Gradient OC Master, Ltd. v. NBC Universal, Inc.

930 A.2d 104 (2007)

From our private database of 45,900+ case briefs, written and edited by humans—never with AI.

Gradient OC Master, Ltd. v. NBC Universal, Inc.

Delaware Court of Chancery
930 A.2d 104 (2007)

Facts

As part of a restructuring plan, NBC Universal, Inc. (NBCU) (defendant) acquired preferred stock in ION Media Networks, Inc. (ION) (defendant) as well as a call option to acquire a controlling share of the common stock. For government-compliance purposes, the call option was transferred to Citadel Investment Group LLC (CIG) (defendant). CIG exercised the call option and made a tender offer for the remaining shares of common stock. For the next step, ION proposed a vote on an exchange offer in which ION’s senior preferred stockholders would exchange their shares for subordinated notes and shares of a new series of preferred stock. However, the offer included two contingencies. First, if more than 50 percent of the senior preferred shares were tendered, the subordinated notes and new shares of preferred stock received in exchange would be elevated, ranking senior to any unexchanged preferred stock. If, however, 50 percent or less of the senior preferred shares were tendered, the notes and shares received by tendering holders would rank junior to any unexchanged preferred stock. Second, if less than 90 percent of senior preferred shares were tendered, NBCU and CIG preferred shares would be eligible for exchange for subordinated debt with priority over the unexchanged ION preferred stock. In addition, acceptance of the offer by ION preferred shareholders would eliminate restrictive covenants—including ION’s obligation to repurchase preferred shares upon a change of control—for the remaining ION preferred shares, thus affecting the rights of the nonparticipating senior preferred shareholders. Holders of two classes of ION senior preferred stock (the senior preferred stockholders) (plaintiffs) brought suit in the Delaware Court of Chancery, seeking a preliminary injunction.

Rule of Law

Issue

Holding and Reasoning (Parsons, J.)

What to do next…

  1. 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 735,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. 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.

    Learn about our approachRead more about Quimbee

Here's why 735,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 45,900 briefs, keyed to 984 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.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 735,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 45,900 briefs - keyed to 984 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership