stating a special committee must “function in a manner which indicates that the controlling shareholder did not dictate the terms of the transaction and that the committee exercised real bargaining power at ‘an arms-length’”
How later courts described this case
- stating a special committee must “function in a manner which indicates that the controlling shareholder did not dictate the terms of the transaction and that the committee exercised real bargaining power at ‘an arms-length’”
- recognizing that “in complicated financial transactions such as this, professional advisors have the ability to influence directors who are anxious to make the right decision but who are often in terra cognito [sic]”
- finding that a director was beholden to majority stockholder where, three years previously, the company had retained his consulting services for $10,000 per month and awarded more than $325,000 in bonuses
- finding that “the process is so intertwined with price that under Weinberger’s unitary standard a finding that the price negotiated by the Special Committee might have been fair does not save the result”
Written by the judges who cited it.
The opinion
BERGER, Justice,
with whom RIDGELY, President Judge, joins dissenting.
The majority’s thorough and well reasoned decision reverses the trial court’s equally thorough and well reasoned decision. According to the majority, the Court of Chancery did not err in its legal analysis, but in its evaluation of the facts — particularly with respect to the Special Committee members’ independence, level of knowledge and involvement in the negotiations. The trial court recognized these issues and was satisfied, after six days of trial, that the Special Committee members were “informed, active and loyal to the interests of Tremont.” That finding is supported by the record and should be accorded deference. I respectfully dissent.