In a recent decision, the Delaware Court of Chancery dismissed multiple claims filed against Novell Inc. by its shareholders who alleged the company's board was conflicted and breached its fiduciary duties when it sold a portfolio of patents and, in a separate transaction, approved a $2.2 billion acquisition by Attachmate Corp. Although the court found that Novell's board was not conflicted and that patent sale survived scrutiny under the business judgment rule, it allowed shareholder claims that the board provided Attachmate with preferential treatment over a bidder who allegedly made a more lucrative offer to proceed toward trial. The decision has caused many in Delaware's Chancery bar to question why different scrutiny was applied to the sale of company assets than the sale of the company itself.
Novell Decision Stirs Debate on Asset Sale, Merger Standards
Delaware Business Court Insider
January 9, 2013
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