For Your Data Thorpe V. Cerbco, Inc. Representative Brief
February 13, 2016
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Thorpe v. CERBCO, Inc. instance brief summary
676 A.2d 436 (1996)
CASE FACTS
Controlling shareholders inwards the corporation negotiated to sell their stock a buyer interested inwards buying stock from corporation. Controlling shareholders did non inform corporation's directors of buyer's involvement inwards corporation stock, only did inform corporation of their agreement. The chancery courtroom held that a shareholder was entitled to vote alone inwards his or her ain self-interest. Shareholder appealed.
DISCUSSION
The courtroom affirmed inwards part, reversed inwards business office in addition to remanded.
Recommended Supplements for Corporations in addition to Business Associations Law
676 A.2d 436 (1996)
CASE SYNOPSIS
Plaintiff shareholder challenged the conclusion of the Court of Chancery of the State of Delaware inwards in addition to for New Castle County, which held inwards their derivative suit, that although accused controlling shareholders breached their duty of loyalty they had the correct underDel. Code Ann. tit. 8, § 271 to veto whatever transaction which fellowship would accept entered into which constituted the sale of all or substantially all of the assets of the corporation.CASE FACTS
Controlling shareholders inwards the corporation negotiated to sell their stock a buyer interested inwards buying stock from corporation. Controlling shareholders did non inform corporation's directors of buyer's involvement inwards corporation stock, only did inform corporation of their agreement. The chancery courtroom held that a shareholder was entitled to vote alone inwards his or her ain self-interest. Shareholder appealed.
DISCUSSION
- The courtroom rejected the fairness standard, finding the corporate chance doctrine was a ameliorate framework for addressing controlling shareholders' duties every mo directors.
- Del. Code Ann. championship 8, § 271 rights were ultimately responsible for the nonconsummation of the transaction.
- Even if controlling shareholders had behaved faithfully to their duties to corporation, they nevertheless could accept rightfully vetoed a sale of substantially all of corporation's assets under § 271.
- Thus, the § 271 rights, non the breach, were the proximate cause of the nonconsummation of the transaction.
- Accordingly, transactional damages were inappropriate, only controlling shareholders were liable for damages incidental to their breach of duty.
- Specifically they were liable to corporation.
The courtroom affirmed inwards part, reversed inwards business office in addition to remanded.
Recommended Supplements for Corporations in addition to Business Associations Law