Document: In Re BioClinica, Inc. Shareholder Litig., C.A. No. 8272-VCG (Del. Ch. Feb. 25, 2013)
The Delaware Court of Chancery declined to expedite plaintiffs’ claims that the board of directors of BioClinica, Inc. (“BioClinica”) breached its fiduciary duties by entering into merger and standstill agreements that relegated potential interlopers to making a tender offer for BioClinica. BioClinica also had a stockholder rights plan in place at the time it agreed to be acquired by JLL Partners, Inc. (“JLL”), the transaction at issue, which would be triggered upon the announcement of a tender offer by any person other than JLL. In reaching its decision, the Court noted that the triggering of the pill’s “flip in” provisions would give BioClinica’s stockholders the option to purchase $7.25 in preferred stock for $16.00. Because no rational stockholder would exercise the flip-in right, and the BioClinica board could terminate the merger agreement to pursue a superior proposal and redeem the pill at any time prior to a competing bidder acquiring 20% of its stock, the plaintiffs’ claims that the deal protection devices were preclusive of other offers, were not colorable.