The general theory of the Delaware Corporation Law is that action taken pursuant to the authority of the various sections of that law constitutes acts of independent legal significance and their validity is not dependent on other sections of the act.
Martin Hariton, plaintiff, sued Arco Electronics, Inc., defendant, to enjoin consummation of a plan to sell Arco Electronics, Inc.'s assets under Del. Code Ann. tit. 8, § 271, dissolve pursuant to Del. Code Ann. tit. 8, § 275, and distribute the purchasing corporation's stock to shareholders. Hariton contended that the sale of assets and dissolution statutes could not be legally combined, and that the plan constituted a de facto merger without affording shareholders the rights provided in the merger statute. The trial court granted summary judgment for Arco Electronics, Inc. and dismissed Hariton's complaint.
Did the trial court err in its decision to grant summary judgment for Arco Electronics, Inc.?
The Court affirmed the decision of the trial court, holding the combination of the sale of assets and dissolution statutes was legal. According to the Court, although defendant's actions did accomplish a de facto merger, the sale of assets and merger statutes were independent and the validity of actions taken pursuant to one statute did not depend on the other.