Document: Ryan v. Lyondell Chemical Corp., et al., C.A. No. 3176-VCN, Noble, V.C. (Del. Ch. July 29, 2008)
The Court denied two of Defendant Lyondell Chemical Company’s (“Lyondell”) motions for summary judgment with regard to a class action suit challenging its cash for shares merger with Defendant Basell AF (“Basell”). The Court allowed the suit to proceed on the claim of failure to satisfy Revlon duties based on the allegations that Lyondell’s board of directors did not take affirmative steps to confirm a better deal could not be obtained and hastily completed the deal with Basell in less than seven days. As it never conducted any type of market check, the Lyondell board could not show at this stage of the proceedings that it was knowledgeable about the value of the company. In addition, the Lyondell board did not establish it satisfied the Unocal test because it could not establish why the several deal protection devices granted were appropriate under the circumstances. The Court then dismissed Plaintiff’s claim against Lyondell for breach of loyalty because the Lyondell board was not motivated by self-interest to approve the merger and the Plaintiff did not challenge the board’s independence. The Court also dismissed Plaintiff’s claim against Lyondell for breach of disclosure duties because the proxy materials disclosed the material information in a full and accurate manner.