In Re Trados, Inc. Shareholder Litigation, C.A. No. 1512-VCP (Consol.) (Del. Ch. Aug. 16, 2013). This 115-page significant post-trial opinion deserves extensive commentary but for present purposes, I will cursorily mention the somewhat unusual outcome in this case that applied the entire fairness standard in connection with an acquisition in which the preferred stockholders received all the compensation from the sale, but the common stockholders received nothing. Even though the entire fairness standard was applied because a majority of the directors were not independent, the court found that there were no damages suffered by the common stockholders because the value of the common stock before the transaction was zero, and therefore it was not unfair for the preferred shareholders under the facts of this case to receive all the consideration from the transaction.
Notably, the court also said that it would consider a subsequent application for shifting of attorneys’ fees based on the litigation conduct of the Defendants.
This case should be compared to a recent settlement of a class-action involving a merger in which common stockholders received nothing but that combined class-action and appraisal-action (which is the same combined procedural posture as in the Trados case), resulted in a $3 million dollar fund as a result of a settlement which would be distributed to the former common stockholder Plaintiffs who otherwise received nothing in the challenged transaction. See Smith v. Caci, C.A. No. 5060-VCG, transcript (Del. Ch. Aug. 1, 2013).