In re Medtronic, Inc., Shareholder Litigation

900 N.W.2d 401 (2017)

From our private database of 46,300+ case briefs, written and edited by humans—never with AI.

In re Medtronic, Inc., Shareholder Litigation

Minnesota Supreme Court
900 N.W.2d 401 (2017)

SC
Play video

Facts

Medtronic, Inc., a Minnesota corporation, agreed to merge with Covidien plc, an Irish company. The merged entity became an Irish corporation. Under the merger agreement, Medtronic shareholders retained a reduced, 70 percent interest in the merged entity. Further, the Internal Revenue Service taxed the merger, subjecting Medtronic shareholders to a capital gains tax. Medtronic did not compensate the shareholders for this tax liability. In contrast, the Medtronic directors were required to pay an excise tax on their stock compensation as part of the merger, but Medtronic reimbursed the directors for that tax liability. Kenneth Steiner (plaintiff) brought a class action suit against Medtronic and its board of directors (defendants). Steiner alleged three injuries: (1) on account of the shareholders’ unreimbursed capital gains tax liability; (2) on account of the corporation’s excise tax reimbursement to directors; and (3) on account of the shareholders’ diluted voting power in the new corporation. Medtronic filed a motion to dismiss, arguing that the suit was actually a shareholder derivate suit and that Steiner had failed to make a demand of the board of directors. The district court granted the motion. The court of appeals affirmed in part and reversed in part, agreeing with the district court that the excise tax reimbursement claim was derivative but finding that the other two claims were direct and could proceed. The Minnesota Supreme Court granted review.

Rule of Law

Issue

Holding and Reasoning (Gildea, C.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 803,000 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 803,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,300 briefs, keyed to 988 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 803,000 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
  • 46,300 briefs - keyed to 988 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