Court of Chancery Interprets No Shop Clause
Energy Partners Ltd. v. Stone Energy Corporation, C.A. No. 2402-N (Del. Ch. October 11, 2006).
The Court of Chancery may be called upon to decide the scope of a board of director's duties in appropriate cases. Here, the Court interpreted a common merger agreement provision that limited the board's options in considering third party bids while the merger was pending. The Court held the provision permitted contact with the new bidder.
This opinion is also interesting for its discussion of the ripeness doctrine that limits the Court's role in dealing with abstract questions.