Sunday, May 2, 2010
Who doesn't remember the 1985 Delaware Supreme Court case, Smith v Van Gorkom, from their basic corporations course? That case, which found that directors of TransUnion were grossly negligent in their handling of the sale of the company to Jay Prtizker's Marmon Group. Although highly controversial because directors were held personally liable, it turned out that Van Gorkom was the first of a series of cases in which the courts began to develop a jurisprudence to grapple with the 1980s takeover boom.
Well, late last week, the Pritzker family called it quits and sold their controlling stake in TransUnion LLC to Madison Dearborn, a private equity shop. In the years since the acquisition, TransUnion underwent a thorough rebirth - from lazy railroad car shop to one of three powerhouse credit bureau. Now, with the Pritzker's moving on, there may be no one left there to remember the important role that TransUnion and its board played in developing the law - even if they were grossly negligent! (And there is lots of controversy still about that.)