IN RE WHEELABRATOR TECHNOLOGIES, INC. V. SHAREHOLDERS LITIGATION
663 A.2d 1194 (Del.Ch. 1995)
NATURE OF THE CASE: This was a shareholder dispute over a merger. Wheelabrator (D) filed a motion for summary judgment in a class action brought by shareholders in D, challenging a merger and alleging breach of fiduciary obligation to disclose to the class material information concerning the merger.
FACTS: Waste Management, Inc. and Wheelabrator Technologies (D) were both in the waste management business. In 1988 Waste bought 22% of D and elected four of its own directors to serve on D's 11-person board. In 1990 for reasons unknown, Waste and D negotiated a merger in which Waste would acquire another 33% of D's stock and D shareholders would get .574 D shares and .469 Waste shares for each D share they held. D's board held a special meeting. All members other than the four Waste board members were in attendance and they analyzed a report by Lazard Freres and Saloman Brothers, heard investment bankers and D's attorneys; all of whom said that the transaction was fair. The seven directors then unanimously approved the merger agreement. A proxy statement was then distributed explaining the transaction to D's shareholders. The shareholders by a majority of votes approved the merger; this even with not counting Waste's votes. P sued D arguing that Ds breached their duty of disclosure because the proxy statement was materially misleading. P contends that the transaction was not carefully considered as the disinterested board members only had three hours to consider and approve the merger.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
Get
free access to the entire content for Mac, PC or Online
for 2-3 days and free samples
of all kinds of products.
https://bsmsphd.com
