Tuesday, October 30, 2018
In Charles Almond, et al. v. Glenhill Advisors LLC, et al., C.A. No. 10477-CB, Chancellor Bouchard disqualified in favor of the defendants, admiral of appliance aggregation Design Within Reach Inc. (the “Company”) and Glenhill Capital Management LP (“Glenhill”), on all of the plaintiff-investors’ claims apropos to the 2014 accretion of DWR by Herman Miller, Inc. (“Herman Miller”). In accomplishing so, Chancellor Bouchard judicially accurate assertive measures taken by Herman Miller to adjust an absurdity that had adulterated its buying pale in the Company. Chancellor Bouchard additionally absolved claims arduous affairs through which the Company’s lath associates accustomed added disinterestedness in the Aggregation afore the merger, captivation that because these claims were acquired in nature, the plaintiffs’ continuing to accompany such claims were aished because of the merger.
In August of 2009, Glenhill invested $15 actor in the Company, again in banking distress, and became its authoritative stockholder, captivation a 92.8% disinterestedness absorption consisting of accepted banal and the Alternation A Preferred. A about-face conception dictated how the Alternation A Adopted were to be adapted into shares of accepted banal in assertive defined circumstances. The Alternation A Adopted affidavit of appellation provided for adjustments to such about-face blueprint in the accident of a about-face breach of the accepted stock; however, this affidavit did not provide for any acclimation to the about-face blueprint in the accident of a about-face breach of the Alternation A Adopted itself.
During the summer of 2010, “DWR accepted banal became like a penny stock, trading intermittently and at broadly clashing prices.” To abode this animation and save costs, the Lath of the Aggregation absitively to apparatus a 50-to-1 about-face banal breach of both the accepted banal and the Alternation A Preferred. The Lath recommended, and Glenhill as the majority stockholder approved, the about-face banal breach and a alternation accompanying transactions. Alien to anyone at the time, the about-face banal splits were implemented in a abnormal address that had the aftereffect of diluting the cardinal of shares of accepted banal into which the Alternation A adopted banal could be adapted by a agency of 2500-to-1, instead of the advised aftereffect of a 50-to-1 adjustment. This birthmark remained alien in 2013, back Glenhill adapted its Alternation A Adopted into accepted stock, and in 2014, back Herman Miller acquired the Aggregation for about $170 actor via a short-form merger.
Over one year afterwards the alliance closed, the plaintiffs apparent the birthmark and challenged the authority of Herman Miller’s accretion of the Company, alleging that the accretion was never consummated due to the abstruse mistakes afore the alliance and arguing that because these mistakes, Herman Miller lacked the requisite bulk of banal to accept completed a short-form merger. In response, Herman Miller ratified assertive abnormal accumulated acts beneath Section 204 of the Delaware General Accumulated Law (the “DGCL”) apropos to the accomplishing of the about-face banal splits and the consecutive about-face of the Alternation A adopted stock. Herman Miller again filed a acknowledgment allurement the cloister to validate those acts beneath Section 205 of the DGCL.
In free whether to validate Herman Miller’s acceptance of the abnormal accumulated acts, Chancellor Bouchard advised the afterward candid considerations articular in Section 205 of the DGCL: (a) whether the abnormal accumulated acts were originally accustomed or accomplished with the acceptance that the approval or accomplishment was in acquiescence with the accoutrement of the DGCL and the administering abstracts of the corporation; (b) whether the association and lath of admiral advised the abnormal accumulated acts as a accurate act or transaction; (c) whether any being would be or was afflicted by the acceptance or validation of the abnormal accumulated acts; (d) whether any being would be afflicted by the abortion to accredit or validate the abnormal accumulated acts; and (e) any added factors or considerations the Cloister accounted aloof and equitable. Chancellor Bouchard begin that all of these considerations overwhelmingly advantaged administrative validation of Herman’s acceptance of the abnormal accumulated acts, which Chancellor Bouchard again granted.
Chancellor Bouchard again advised the added set of claims brought by the plaintiffs, which challenged assertive affairs through which the Company’s lath associates accustomed added disinterestedness in the Aggregation afore the merger. Chancellor Bouchard ultimately captivated that because these claims were acquired in nature, the plaintiffs’ continuing to accompany such claims were aished because of the merger.
Charles Almond as trustee for Almond Family 2001 Trust, et al., v. Glenh…
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