Wednesday, September 28, 2011
Anyone who has ever taught corporate law will take a slight interest in the fact that the Pritzker family has decided to exit its investment in TransUnion. You'll remember that Pritzker's acquistion of TransUnion in the mid-1980s was litigated. Smith v Van Gorkom it was highly controversial because it held that directors who agreed to sell TransUnion were monetarily liable for violations of their duty of care. It's a great set of facts, well worth reading. But the result caused quite a stir and was the proximate cause of Delaware's adoption of 102(b)(7), exculpating directors from liability for similar future violations. Although Van Gorkom is usually taught as a duty of care case, it's best understood in the context of the development of Delaware's takeover law jurisprudence. It was decided in 1985 along with Moran and Unocal. When you think about it that way, one might be more sympathetic about where the court was trying to go. In any event, a piece of corporate law history is for sale.