Nemec v. Shrader
Delaware Supreme Court
991 A.2d 1120 (2010)
Pursuant to its Officer Stock Rights Plan (the Plan), Booz Allen (defendant) afforded retired officers two years after retirement within which they could sell their Booz Allen stock back to the corporation. When the two-year period expired, Booz Allen had the right to redeem the stock at book value. Joseph Nemec and Gerd Wittkemper (plaintiffs) retired from Booz Allen on March 31, 2006. Each retained at least some of his stock through the two-year period. In 2007, Booz Allen negotiated a sale of its government business unit to The Carlyle Group (Carlyle). The sale was expected to close by March 31, 2008, which was also the deadline for Nemec and Wittkemper to sell back their shares. However, the Carlyle transaction was delayed and did not close until July 31, 2008. In April 2008, Booz Allen redeemed Nemec and Wittkemper’s stock at the pre-Carlyle transaction book value, which was significantly less than Nemec and Wittkemper would have received if they had been able to participate in the transaction. Certain Booz Allen directors (defendants) who approved the buyback received a share of the distribution resulting from the Carlyle transaction. Nemec and Wittkemper filed suit. They claimed breach of the covenant of good faith and fair dealing implied in the Plan and breach of the fiduciary duty of loyalty, because Booz Allen bought back their shares when it knew that the Carlyle transaction was yet to occur. The defendants filed a motion to dismiss for failure to state a claim, which the trial court granted. Nemec and Wittkemper appealed.
Rule of Law
Holding and Reasoning
Dissent (Jacobs, 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 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.
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 175,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 14,000 briefs, keyed to 188 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.