Quimbee logo with url
From our private database of 14,900+ case briefs...

In re Synthes, Inc. Shareholder Litigation

Delaware Court of Chancery
50 A.3d 1022 (2012)


Facts

Hansjoerg Wyss was the controlling stockholder in Synthes, Inc. (Synthes). Wyss was the company’s CEO for 30 years before he retired. Wyss sought to divest his Synthes shares, but given his high number of shares, doing so on the public market would harm the company’s stock price. Wyss thus needed a transaction to liquidate his stock. Wyss was the only stockholder who owned enough stock that selling would affect the company’s stock price. Synthes received a merger offer contingent on Wyss, as controlling stockholder, remaining a Synthes investor. The offer would have cashed out all Synthes minority stockholders. Wyss and the other Synthes board members declined this offer and ultimately accepted an offer from Johnson & Johnson (J&J). Wyss and the board negotiated extensively with J&J, ultimately receiving a higher price than initially offered. Under the J&J offer, all Synthes stockholders received 65 percent J&J stock and 35 percent cash. Wyss declined to take the premium to which he was entitled based on his position as controlling stockholder. Rather, he received the same pro rata payout as the minority stockholders. Minority Synthes stockholders (plaintiffs), sued Wyss and the other members of Synthes’s board of directors (defendants), claiming a breach of fiduciary duty. The plaintiffs argued that Wyss’s desire to liquidate his stock rendered the merger with J&J a conflicted transaction subject to the entire fairness standard because Wyss would only consider bids that would cash him out. The defendants filed a motion to dismiss.

Rule of Law

Issue

Holding and Reasoning (Strine, 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 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.

  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. Read more about Quimbee.

Here's why 284,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 14,900 briefs, keyed to 201 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.