Supreme Court Affirms Board's Reliance on Solvency Opinion

Business Valuation UpdateVol. 4 No. 1
Legal and Court Case Update
January 1998
5411 Grocery Stores
445110 Supermarkets and Other Grocery (except Convenience) Stores
breach of fiduciary duty
breach of fiduciary duty, disclosure, solvency, recapitalization, tender offer

Klang v. Smith's Food & Drug Center, Inc. (II)
702 A.2d 150, 1997 Del. LEXIS 402
November 7, 1997
US
State Court
Delaware
Supreme Court
Veasey

Summary

On appeal, plaintiffs brought a punitive class-action suit alleging that the repurchase of shares in connection with an acquisition resulted in the impairment of capital.

See Also

Klang v. Smith's Food & Drug Center, Inc. (II)

Issue is whether directors breached their fiduciary duty of candor by failing to disclose material facts prior to shareholder approval of transactions.