Tooley v. Donaldson, Lufkin, & Jenrette, Inc.
Delaware Supreme Court
845 A.2d 1031 (2004)
- Written by Katherine Li, JD
Facts
Patrick Tooley and Kevin Lewis (plaintiffs) were minority shareholders in Donaldson, Lufkin, & Jenrette, Inc. (DLJ) (defendant). AXA Financial, Inc. (AXA) controlled DLJ and negotiated a merger with Credit Suisse Group (CSG). Under the terms of the merger, CSG would obtain cash and AXA’s stock in DLJ. CSG would then obtain the remainder of the outstanding DLJ stock, including Tooley’s and Lewis’s shares, via a tender offer. The tender offer was to expire after 20 days. The merger agreement provided for two types of extensions of this 20-day deadline, over which Tooley and Lewis had no control. The DLJ board of directors and CSG availed themselves of each of the extensions. Before the merger closed, Tooley and Lewis brought suit in the Delaware Court of Chancery, alleging that the DLJ board of directors breached its fiduciary duty to Tooley and Lewis by going along with the extensions. DLJ filed a motion to dismiss. The trial court dismissed Tooley and Lewis’s complaint on the ground that there was no special injury asserted by Tooley and Lewis, in that they did not suffer harm above and beyond the harm caused to other shareholders. Tooley and Lewis appealed.
Rule of Law
Issue
Holding and Reasoning (Veasey, C.J.)
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