Louisiana Sheriffs’ Pension & Relief Fund v. Crane,  Del. Ch., No. 4193-VCL (April 14, 2009), read letter decision here.

This case involves the hostile bid by Exelon Corp. to take over NRG Energy, Inc.  The plaintiffs in this case are stockholders of NRG who claim that NRG directors are breaching their fiduciary duties by not agreeing to the bid by Exelon. Among the background facts are a proposed bylaw amendment by Exelon to increase the number of NRG board members–without triggering a credit agreement that requires a majority of "continuing directors".

The initial complaint in this case was filed in November 2008. The first amended complaint was filed in March 2009.  On April 3, 2009 a second amended complaint was filed along with a motion for injunctive relief, seeking an order requiring NRG to rescind the appointment of a director and to enjoin any other action that would impede the vote for directors at the upcoming meeting.

The Court reasoned that the plaintiffs failed to satisfy the prerequisites for expedited proceedings. In particular, there was a failure to establish a sufficient possibility of a threatened irreparable injury, thus the court declined to address the second prong of the test, which requires the moving party to articulate a sufficiently colorable claim.

The Court rejected the arguments of the plaintiffs that the upcoming board elections would trigger the acceleration of debt and therefore there was "no imminent circumstance demanding immediate action". FN 7 (citation omitted).

Notable also was the important point that Exelon, the bidder, expressly opposed expedition in this case. The fact that the potential acquirer and the entity nominating the directors was opposed to expediting the case made it easier to distinguish this case from the famous case of Blasius Industries, Inc. v. Atlas Corp., 564 A.2d 651 (Del. 1988). Also distinguished from the facts of this case was the recent oral ruling in San Antonio Fire & Police Pension Fund v. Bradbury, C.A. No. 4446-VCL (Del. Ch. March 30, 2009)(TRANSCRIPT). In Bradbury, the dissident slate of directors, if elected, would have accelerated debt obligations, unlike in the instant case.

In sum, unlike other seemingly similar cases in which "defensive measures were erected by the target to fight off the potential acquirer and were strongly opposed by the potential acquirer", in this case the potential acquirer opposed expedition and believes that expedition would hamper the transaction that it sought. Thus, the motion to expedite was denied.