A Delaware Court of Chancery judge on Monday allowed former investors in Straight Path Communications Inc. to proceed with claims that its controlling stockholder used his power to avoid more than $500 million in liability stemming from the telecommunication company’s $3.1 billion sale to Verizon.
Vice Chancellor Sam Glasscock III sided with The Arbitrage Fund and investment vehicle JDS1 in finding that claims for breaches of fiduciary duty against Howard Jonas’ and his family’s IDT Corp. were direct in nature, tossing aside Jonas’ argument that the suit was brought derivatively and was thus extinguished by the sale.
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