M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Thursday, September 9, 2010

No TRO in Dollar Deal

No surprise, really.  According to Reuters, Vice Chancellor Strine just handed down an opinion (84 pages - if someone wants to send it along, I'd gladly read it for you...) in which he denied the Dollar shareholder plaintiff's motion for a temporary restraining order to prevent Dollar's deal with Hertz from moving forward.

I'm pretty bad at guessing what's going on in the mind of most judges, but this one was pretty obvious.


Update: Francis Pileggi at the Delaware Litigation Blog has helpfully posted the opinion here

Update:  Vice Chancellor Strine frames the Revlon question nicely.  Here from page 44 of the opinion:

Put simply, I do not quibble with the notion that the plaintiffs’ perspective is one that loyal fiduciaries reasonably seeking to obtain a value-maximizing deal could have adopted. But that, of course, is not the question.  The question is whether the alternative approach that the Dollar Thrifty Board adopted was itself a reasonable choice that a loyal and careful board could adopt in the circumstances.  I frame that question with purpose. The heightened scrutiny that applies in the Revlon (and Unocal) contexts are, in large measure, rooted in a concern that the board might harbor personal motivations in the sale context that differ from what is best for the corporation and its stockholders. Most traditionally, there is the danger that top corporate managers will resist a sale that might cost them their managerial posts, or prefer a sale to one industry rival rather than another for reasons having more to do with personal ego than with what is best for stockholders.  Avoiding a crude bifurcation of the world into two starkly divergent categories – business judgment rule review reflecting a policy of maximal deference to disinterested board decisionmaking and entire fairness review reflecting a policy of extreme skepticism toward self-dealing decisions – the Delaware Supreme Court’s Unocal and Revlon decisions adopted a middle ground.



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