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Court Of Chancery Explains Step-Transaction Theory

Ellis v. OTLP GP, LLC, C.A. 10495-VCN (January 30, 2015) Not infrequently a plaintiff will argue that 2 transactions are so interrelated that his rights have been violated by structuring the deal to take 2 steps to accomplish it.  An example is this case  of a purchase of a controlling interest at a premium followed by a cash out merger at a discount. This is a hard road to travel  and this decision explains what is needed to make the court consider 2 steps as if they were one. Briefly, one must be dependent on the other in such a way as to make the deal not possible unless both occurred. Share

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