About This Blog
Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
Morris James Blogs
Court of Chancery Enjoins Transaction Pending Clearer Disclosure of Banker’s Conflicts
A board must disclose all information material to the stockholder vote for a transaction. Moreover, disclosures may be inadequate when they are buried in various places in a lengthy proxy statement. One piece of material information is conflicts involving the board’s advisors. The Court of Chancery is prepared to preliminary enjoin a transaction where the proxy omits or fails to sufficiently disclose material details concerning, for instance, a banker’s conflict. For example, the inadequately disclosed conflict warranting an injunction in this case involved the fees the buy-side banker expected to receive for its participation in debt financing for the deal.