Delaware Court of Chancery Upholds Trados Transaction as Entirely Fair

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2013-09-03

Summary:

Editor's Note: The following post comes to us from David J. Berger, partner focusing on corporate governance at Wilson Sonsini Goodrich & Rosati, and is based on a WSGR Alert memorandum. This post is part of the Delaware law series, which is cosponsored by the Forum and Corporation Service Company; links to other posts in the series are available here.

On August 16, 2013, the Delaware Court of Chancery issued a much-anticipated post-trial decision in In Re Trados Incorporated Shareholder Litigation, holding that the sale of Trados to SDL was entirely fair to the Trados common stockholders and that the Trados directors had not breached their fiduciary duties in approving the transaction. [1] The case involved a common fact pattern: the sale of a venture-backed company where (1) the holders of preferred stock, with designees on the board, receive all of the proceeds but less than their full liquidation preference, (2) the common stockholders receive nothing, and (3) members of management receive payments under a management incentive plan.

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Link:

http://blogs.law.harvard.edu/corpgov/2013/09/03/delaware-court-of-chancery-upholds-trados-transaction-as-entirely-fair/

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mergers & acquisitions practitioner publications boards of directors incentives fiduciary duties court cases delaware cases delaware law management fairness review wilson sonsini goodrich & rosati venture capital firms dual-class stock david berger

Authors:

Noam Noked, co-editor, HLS Forum on Corporate Governance and Financial Regulation,

Date tagged:

09/03/2013, 15:50

Date published:

09/03/2013, 09:26