Court of Chancery Grants Expedited Injunction Proceedings In Interested Merger's Disclosure Claim
In re Serena Software, Inc. S'holders Litig., C.A. No. 1777-N, 2006 WL 375599 (Del. Ch. Feb. 09, 2006).
This is a motion for expedited proceedings for a preliminary injunction pertaining to certain disclosure claims not made public in SEC-filed proxy statements soliciting shareholder vote for an agreement for sale of the corporation at $24 per share. Class actions were earlier filed in the Delaware Court of Chancery and California's Superior Court challenging the sale transaction as a director-interested one.
The defendants argued that because the California action was at a stage more advanced than the present one this action should not be litigated in Delaware.
The court rejected that argument because the present hearing only addressed claims, such as the disclosure one, not addressed by the parties Memorandum of Understanding. The court added that because the actions were concurrently filed, there was no evidence that the plaintiffs joined this action later. Addressing the social costs and market uncertainty implicated by a delayed merger vote because the disclosure claims were not resolved by demonstrating either the presence or absence of significant disclosures, the court held for plaintiffs.
The court thus granted a preliminary injunction hearing within a month of submission.