February 24, 2011
Delaware Chancery Analyzes Top-Up Option Best Practices
Here is news from Potter Anderson’s John Grossbauer: On Monday, Delaware Vice Chancellor Laster delivered this opinion in Olson v. eV3, in which he awarded $1.1 million in fees to a plaintiff who challenged a top-up option. The Vice Chancellor found the most viable claim to be the technical invalidity claim as to how the option consideration was determined and approved, rather than the “appraisal dilution” claim that has been much discussed. The opinion provides the Court’s view of best practices in the top-up arena, including requiring express board approval for the terms of the top-up.