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If Vice Chancellor Leo E. Strine Jr. were to discuss his handling of the merger fight between IBP Inc. and Tyson Foods Inc. (which he won’t) he would probably argue that the case is not “chicken feed.” Such asides are a hallmark of the Delaware judge, who has quickly developed a reputation as one of the sharpest, and perhaps — depending on your sense of humor — the funniest member of the Delaware Chancery Court. “He has a tremendous wit combined with a great intellect,” said Charles M. Elson, director of the Center for Corporate Governance at the University of Delaware. “That makes for a very effective judge.” Strine is in the spotlight now because IBP has asked him to order Tyson to complete their $4.7 billion merger. The case explores when a breach of a merger agreement by one party gives the other side the right to back out. Vice Chancellor Strine issued a ruling in favor of IBP on Friday. During that nine-day trial at the end of May, Strine’s penchant for hokey one-liners was on constant display and frequently defused sometimes tense situations between lawyers and witnesses. JOKING JUDGE When Tyson chairman John Tyson was on the stand, his lawyer asked him for reaction to IBP officials repeatedly going back on their word regarding problems at a subsidiary. Anthony Clark of Skadden, Arps, Slate, Meagher & Flom suggested Tyson may have been “PO’ed” at IBP officials. Strine quipped: “Poultry’ed off.” When an IBP lawyer from Wachtell, Lipton, Rosen & Katz complained about getting information from Tyson officials at 11:30 the previous night rather than days earlier, when requested, Strine asked why that would be an issue. “That’s like halfway through your working day, right?” A frequent subject of his jokes were the many sets of binders of trial exhibits the lawyers kept placing on the witness stand. “That’s one thing I’ve learned in this job is how to manipulate binders,” Strine said toward the end of the trial. “I’ll be a wealthy man some day.” In a recent interview, the vice chancellor said he uses the jokes intentionally to grease the wheels of the judicial process. “Everyone works so hard in these things and they are very serious,” Strine said. “But if you can set a more relaxed atmosphere it helps everyone get through it.” GOOD TEACHER While some may argue that Strine’s jokes do not always qualify as USDA Prime, legal experts say the 37-year-old judge is quickly developing into one of the country’s top jurists despite only being on the bench since 1998. “He has earned his stripes,” said Lawrence Hamermesh, a professor at Widener University School of Law in Wilmington, Del. “He is increasingly a good teacher of corporate law and he has become very well respected in academic circles. He not only decides cases well but also goes a long way in clarifying the law.” Lawyers who practice before him said Strine tries to develop and rationalize the law rather than just issue quick-hit decisions that provide little guidance for future litigation. Strine’s most significant ruling came in February 2000 when he released a 136-page decision in a hostile takeover fight between Chesapeake Corp. and Shorewood Packaging Corp. Shorewood directors had adopted a “supermajority” provision that required 60 percent of the shareholders to approve any change in the firm’s bylaws. The supermajority rule was intended to thwart efforts by Chesapeake to install directors friendly to its $775 million acquisition offer. The judge said the supermajority provision should have been subjected to a shareholder vote rather than implemented by directors in the midst of the takeover battle. The ruling effectively shot down a popular anti-takeover device. WRITING JUDGE His other major decision involved so-called “no talk” provisions. Ruling in October 1999, Strine refused to issue a temporary restraining order against Capital Re Corp. discussing a merger with XL Capital Ltd. The TRO was requested by Ace Ltd., which owned 12.3 percent of Capital Re and had a deal to acquire an additional 33.5 percent. Ace charged that Capital Re was barred by the merger agreement from talking to another bidder unless it received a legal opinion declaring that such negotiations were required. The judge said such a “no talk” provision was unenforceable because directors had a fiduciary duty to seek out the best deal possible for shareholders. He said directors could agree not to “play footsie” with other bidders, but could not completely abdicate their responsibility to consider higher offers. Strine has not limited his writings to court opinions. In a fairly unusual move for a sitting judge, Strine has written a lengthy article in the May issue of Business Lawyer, the quarterly publication of the American Bar Association’s business law section. The paper, a footnoted version of a speech he gave in January at New York University, focuses on deal protection measures in stock-for-stock mergers. Strine suggests that the key to evaluating such measures is to look at shareholders: If the protections merely ensure that the board’s choice is presented first to shareholders and does not preclude the rejection of a deal in favor of another offer, then they are probably acceptable. “Of course, the judicial task of determining whether deal protection measures have deprived stockholders of a fair chance to vote freely on a transaction has its own difficulties,” Strine writes. “Nonetheless, channeling the judicial inquiry in this way has the virtue of reinforcing the primacy of director and stockholder decision-making.” While the legal thesis may be dry, Strine does his part to help the reader along. As part of a hypothetical, he had one company’s stock increasing significantly because it owned the rights to Britney Spears’ memoir of her month on “Temptation Island.” He then adds a footnote: “The author prays that this reference is hopelessly obscure to anyone reading this piece after the year of its initial publication.” CONTENTIOUS NOMINATION Strine has Delaware roots, graduating in 1985 from the University of Delaware before going to law school at the University of Pennsylvania. After graduating in 1988, he clerked for Judge Walter K. Stapleton of the 3rd U.S. Circuit Court of Appeals and Chief Judge John F. Gerry of the U.S. District Court for the District of New Jersey. He also spent two years in the early 1990s as an associate in the Wilmington office of Skadden Arps. He left private practice in 1993 to join Delaware Gov. Thomas R. Carper, a Democrat, as a counsel. His six years advocating for the governor returned to haunt him in his 1998 confirmation. The state senate nearly blocked his nomination after a contentious Oct. 13, 1998, hearing during which Strine squared off with several lawmakers. The Delaware Law Weekly reported that Strine told one lawmaker that his obligation was to vote his credentials and not evaluate him based on his six years as counsel to the governor. Sen. Steven H. Amick, a Newark Republican, responded, “My duty is to uphold the reputation of the courts.” Strine ended up winning a 12-year term to the court on a 12 to 8 vote, one more vote than needed. His confirmation was dogged by allegations that the governor agreed to appoint friends or relatives of several senators to government posts in exchange for their votes. After the vote, Strine tried to mend fences. “I’m going to do everything I can to uphold the tradition of the court,” he told the Delaware Law Weekly. By all accounts, he’s done that. “He came to the bench with a bit of controversy,” said one lawyer who practices before the judge. “But most of the corporate bar think he has acquitted himself quite well.” TRENCH WARFARE In the interview, Strine said he occasionally misses the rough and tumble world of politics. “I’m not sure I’ll ever have as much joy as I did working with Gov. Tom Carper,” Strine said. “I liked the trench warfare.” He also was quite successful at it, winning credit for helping the governor enact welfare and education reform packages. That experience helps him in the Chancery Court, Strine said. Cases often involve questions of legislative intent, he said. “I have a keener understanding of how limited the judiciary role is and the care needed not to step on the toes of legislators,” he said. Working for the governor also gave him an understanding of how complex organizations such as major corporations work. “It gave me an appreciation for the multiple demands on people involved in complex organizations,” he said. “It is not a perfect analogy to life in a corporation, but it gave me a sense for why some things are not always neat and simple.” Strine also relates to the corporate lawyers who appear before him, thanks to his two years at Skadden. “I got to do the stuff on the other side of the table,” he said. “I was only there for two or three years, but I got to work on complex transactions and got an appreciation of the frustrations of complex litigation and the joys of it and the demands of it.” ACTIVE PARTICIPANT Why did he want to go to the Chancery Court? “If you are in Delaware and you are a lawyer then you naturally gravitate toward corporation law,” he said. “Once you do that you realize just what a special place the Chancery Court is.” Strine is an active participant in trials. Beyond the jokes, the judge throughout the IBP-Tyson trial telegraphed reasons why some aspects of the case bothered him, though he gave the parties wide latitude to try their own cases. These traits were on display during an in-chamber conference with lawyers on May 24. Skadden’s Clark said Tyson had just learned of a potential new witness in the case, Rodney Helus, who was one of the original internal auditors sent in October to investigate problems at IBP’s DFG subsidiary. A transcript of the conference shows that Clark hoped to use Helus, who left the company shortly after the merger was announced, to show that IBP was aware that problems at DFG were much more significant than it disclosed in a November press release. IBP lawyers objected to the late addition of Helus, who could not be deposed by them until the morning of the final day of trial. Clark responded that Tyson just learned of Helus after the poultry giant’s general counsel received an anonymous call suggesting the company find the former auditor. Strine expressed his distaste for the testimony but declined to bar Tyson from calling Helus. “I’m going to express right off — I mean, there are a thousand reasons why people can have axes to grind … . You know, I’ll just leave it at that,” he said. “But I’ll hear from the person. I mean, that sort of thing just leaves me a bit cold.” In the end, Tyson lawyers decided not to call Helus. HEART OF THE CASE The judge also frequently asked his own questions of the witnesses, often presenting lengthy hypotheticals that closely matched the fact pattern involved in the dispute. With several witnesses in the IBP-Tyson trial, Strine tried to drive at the heart of the case — whether IBP’s need to restate earnings because of problems at DFG were material. If such restatements are material, Tyson would win the case. With Tyson chief financial officer Steve Hankins, Strine instructed him to assume that IBP took the charges all in the fourth quarter rather than restating past quarters. Such a move would have meant that IBP did not violate a warranty in the merger agreement concerning the accuracy of past Securities and Exchange Commission filings. “Tell me in your view why the situation would be less problematic,” Strine said. During questioning of IBP’s expert on what makes a restatement material, Strine asked why even a small error could not be material because it would provide information about the competence of management. With IBP Chairman Bob Peterson, Strine suggested that problems at DFG could be less important to Tyson when it was bidding $26 per share and more important when it was bidding $30 per share. “Every buyer has a break point and once you get near the break point, don’t even little things matter?” he asked. IRREVERENT In the interview, Strine said he has more freedom than other judges to question witnesses because there are no juries in Chancery Court. “In the end the judge is going to have to decide the case, and sometimes you just want to have a conversation with the witness,” he said. Lawyers also are reluctant to ask witnesses some questions for fear of what the answer could mean to their case, he said. “Sometimes we can ask the questions that the lawyers are afraid to ask,” he said. “Lawyers don’t like to ask a question that begins with ‘Why.’ But sometimes it is nice to ask a question that begins with ‘Why.’ “ How long Strine will remain on the bench is an open question. His term runs for about 10 more years, though several Wilmington lawyers said they would expect Strine to seek new opportunities before then, perhaps on the federal bench or on the state supreme court. Strine says he has every intention of serving a full term, though he declined to rule out an early departure. “Just like companies don’t like making projections, I’d be less than candid to say I know what I will be doing in five years or 10 years,” he said. Based on the reaction so far of the corporate bar, no one is anxious for Strine to seek the exit door. “He is definitely a judge of a different generation than the others on the bench,” said one Wilmington lawyer. “He has a certain irreverence to him.” Copyright (c)2001 TDD, LLC. All rights reserved.

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