Sugarland Ind., Inc. v. Thomas
Supreme Court of Delaware
420 A.2d 142 (Del. 1980)
The board of directors of Sugarland Industries, Inc. (Sugarland) (defendant) was in the process of selling a tract of land (south tract) to White and Hill for $23.8 million. Certain Sugarland shareholders (plaintiffs) hired an attorney to represent their interests, because they thought the price was inadequate. On account of the plaintiffs’ and their attorney’s work, another company, R-S-C, offered the Sugarland board $27 million for the south tract. When the board continued to prefer the White and Hill offer, the plaintiffs brought a shareholder derivative suit in the Delaware Court of Chancery. The trial court ordered that the Sugarland board consider competitive bids for the south tract. Sugarland did so and ended up selling the south tract to Hines for $37.2 million. In addition, in a second sealed bidding process, Hines bid $1.25 million more than the next highest bidder for another parcel of Sugarland property (north tract). The trial court awarded the plaintiffs’ attorney a fee equal to 20 percent of the difference between the amount paid by Hines and the initial White and Hill offer. Sugarland appealed.
Rule of Law
Holding and Reasoning (Duffy, J.)
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