The Delaware Supreme Court, in City of Fort Myers General Employees’ Pension Fund, et al. v. John J. Haley, et al. [Towers Watson], No. 368, 2019, opinion (Del. June 30, 2020), reversed the Court of Chancery’s dismissal of breach of fiduciary duty claims, finding that stockholder plaintiffs adequately pled that target company’s CEO, who the board permitted to negotiate the terms of a merger, failed to disclose a proposed compensation plan that he would receive as CEO of the acquirer that could provide up to five times the compensation that he would receive under target’s compensation scheme.
NEW: Cadwalader discusses the decision in Director Who Led Merger Negotiations, Without Disclosing Details of a Lucrative Pay Package He Was Offered to Lead the Post-Merger Company, Must Face Fiduciary Duty Claims.
Morris James discusses the decision in Delaware Supreme Court Clarifies Materiality Standard for Director Disclosure.
Frank Reynolds discusses the decision in Del. high court says undisclosed post-merger role made Tower CEO self-interested, board ill informed.
Pillsbury Winthrop discusses the decision in Delaware Supreme Court reinstates case alleging fiduciary breach for failure to disclose CEO’s post-merger compensation discussions.
Anne Sherry discusses the decision in CEO sold out shareholders for higher post-merger comp, plaintiffs alleged.
Troutman Pepper discusses the decision in Fraud on the Board: Material Conflicts Must Be Disclosed to the Board to Warrant Business Judgment Review.
Shearman & Sterling discusses the decision in Delaware Supreme Court Reverses Dismissal of Merger-Related Breach of Fiduciary Duty Claims Regarding Allegedly Undisclosed Conflict of Interest.
Stinson discusses the decision in Director’s Undisclosed Conflict Prevents Application of Business Judgment Rule in Acquisition.
DealLawyers.com discusses the decision at Conflicts of Interest: Undisclosed Comp Discussions Rebut BJR.