Shareholders of a broadband service provider can proceed with their lawsuit over the company’s $171 million merger with a rival, the Delaware Court of Chancery has ruled. Although the defendants had asked the court to issue a summary judgment that they did not breach their fiduciary duties, Vice Chancellor J. Travis Laster held that some of the defendants’ decisions may have fallen outside the range of reasonableness.
Board members of Occam Networks Inc., a Delaware corporation, were sued by the company’s shareholders, who alleged that the defendants breached their fiduciary duties when they agreed to a $171 million merger with Calix Inc. The shareholders, led by Herbert Chen, filed a lawsuit in the Chancery Court contending that the board’s actions fell outside the range of reasonableness and issued a proxy statement that contained misleading disclosures and material omissions.
