In Re: Appraisal of Transkaryotic Therapies, Inc. (Del. Ch., May 10, 2006), download file. In this letter ruling, the Chancery Court addressed whether it was necessary to have a “two-tiered” confidentiality order. The court found that there were no extraordinary circumstances that would justify the added complexity, and undue burden on the petitioners, of a two-tiered confidentiality order.
The court rejected the arguments for separate designations based on the following reasoning. First, the misuse of sensitive trade secrets and other highly protected information would be adequately covered by the one-tiered confidentiality approach in the same way that confidentiality orders have protected sensitive information in countless other appraisal actions. Second, the securities laws themselves protected the company in the market from the possibility of petitioners and their affiliates trading improperly on insider information.
This is a helpful explanation from the court for the practical aspects of business litigation. Often there are disagreements on the form of order for confidentiality matters, but not as often does the court give guidance in a published opinion, as opposed to a teleconference or comments from the bench. This pragmatic “view from the trenches” can be contrasted with the more refined academic discussions of the nuances of the “due care” and its role in the BJR.