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Tyson Foods Inc. continued its campaign Monday to void a landmark Delaware Court of Chancery opinion, telling the state supreme court that it should review the poultry giant’s appeal. “This court should hear the merits of Tyson’s entire appeal,” the company said in a 38-page brief. Tyson wants to void Vice Chancellor Leo E. Strine’s 2001 opinion in IBP v. Tyson as part of its defense of a class action filed by IBP shareholders. They lost money selling their stock after the Fayetteville, Ark.-based company improperly aborted the acquisition. Investors may use many of Strine’s findings against the company in the litigation, including the judge’s conclusion that Tyson suffered from “buyer’s remorse” after acquiring IBP for $4.7 billion in January 2001. Court rules would bar Tyson from refuting any of Strine’s conclusions unless it can vacate the opinion. The appeal is drawing unusual attention because Strine’s IBP v. Tyson decision is considered seminal. The judge addresses when a deterioration in a company’s finances constitutes a “material adverse change.” Strine essentially set a high standard for triggering a so-called MAC clause, which has made it more difficult for acquirers to back out of deals. If Tyson succeeds on appeal, Strine’s decision could no longer be cited as guidance in interpreting MAC clauses. The appeal centers on whether Tyson forfeited its right to appeal the bulk of its case. Lawyers for the investors argued in an April 29 filing that Strine issued a final order in IBP v. Tyson in August, which meant the 30-day window for appeals expired in September. The only item before the justices is Tyson’s appeal of Strine’s refusal to vacate his June ruling, they said. But Tyson said Monday that Strine did not enter a final order in August, arguing that the judge only issued an order resolving a separate stockholder issue. The court could not enter a final order because all potential disputes between Tyson and IBP had not been resolved, the company said. The potential need for Strine’s intervention did not end until Tyson closed the IBP purchase Sept. 28, Tyson said. Once that happened, the company moved for final judgment and to vacate the IBP-Tyson decision as moot. Tyson also argued that without supreme court review, it risks having the opinion used against it in federal court despite never having had a chance to appeal the decision. It also said the appeal is worth hearing because Strine formulated “unprecedented” rules regarding MAC clauses. After agreeing to buy IBP, Tyson voided the pact in March 2001, arguing that IBP misled it by hiding the extent of its troubles. Strine sided with IBP in June 2001, ordering Tyson to complete the deal. Rather than appeal, Tyson settled the case with IBP by agreeing to acquire the meat packer. Copyright (c)2002 TDD, LLC. All rights reserved.

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