BankAtlantic Bancorp Inc. Litigation, Consol. C. A. No.
7068-VCL (Del. Ch. Feb. 27, 2012). This 42-page opinion of the Delaware Court
of Chancery, along with a 14-page appendix to the opinion, permanently enjoined
Bancorp from consummating the sale of its equity to BB&T Corporation, after
a 3-day trial. This decision has received widespread coverage in the press,
such as the South
Florida Business Journal.
The Court's opinion provides detailed factual background
and a thorough legal analysis to support its reasoning that the prerequisites for
injunctive relief were met. Only a cursory overview will be provided in this
First, the Court explained in great detail why the
plaintiffs who objected to the sale established a likelihood of success on the
merits because the sale would breach the successor obligor provision and
constitute an event of default.
Second, irreparable harm was demonstrated because the
sale-triggered event of default would give the trustees the right to accelerate
payment of debt securities in the amount of $290 million that the seller could
not pay. Contrary to the requirements in the relevant debt instruments, the
buyer, BB&T, was not assuming those liabilities. In addition to
the harm from non-payment, terms of the deal providing for unjustified personal
payments to key insiders, which reduced the total purchase price, "will violate
Third, the balance of the hardships favored the grant of
injunctive relief. The Court was not persuaded by Bancorp's apocalyptic
hyperbole that an injunction would result in Bancorp's failure as an entity and
that the status quo (without a sale) is not tenable. The Court cited to
evidence at trial that supported the Court's holding.
Read more Delaware business
litigation case summaries and commentary on Delaware
Corporate and Commercial Litigation Blog, a blog hosted by Francis G.X.
Pileggi, of Eckert Seamans.
For more information about LexisNexis
products and solutions connect with us through our corporate site.