Frank v. Elgamal, C.A. No. 6120-VCN (Del. Ch. Mar. 10, 2014).
Why this case is noteworthy: For many readers, this 94-page decision on a motion for summary judgment is useful, in part, for the following points:
- One of the issues addressed was what standard of review to apply to claims related to the challenged aspects of a merger. That determination hinged in part of whether a control group existed. However, factual issues at this procedural stage prevented a finding of whether a control group existed.
- Thus, in the absence of a determination of whether a control group existed, the court could not decide whether the entire fairness standard applied.
- Still, the court observed that even if there was a finding of a control group, and even if the entire fairness standard applied, issues of material fact about whether the special committee was fully informed and functioning made it inappropriate at this procedural stage to determine if the burden of proof should shift to the plaintiff.
- Additional factual issues that prevented a grant of summary judgment related to material facts about whether the alleged control group stood on both sides of the transaction and whether it was competing with minority stockholders for consideration.
For background details, refer to a prior Chancery decision in this case highlighted on these pages.