The Court granted the defendants’ motion to dismiss this class and derivative action which challenged a stockholder rights offering. The plaintiff claimed that the defendant directors set the offering at an inadequately low price so as to trigger anti-dilution provisions in their stock option agreements and the controlling shareholder’s warrants. The Court found that the anti-dilution provisions maintained unchallenged, pre-existing contractual rights which left the defendant directors in substantially the same position they were in prior to the offering. The Court also found that the plaintiff did not sufficiently allege that the directors engaged in disloyal conduct.
