In the recent cases of In Re Lear Corporation Shareholders Litigation, 2007 WL 1732588 (Del. Ch., June 15, 2007), read opinion here, and In Re Topps Company Shareholders Litigation, 2007 WL 1732586 (Del. Ch., June 14, 2007), read opinion here, the Chancery Court granted expedited injunctive relief to put a hold on going private transactions at two separate public companies due to the failure to fully disclose material information to shareholders who were asked to approve the separare transactions. In Lear, Carl Icahn was providing the private equity and in the Topps case, it was a group led by Michael Eisner. Both cases also applied the familiar standard established by the Delaware Supreme Court’s decision in Revlon, which required the board to maximize the value received by shareholders when the company was "for sale". (See Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d. 173 (Del. 1986)). A prior procedural decision in the Topps case was summarized briefly on this blog here.
Although it is not uncommon in today’s market for private equity firms to seek the acquisition of public companies, it appears coincidental that two such transactions were enjoined for somewhat similar reasons by the same vice chancellor with the opinions following each other by one day.
Both cases include very detailed and thorough and lengthy discussions of the facts and the law. I commend the reading of each full opinion at the above links, as time will not permit me to provide a comprehensive treatment at this time.