Williams v. Geier
Delaware Supreme Court
671 A.2d 1368 (1996)
Facts
James Geier and other directors of Cincinnati Milacron, Inc. (Milacron) (defendants) endorsed a charter amendment to recapitalize the company and multiply the voting powers of its existing shareholders. The amendment was facially neutral and regularly adopted by a majority of Milacron’s shareholders. Nevertheless, Josephine Williams and other minority shareholders (plaintiffs) sued, charging that the amendment’s sole purpose was to enable Geier and other leading shareholders to outvote outsiders who, by acquiring minority shares, might try to effectuate a hostile takeover and unseat the existing board. The Delaware Court of Chancery considered but rejected evaluating the amendment under Delaware’s Blasius test. Instead, the court applied Delaware’s less demanding Unocal test and upheld the amendment as a reasonable and proportionate response to a corporate-takeover threat. The minority shareholders appealed to the Delaware Supreme Court.
Rule of Law
Issue
Holding and Reasoning (Veasey, C.J.)
Dissent (Hartnett, J.)
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