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Benyamin Ross, left, and Taylor Hathaway-Zepeda, right, of Gibson, Dunn & Crutcher. Courtesy photos

When is an extended family a control block? In Buttonwood Tree Value Partners v. R.L. Polk & Co., C.A. No. 9250-VCG (Del. Ch. Ct. July 24), the Delaware Court of Chancery acknowledged that while familial relations among a group of stockholders are not per se sufficient to establish a controlling stockholder block, a family that regularly refers to itself as a single unit may constitute a controlling stockholder block.

Background

R.L. Polk & Co., Inc. (the company) was a Delaware corporation owned and controlled by the Polk family since 1870. By 2010, the family had grown in size over multiple generations and collectively owned 90.5 percent of the company among 51 family members, with the remaining 9.5 percent owned by unaffiliated stockholders. Three of the seven directors on the company’s board were Polk family members.

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