Court Of Chancery Permits Interlocutory Appeal On Poison Pill Contract Issues
Unisuper, Ltd. v. New Corporation, C.A. No. 1699-N (Del. Ch. Jan. 20, 2006).
Opinion and order granting interlocutory appeal on two contract issues, after court dismissed corporate allegations of fraud, negligent misrepresentation and fiduciary duty breach.
Defendants sought an interlocutory appeal from the court's earlier memorandum opinion dismissing the above claims, but retaining two: an alleged breach of contract claim and one founded on promissory estoppel.
The parties' duel over a contract's existence approving a shareholder vote on poison-pill extensions. Expressing skepticism on the plaintiff's posture advocating the contract's existence because it provided no contextual details or specificity on the poison pill's structure, the court permitted the appeal. This was because the defendants' conceded existence of that contract and the court found application of Supreme Court R.42 demonstrated that: the circumstance was an exceptional one and determined a substantial issue, establishing a legal right and the appeal could end the suit and benefit many others pending in the courts.
In arriving at that holding, the court examined the scope of 8 Del. C
. §141. It observed that directors could bind themselves to in futuro
agreements with shareholders for corporate governance improvements and shareholders had vested in them the inherent power to decide the fate of poison pills: to continue or abandon them without board protection from imagined coercive influences.