In Re Dollar Thrifty Shareholder
Litigation, C.A. No. 5458 (Del. Ch., Sept.
8, 2010), read 84-page opinion here. The Court of Chancery issued this opinion last night,
denying the request for a preliminary injunction to block the merger by which
Hertz would buy the shares of its smaller car rental industry rival Dollar
Thrifty Automotive Group.
We will have more to say about this decision, but in the
meantime, until we digest the novella, we provide an excerpt from
the Court's own summary of its decision thusly:
On the record before me, I must deny the plaintiffs'
motion. Despite the plaintiffs' skillful advocacy, the record after factual
discovery does not support their claim that the Dollar Thrifty Board likely
breached its fiduciary duty to take reasonable steps to maximize the value
Dollar Thrifty stockholders would receive. Rather, the record reveals that the
Dollar Thrifty Board, and its CEO Scott Thompson, has managed Dollar Thrifty
successfully through a financial crisis that saw the company on the brink of
insolvency and improved its performance to the point where the company was
profitable and receiving plaudits from the stock market. The Board did so by
economizing on costs and engaging in profitable arbitrage in handling the
company's rental car fleet. Throughout the last several years, while managing
the company, the Board has been open to selling the company if a deal favorable
to the stockholders could be achieved. To that end, the Board engaged in
lengthy discussions with both Hertz and Avis in the last several years. Each of
Hertz and Avis ultimately walked away, in circumstances when they could have
bought the company at a bargain price.
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