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Corporations Spring 2023
In re Delphi Financial Group Shareholder Litigation.
This decision involves a target with a controlling stockholder, Rosenkranz. The decision revolves around Rosenkranz’s attempt to obtain a higher price for his shares than for the minority shares.
As you read the decision, consider the following questions:
1. Ex ante, what did Rosenkranz promise to do in a future sale, according to the court? Why do you think he would have made this promise?
2. Ex post, was this promise economically enforceable? In particular, could Rosenkranz be forced to agree to a sale in the first place? How did the court deal with this here?
3. What rule would have governed in the absence of an explicit charter provision?
4. Did Rosenkranz in fact promise what the court says he promised?
5. Bonus question: Could Rosenkranz have amended the charter provision in question without the approval of the minority shareholders? Cf. DGCL 242(b)(2).
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