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9637560

## How later opinions describe it (automated extraction)

- 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’ vot…
- 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”
- finding violation of disclosure obligations where proxy statement partially disclosed that target director first suggested final, agreed-upon merger share price but failed to describe accurately the motive behind focusing on that figure

## Opinion text

McNEILLY and CHRISTIE,
Justices, dissenting:
We do not disagree with the ruling as to the defendant O’Boyle, but we would have granted reargument on the other issues raised.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9637560. Public record. Not legal advice.