ExecutiveLoyalty.org

Executive Compensation Litigation versus Boards

relating to Mergers & Acquisitions 

2015.04.23  Earn-out Provision to be Literally Interpreted.  In Lazard Technology Partners, LLC v. QinetiQ North America Operations LLC, Delaware's Supreme Court held that the plain meaning of a merger agreement's earn-out provision must be followed, and refused to allow the seller to rely on the implied covenant of good faith and fair dealing to impose an objective standard on buyers that would counter the heavily-negotiated language in the provision itself.

2012.Jan.2  Delphi Shareholder Targets Premium Sale Payable for Founder's Shares.  The Pontiac General Employees Retirement System has filed a complaint in Delaware's Chancery Court alleging breaches of fiduciary duty by the Founder and CEO of Delphi Financial Group, as well as by its board of directors, due to a merger agreement under which common shareholders will receive $9 per share less than the founder and CEO (who has super-voting shares.   

    >>> More at  Delphi 8-K for Merger.

2011.Sept.  CEO's Alleged Domination of Independent Directors States Breach of Loyalty Claim re Corp Sale -- New Jersey Carpenters Pension Fund v. infoGROUP, Inc. (discussed in Harvard Law Governance Blog).

2007.   Stock Option Merger-related Cashout:  Lillis v. AT&T (Del.Ch. 2007) - optionees recovered $21M because they had not consented to the unilateral cashouts of their underwater stock options in merger transaction.