M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Monday, April 9, 2012

Hamermesh on the Delphi Financial settlement

Last month, Vice Chancellor Glasscock had an interesting opinion in the Delphi Financial Group case.  You'll remember that in that case, Rosenkranz, a controlling shareholder, structured the transaction to generate a "control premium" for himself.  To do that he had to amend the certificate of incorporation to eliminate the equal treatment provision in the charter that would have prohibited him from taking a premium.  Glasscock didn't look favorably on that move.  Now the litigation has been settled in what, at first glance, looks like a total victory for the plaintiffs.  Larry Hamermesh asks the right question about the settlement and whether the shareholders really won:

The question the press release doesn’t quite answer, however, is what the source of the $49 million settlement payment is.  If it’s Rosenkranz only, the “truing up” will have been accomplished.  To the extent, however, that the acquirer or some D&O insurance carrier is providing some portion of the $49 million, Rosenkranz would be retaining some of the premium that the Court criticized.



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