Carlton Investments v. TLC Beatrice International Holdings, Inc.
Delaware Court of Chancery
1997 WL 305829 (Del. Ch. May 30, 1997)
The board of directors of TLC Beatrice International Holdings, Inc. (Beatrice) approved a compensation package worth $19.5 million for its former chief executive officer, Reginald Lewis (defendant). A major shareholder in Beatrice, Carlton Investments (Carlton) (plaintiff), brought a shareholder’s derivative suit chiefly to challenge that deal. Specifically, Carlton accused existing and past board members and officers of Beatrice (defendants) of breaching fiduciary duties, as well as committing fraud, conspiracy, and corporate waste. The parties engaged in a significant amount of discovery and made numerous motions on the court. Beatrice’s board then voted to add two new directors to the board, who would serve as the Special Litigation Committee (SLC). The SLC was charged with investigating the claims and making recommendations to Beatrice regarding the litigation. The SLC spent approximately five months investigating the underlying claims and negotiated a settlement with Lewis’s estate, under which the estate would repay approximately $15 million to Beatrice. The SLC moved the Delaware Court of Chancery to approve the settlement and dismiss the lawsuit under Chancery Court Rule 23.1. Carlton opposes the settlement.
Rule of Law
Holding and Reasoning (Allen, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 169,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 13,800 briefs, keyed to 187 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.