High Profile Cases

2nd Lawsuit filed against David Sokol and Warren Buffet in DE Court of Chancery

2011-05-16T18:57:00Z

A second case has been filed alleging that David Sokol purchased significant holdings in The Lubrizol Corporation (“Lubrizol”) prior to recommending to Warren Buffett that Buffett’s company acquire Lubrizol. Alejandro Gonzalez, et al. vs David L Sokol, Warren Buffett, et al., was filed in DE Court of Chancery on May 13th, 2011 at case no. 6485-VCL.

To find out how to obtain a copy of the Complaint, or to find other related cases, contact Angela Melton at angela.melton@lexisnexis.com.

Warren Buffett and BERKSHIRE HATHAWAY INC Defendants in a shareholder derivative suit in the Court of Chancery of the state of Delaware

2011-04-22T19:58:00Z

In the recently filed case of Kirby v. Sokol, et al., Del. Ch. No. 6392, it is alleged that “David L Sokol (“Sokol”), a former Berkshire employee and key lieutenant to Warren E. Buffett (“Buffett”), Berkshire CEO, used his position of influence to profit for himself at the expense of Berkshire.” It is further alleged that Sokol directly benefited from his position with Berkshire by convincing Buffett to purchase the Lubrizol Corporation, after Sokol purchased a significant number of shares in Lubrizol.

The case was filed via LexisNexis® File & Serve. As of May 11, 2011, there have been 10 transaction filed in this case. To purchase the complaint or other documents in this court, contact Angela Melton, angela.melton@lexisnexis.com.

Rupert Murdoch and News Corp named in Shareholder Derivative Action

2011-03-17T15:49:00Z

In a lawsuit filed today in the Court of Chancery in the State of Delaware, Plaintiff shareholders of Rupert Murdoch’s News Corp allege that Rupert Murdoch, News Corp’s founder, Chairman, Chief Executive Officer and controlling shareholder, schemed to use £415 million (approximately $675 million) of News Corp’s cash to buy Shine Group Ltd., the television and film production company run and majority-owned by his daughter Elisabeth Murdoch. The Plaintiffs also allege that Mr. Murdoch’s admitted purpose in entering into this transaction is to bring Elisabeth back to the family business—News Corp—and onto News Corp’s Board of Directors. The Plaintiffs indicate in their Action that “Once the prodigal daughter is back into the News Corp fold, she will vie with her brothers, Board members James Murdoch and Lachlan Murdoch, for the position of successor to Rupert Murdoch’s global media dynasty. In short, Murdoch is causing News Corp to pay $675 million for nepotism.”

For information on viewing this case on File & Serve, contact Angela Melton at angela.melton@lexisnexis.com

Air Products and Chemicals, Inc. v. Airgas, Inc.: an analysis of the use of a "poison pill" by a board of directors

2011-02-17T19:34:00Z

In a Delaware Court of Chancery Opinion issued on February 15, 2011, Chancellor Chandler has determined that a a board of directors, acting in good faith and with a reasonable factual basis for its decision, when faced with a structurally non-coercive, all-cash, fully financed tender offer directed to the stockholders of the corporation, can keep a poison pill in place so as to prevent the stockholders from making their own decision about whether they want to tender their shares—even after the incumbent board has lost one election contest, a full year has gone by since the offer was first made public, and the stockholders are fully informed as to the target board’s views on the inadequacy of the offer. However the board must establish that it reasonably believed that there existed a legally cognizable threat to justify its actions. This 150 plus page opinion, which squarely addresses the issue of when a poison pill can be used, was electronically filed via LexisNexis File & Serve. To find out how to purchase documents from File & Serve, contact Angela Melton at angela.melton@lexisnexis.com.

Crispy v. Grilled: KFC Franchisee Dispute Ruling in Delaware Court of Chancery

2011-02-01T15:16:00Z

Vice Chancellor Leo E. Strine, Jr. issued an order which settled an advertising dispute between KFC and its franchisees, holding that although the parties must cooperate in the development of advertising campaigns, franchisees could not run ads that KFC deemed inconsistent with the brand image. The Opinion was electronically filed on LexisNexis® File & Serve. For information on how to obtain the document, contact Angela Melton at angelamelton@lexisnexis.com.

DE Supreme Court grants expedited Appeal of Chancery court decision regarding whether the term “annual” in by-laws means “separated by approximately twelve months” or “occurring once a year.”

2010-10-19T17:14:00Z

In a decision in the takeover battle between Airgas Inc. and Air Products and Chemicals, Inc., filed on LexisNexis® File & Serve, Chancellor William B. Chandler III had to make a determination as to the validity of an amendment to Arigas' bylaws. In this case of first impression, he had to determine whether the term “annual” meeting means “separated by approximately twelve months” or “occurring once a year.” This Opinion was filed on Oct 8, 2010, File & Serve Transaction ID 33727021, in Case No. 5817-CC.

The overall effect of the Chancery Court’s decision, that annual meetings do not have to be spaced by eleven or twelve months, meant that there could be an annual meeting only four months after Airgas’s last meeting, shortening the terms of certain directors.

The Chancellor’s decision, that the bylaw provision was valid under Delaware law; was properly adopted; and, the bylaw did not conflict with Airgas’s charter, was immediately appealed by Airgas, and an expedited appeal was granted by the Delaware Supreme Court. The Notice of Appeal can be found at Airgas, Inc. v. Air Products and Chemicals, Inc., No. 649-2010, File & Serve Transaction ID 33736036.

For information on how to purchase the publicly filed documents in the Chancery and Supreme Court cases, contact Angela Melton at angelamelton@lexisnexis.com.

This Opinion has garnered much attention, and has been analyzed on the Harvard Law School Forum blog: http://blogs.law.harvard.edu/corpgov/tag/airgas-v-air-products-chemicals/.