E. Norman Veasey

“ While the court is not expected to substitute its business judgment for that of the directors in areas where particular business expertise is an ingredient of the decision, [13] the reasonableness of the business judgment of the conflicted directors' decision must be examined searchingly through a principled and disciplined analysis. The decision of the trial court did not plainly delineate and articulate findings of fact and conclusions of law so that this Court, as the reviewing court, could fathom without undue difficulty the bases for the trial court's decision. ”

“ Accordingly, there is no inequity in limiting ESOP benefits to the employee stockholders. Indeed, it makes no sense to include non-employees in ESOP benefits. The fact that the Class B stock represented 75 percent of the Corporation's total equity is irrelevant to the issue of fair dealing. The Class B stock was given no voting rights because those stockholders were not intended to have a direct voice in the management and operation of the Corporation. They were simply passive investors--entitled to be treated fairly but not necessarily to be treated equally. ”

“ If they are to sell their shares, they must persuade defendants to authorize' a repurchase by the company. The stockholders have no bargaining power and must accept whatever terms are dictated by defendants or retain their stock. If the stockholder is pressed for cash to pay estate taxes, for example, as has happened more than once, the stockholder is entirely at defendants' mercy. Defendants recognized their employee stockholders' liquidity needs when they established the ESOP. As noted previously, employees have the option of taking cash in lieu of the shares allocated to their accounts. ”

“ The requirement of fairness is unflinching in its demand that where one stands on both sides of a transaction, he has the burden of establishing its entire fairness, sufficient to pass the test of careful scrutiny by the courts. ”

“ The tools of good corporate practice are designed to give a purchasing minority stockholder the opportunity to bargain for protection before parting with consideration. It would do violence to normal corporate practice and our corporation law to fashion an ad hoc ruling which would result in a court-imposed stockholder buy-out for which the parties had not contracted.
In 1967, when the Delaware General Corporation Law was significantly revised, a new Subchapter XIV entitled "Close Corporations ”

“ It is often of critical importance whether a particular decision is one to which the business judgment rule applies or the entire fairness rule applies. It is sometimes thought that the decision whether to apply the business judgment rule or the entire fairness test can be outcome-determinative. ”

“ The trial court in this case, however, appears to have adopted the novel legal principle that Class B stockholders had a right to "liquidity" equal to that which the court found to be available to the defendants. It is well established in our jurisprudence that stockholders need not always be treated equally for all purposes. ”

“ Equity is according to the conscience of him that is Chancellor, and as that is larger or narrower, so it Equity. 'Tis all one as if they should make the standard for the measure we call a "foot" a Chancellor's foot ”

“ Moreover, in addition to such mechanisms, a stockholder intending to buy into a minority position in a Delaware corporation may enter into definitive stockholder agreements, and such agreements may provide for elaborate earnings tests, buy-out provisions, voting trusts, or other voting agreements. ”

“ Lewis, Del. Supr., 473 A.2d 805, 812 (1984) ; Smith v. Van Gorkom, Del. Supr., 488 A.2d 858, 872-73 (1985) . When there is no independent corporate decisionmaker, [6] the court may become the objective arbiter. ”