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Court of Chancery Upholds Right To Secondary Offering

In Re Molycorp Inc. Shareholder Derivative Litigation, C.A. 7282-VCN  (May 27, 2015)

When investors bargain for the right to have their stock sold in a secondary offering after the company goes public, fiduciary duties normally do not operate to restrict that right.

Hence, it is not possible to object to the offering on the basis that the company should have been able to sell its stock first to get a  temporary rise in the market price. A deal is a deal and even controlling stockholders do not need to forgo their contract rights.

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