Stay current on changes and developments in corporate law with a wide variety of resources and tools.
Sept. 28 — Millennial Media Inc. directors made sufficient disclosures about the company's $238 million merger with AOL Inc., the Delaware Chancery Court ruled, dismissing a shareholder suit ( Nguyen v. Barrett, 2016 BL 319536, Del. Ch., No. 11511-VCG, 9/28/16 ).
An Nguyen alleged that Millennial issued faulty disclosures concerning certain financial projections and its financial adviser's contingent-fee arrangement.
Because Millennial had a charter provision that shields board members from liability for breach of the duty of care, the only recourse left to the shareholder was to show a breach of the duty of loyalty, Vice Chancellor Sam Glasscock III said.
The court dismissed the claims, finding Nguyen failed to show that the directors acted disloyally by deliberately withholding information or by neglecting required tasks.
Millennial, a Baltimore-based mobile advertising company, was acquired by AOL in October 2015.
Nguyen argued that Millennial had a duty to disclose certain financial projections that its financial adviser—LUMA Securities LLC—used in its valuation of the company. Alternatively, the shareholder argued that Millennial's proxy misled investors that management, not LUMA, had created the projections.
The court also dismissed the shareholder's claim that the company had to provide more information about how its financial adviser would be paid. It found that Millennial's disclosure that a substantial portion of LUMA's fee was contingent upon the completion of the merger was adequate.
“This Court has repeatedly held that such a disclosure regarding advisor fees, absent some indication that the fee was exorbitant or unusual, or otherwise improper, is sufficient,” Glasscock wrote.
To contact the reporter on this story: Michael Greene in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Yin Wilczek at email@example.com
The opinion is available at http://src.bna.com/iYa.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)