Cooke v. Oolie
Delaware Chancery Court
1997 WL 367034, 23 Del. J. Corp. L. 775 (1997)
- Written by Haley Gintis, JD
Facts
Sam Oolie, Morton Salkind, J. David Wargo, and John A. Janas (directors) (defendants) served as directors for The Nostalgia Network (TNN). After TNN suffered financial difficulties, Oolie and Salkind provided TNN with an operating and refinancing loan (February loan). The directors negotiated the loan’s terms. Wargo and Janas secured a lower interest rate than Oolie and Salkind had initially proposed and secured the ability for TNN to cancel the loan if another lender became available. By June 1989, the loan’s funds had run out and TNN’s investment bank informed TNN that there were no potential lenders. The directors negotiated another loan with Oolie and Salkind (June loan). Following the loans, shareholder Jack Kent Cooke and other shareholders (plaintiffs) filed a suit against the directors. Cooke argued that the loans were self-interested transactions that resulted in corporate waste and that the directors had breached their fiduciary duties by approving the loan transactions. The shareholders also accused the directors of exploiting inside information that TNN was going to be sold during the loan negotiations.
Rule of Law
Issue
Holding and Reasoning (Chandler, J.)
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