Document: In Re Trados Inc. Shareholder Litig., C.A. No. 1512-CC, Chandler, C. (Del. Ch. July 24, 2009)
This purported class action alleging breach of fiduciary duty claims challenged a merger transaction whereby Trados Incorporated became a wholly owned subsidiary of SDL, plc and its preferred stockholders received over 80% of the consideration, executive officers received the balance and common shareholders received nothing. Defendants moved to dismiss the action but the Court declined to dismiss the fiduciary duty claims arising out of the board’s approval of the merger since plaintiff alleged facts sufficient to demonstrate that a majority of the board was not independent or disinterested. Four of the seven directors were designated as directors by holders of a significant number of preferred shares, and were alleged to have an ownership or employment relationship with entities that together owned 51% of Trados’ preferred stock.