Document: In re: The Topps Co. S’holders Litig., C.A. No. 2786-VCS, Strine, V.C. (Del. Ch. June 14, 2007)
The Court issued a preliminary injunction to correct disclosure violations where the proxy statement did not discuss unfavorable valuation calculations, and disparaged the offer of a second bidder who was restricted from responding by a standstill agreement with the company. The Court enjoined the corporation from entering into the merger until it released the second bidder from covenants in the standstill agreement that prevented such bidder from responding to the proxy statement. The Court, however, refused to enjoin the merger based on the directors’ alleged breached of the fiduciary duty to achieve the highest sale price for the corporation, where an earlier auction had failed and the corporation did not have a poison pill in place, and the directors secured a 40 day go-shop provision in the merger agreement.