(Lexology.com) The Delaware Court of Chancery recently upheld a claim that a director who voted to approve a merger had a conflict of interest based on his affiliation with a hedge fund that allegedly was focused on short- term gains. In refusing to dismiss the complaint, Vice Chancellor J. Travis Laster placed significant weight on the incumbent board’s “fight letters” during a proxy contest, which argued that the hedge fund was pursuing a quick sale of the company to advance its own interests at the expense of other stockholders.
Court Addresses Director’s Conflict Of Interest From Hedge Fund’s Short-term Investment Strategy
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