Delaware Supreme Court
488 A.2d 858 (Del.Sup.Ct. 1985)
Jerome Van Gorkom, the CEO of Trans Union Corporation (Trans Union), engaged in his own negotiations with a third party for a buyout/merger with Trans Union. Prior to negotiations, Van Gorkom determined the value of Trans Union to be $55 per share and during negotiations agreed in principle on a merger. There is no evidence showing how Van Gorkom came up with this value other than Trans Union’s market price at the time of $38 per share. Subsequently, Van Gorkom called a meeting of Trans Union’s senior management, followed by a meeting of the board of directors (defendants). Senior management reacted very negatively to the idea of the buyout. However, the board of directors approved the buyout at the next meeting, based mostly on an oral presentation by Van Gorkom. The meeting lasted two hours and the board of directors did not have an opportunity to review the merger agreement before or during the meeting. The directors had no documents summarizing the merger, nor did they have justification for the sale price of $55 per share. Smith et al. (plaintiffs) brought a class action suit against the Trans Union board of directors, alleging that the directors’ decision to approve the merger was uninformed. The Delaware Court of Chancery ruled in favor of the defendants. The plaintiffs appealed.
Rule of Law
Holding and Reasoning (Horsey, J.)
Dissent (McNeilly, 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 203,000 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.