Delaware Business Litigation Report

Court Of Chancery Permits Creeping Takeover

In re Sirius XM Shareholder Litigation, C.A. 7800-CS (September 27, 2013)

This is an interesting decision because it discusses the duties, or lack thereof, a large stockholder who is buying more stock on the open market to take control.  Here the stockholder had a contract that it entered into when it loaned a lot of money to the company that limited the company's ability to adopt a poison pill or otherwise prevent such stock purchases.  Yet even absent that contract, the court indicated that there is no fiduciary duty to offer a "fair" price when buying stock on the open market and no duty of a board to act to prevent those purchases.

Share