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Arnold v. Society for Savings Bancorp, Inc.

Delaware Supreme Court
650 A.2d 1270 (1994)


Facts

A subsidiary of Bank of Boston Corporation (BoB) (defendant) called BBC Connecticut Holding Corporation (BBC) (defendant) merged with Society for Savings (Society), a subsidiary of Society for Savings Bancorp, Incorporated (Bancorp) (defendant). Bancorp shareholder Robert H. Arnold (plaintiff) sued BoB, Bancorp, and twelve Bancorp directors in the Court of Chancery for omissions and misrepresentations in the proxy statement issued for the merger. Bancorp included a limitation of directors’ liability under Delaware General Corporation Law § 102(b)(7) in Article XIII of its certificate of incorporation. The court concluded that any such errors in the proxy statement were immaterial and did not reach Arnold’s other claims. Arnold appealed to the Delaware Supreme Court claiming (1) the omissions and misrepresentations were material, (2) the duties set out in Revlon Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986), were applicable, and (3) the individual directors could be held liable for disclosure violations.

Rule of Law

Issue

Holding and Reasoning (Veasey, C.J.)

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