The Delaware Supreme Court wades in on the standard of review in voting rights cases but leaves questions in its wake

Article Abstract:

The Delaware Supreme Court in Williams v. Geier upheld a corporate recapitalization plan challenged by a minority stockholder of Cincinnati's Milacron Inc. The court held that the standard of review of Unocal Corp. v. Mesa Petroleum Co. applied, that board members reasonably believed a corporate threat existed and the recapitalization plan reasonably responded to the threat. The dissenters felt that since those who would benefit from the recapitalization controlled more than half of the stock, neither the business judgment rule nor the stockholder vote was a real measure of the recapitalization plan's reasonableness or fairness to minority shareholders.

Voting rights (Stockholders), Stockholders' derivative actions, Shareholder lawsuits, Delaware

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In a closely followed case, the district court in Delaware upheld a target's right not to redeem its poison pill during a takeover

Article Abstract:

The US District Court for Delaware upheld a target corporation's choice to leave its rights plan in place during a hostile takeover tender, in Moore Corp v Wallace Computer Services. The court, after considering alternative standards of review, chose the Unocal enhanced-scrutiny test as appropriate. Under this, the company's actions must be defensive; the company's directors must reasonably perceive a danger to corporate policy and effectiveness; and the defensive measure must be reasonable and proportionate to the threat.

United States, Acquisitions and mergers, Tender offers (Securities), Tender offers

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When a limited partnership goes awry

Article Abstract:

Delaware is becoming a favored jurisdiction in which to form limited partnerships because case law in this area is developing rapidly. A large amount of case law tends to eliminate the need for expensive litigation in the future. The Delaware Chancery Court issued three more limited partnership rulings in late 1993 dealing with the issues of removing general partners, judicial authority to force a limited partnership's dissolution and rights to be indemnified for litigation expenses.

Limited partnership, Limited partnerships, Indemnity against liability, Liability indemnity

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