May 30, 2007

The “Going Private” Wave and the Delaware Courts

In a early May decisionIn re Topps Company Shareholders Litigation – Vice Chancellor Leo Strine of the Delaware Chancery Court held, in a case involving the $385 million takeover of the Topps Company, that Delaware’s interests in maintaining its own laws were sufficiently important for the court to retain jurisdiction over the case even though a related case had been first-filed elsewhere. The case involved a proposed buyout of The Topps Company, involved a refusal by the Court to stay a Delaware action challenging the buyout in favor of a first-filed action brought in New York.

The case continues the trend started by the Court in the recent Ryan v. Gifford opinion involving alleged options backdating, where the Court also refused to stay a second filed Delaware action in favor of a first filed action in another state where the Court finds the issues to be important and novel under Delaware law. Kevin LaCroix provides more analysis in his D&O Diary Blog.