From our private database of 28,700+ case briefs...
Kahn v. United States Sugar Corp.
Delaware Chancery Court
11 Del. J. Corp. L. 908, 1985 WL 4449 (1985)
Charles Mott and his family owned or controlled 72 percent of the United States Sugar Corp. (U.S. Sugar) (defendant). The Motts orchestrated a self-tender offer to reduce their holdings without relinquishing their control. An Employee Stock Ownership Plan (ESOP) (defendant) was formed to borrow and later repay part of the tender costs. U.S. Sugar set a price range of $60 to $70 per share and engaged First Boston Corporation to provide a fairness opinion. U.S. Sugar decided on a per-share price of $68 for the tender offer based on the amount that the company’s directors believed could safely be borrowed and repaid, though the company delayed in communicating this information to First Boston. U.S. Sugar also retained Bear Stearns & Co. for valuation purposes. Bear Stearns gave estimates as high as $78, but this was not communicated to U.S. Sugar’s shareholders in the tender-offering statement. Also omitted from communication to shareholders was information about the book value of U.S. Sugar’s land, the company’s principal asset. Ultimately, more than 93 percent of the outstanding shares were tendered. A class of minority shareholders (plaintiffs), including Ruth Kahn, brought suit against U.S. Sugar, the ESOP, and members of U.S. Sugar’s board (defendants) in the Delaware Court of Chancery. The shareholders alleged that material facts had been omitted from the tender-offer solicitation, resulting in a breach of fiduciary duty. The shareholders also argued that the tender price should have been $122 per share, which would entitle them to damages representing the difference between that amount and $68 per share.
Rule of Law
Holding and Reasoning (Hartnett, J.)
What to do next…
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 546,000 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
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 546,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 28,700 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.