Quimbee logo
DMCA.com Protection Status

In re Digex Shareholders Litigation

789 A.2d 1176 (2000)

Case BriefRelatedOptions
From our private database of 33,800+ case briefs...

In re Digex Shareholders Litigation

Delaware Court of Chancery

789 A.2d 1176 (2000)

Facts

WorldCom, Inc. (defendant) entered into a merger agreement with Intermedia Communications, Inc. (Intermedia) (defendant). Intermedia was the controlling shareholder of Digex, Inc. (defendant). After the merger, WorldCom would possess over 85 percent of Digex’s voting power but under 85 percent of Digex’s outstanding voting shares. Four members of the Digex board of directors were affiliated with Intermedia. The four Intermedia-affiliated board members voted to waive the protections of § 203 of the Delaware General Corporation Law (DGCL). Three independent directors advised the board against waiving § 203 protections and voted against the waiver. Absent the waiver, § 203 would prevent WorldCom from engaging in a business combination with Digex for three years after the WorldCom–Intermedia merger unless WorldCom owned at least 85 percent of Digex’s voting stock. The lawyers who advised the parties disagreed as to whether the 85 percent exception referred to WorldCom’s Digex voting power or the number of shares WorldCom held as a percentage of Digex’s outstanding shares. Digex’s minority shareholders (plaintiffs) moved to preliminarily enjoin the merger or the § 203 waiver, claiming that the four interested Digex directors breached their fiduciary duty by voting to waive § 203’s protections. WorldCom, Intermedia, and Digex argued that even if the waiver was invalid, WorldCom would be exempt from § 203 because it would possess over 85 percent of Digex voting power after the merger and the waiver was fair to Digex shareholders.

Rule of Law

Issue

Holding and Reasoning (Chandler, 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 607,000 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 607,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 33,800 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 607,000 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
  • 33,800 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