The Delaware Chancery Court has ruled that minority stockholders can pursue a direct equity dilution claim against a corporation’s control group.
"Although some Delaware courts have used the word ‘exclusive’ or its equivalent, in discussing direct equity dilution claims, the syllogism – if anyone other than the controller benefits from the transaction, then the minority may not assert a direct equity dilution claim – is much too simplistic," Vice Chancellor John W. Noble wrote last week in the case ofDubroff v. Wren.
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