As an aside, due to my busy schedule recently, although I have prepared over the last few weeks quite a number of case summaries of Chancery Court and Supreme Court cases, I have not had time to post them. Thus, I will likely be posting a large number of case summaries in bunches for the next few days in order to catch up.
In Feldman v. Cutaia, et al., download file, Motions to Dismiss under Chancery Court Rule 23.1 and Rule 12(b)(6) were denied in light of a breach of the duty of loyalty and breach of candor allegations that were made in connection with an alleged improper dilution in connection with a reverse stock split, as well as disclosure violations for the repurchase of shares based on misleading information and because insiders reportedly received stock for no consideration. The court also addressed DGCL Section 160 and found that the repurchase of shares in the case at bar resulted in an impairment of the corporation’s capital in violation of Section 160 of the DGCL. The court also found that the complaint adequately alleged failure to disclose claims in connection with a tender offer.
In the separate Chancery Court case of In Re: Triarc Companies, Inc. Shareholders Litigation, download file, attorneys’ fees were awarded in a class action settlement where disclosure claims were made in an amended complaint in connection with a Dutch Auction. The disclosure issues were corrected after a complaint was filed and based on that, even though this was one of many similar suits filed elsewhere, the court granted fees.