July 29, 2013
Delaware Decision: Alleged Conflicts of Interest, Revlon Claims and Aiding & Abetting Claims Against Acquirors/Financial Advisors
John Grossbauer of Potter Anderson notes: Last week, Delaware Chancellor Strine delivered this opinion – in In re Morton’s Restaurant Group Shareholders Litigation – granting defendants’ motion to dismiss post-closing litigation challenging the sale of Morton’s to Landry’s. The Chancellor referenced various materials incorporated by the plaintiffs into their complaint, recognizing the discovery that had occurred in the pre-closing phase of the litigation as well as the public filings be Morton’s. He found the business judgment rule would apply, both in light of the independence of a majority the Board and the extensive market check, as well as his finding that, even assuming the former 27.7% stockholder was a controlling stockholder, the fact it did not drive the process to a quick conclusion and shared consideration equally with the other stockholders invoked the “safe harbor” he had referenced in the Synthes decision.