728 A.2d 25
PROCEDURAL POSTURE: Plaintiff hostile bidder sought a declaratory judgment that defendant target company's newly adopted takeover defenses were invalid and an injunction that required defendant's board to dismantle those defenses. Defendants filed a motion for summary judgment, which the court denied, and both parties submitted briefs.
OVERVIEW: Plaintiff hostile bidder sought a declaratory judgment against defendant target company and injunctive relief, challenging the validity of two defensive measures defendant adopted in response to plaintiff's hostile takeover bid. The effect of the by-law amendment would have been to delay a shareholder-called special meeting for at least three months and the effect of the deferred redemption plan (DRP) would have been to delay the ability of a newly-elected plaintiff-nominated board to redeem the poison pill for six months and thus the combined effect of the two defenses would be to delay acquisition for at least nine months.
The court ordered that final judgment be entered in favor of plaintiffs and against defendants finding that the DRP was invalid on fiduciary duty grounds, but that judgment be entered in favor of defendants against plaintiffs with respect to the by-law amendment because it was valid.
OUTCOME: The court entered judgment in favor of plaintiff hostile bidder and against defendant target company and declared that the deferred redemption plan defense employed by defendant was invalid on fiduciary duty grounds, but that the by-law amendment governing timing of special stockholders meetings was valid.
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