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1
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OPINION (REVISED)
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EXTRACTED KEY WORDS
ACE TERMINATE DIRECTORS STOCKHOLDERS CONTRACT BID SUPERIOR DELAWARE TRANSACTION MOTION ACE CONTENDS PLAINTIFF CASH SHARES PROVISION TRO WRITTEN ADVICE VICE CHANCELLOR ACQUISITION CONSUMMATION PRELIMINARY INJUNCTION TERMINATION NEGOTIATIONS QVC SILVER AFF FIDUCIARY DUTIES TEMPORARY RESTRAINING ORDER RESTRAINING ORDER NEGOTIATE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE /;T
/! CL;-a
IN AND FOR NEW CASTLE COUNTY
ACE LIMITED, a Cayman Islands limited )
liability company, >
Plaintiff, >>
V. >
> Civil Action No. 1748&
CAPITAL RE CORPORATION, . j
>
a Delaware Corporation, . `/
> P i . -i4
> I *
Defendant. > $?; ->
_. - c .:
OPINION
Date Submitted: October 25, 1999
Date Decided: October 25, 1999
Date Revised: October 28, 1999
Gregory P. Williams, Esquire, Robert J. Steam, Jr., Esquire, Megan Semple
Greenberg, Esquire, of RICHARDS, LAYTON & FINGER, Wilmington, Delaware,
Attorneys for Plaintiffs.
Kenneth J. Nachbar, Esquire, of MORRIS, NICHOLS, ARSHT & TUNNELL,
Wilmington, Delaware, Attorney for Defendants.
STRINE, Vice Chancellor
Plaintiff ACE Limited ("ACE") has filed a motion requesting a
temporary restraining order ("TRO") against defendant Capital Re
Corporation ("Capital Re"). ACE requests that I issue an order that restrains
Capital Re from taking any action to terminate the June 10, 1999 Agreement
and Plan of Merger between and among ACE, Capital Re, and CapRe
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2
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LETTER TO V.C. STRINE
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EXTRACTED KEY WORDS
DEL COURT TEMPORARY RESTRAINING ORDER MERGER AGREEMENT STRINE HONORABLE LEO IRREPARABLE HARM STOCKHOLDERS FIDUCIARY DUTIES SILVER DECL MOTION DIRECTORS CONTROL MEMORANDUM VICE CHANCELLOR STRIUE WRITTEN LEGAL ADVICE BUSINESS JUDGMENT STRATEGIC MERGER TRANSACTION PROVISION DELAWARE LAW RICHARDS CHANCERY IRREPARABLE HARM ABSENT INDEED UNIQUE HARM ABSENT RELIEF STANDARD PRELIMINARY INJUNCTION NEGOTIATE |
RICHARDS , L AYTON & F INGER
A PROFESS IONAL ASSOCIATION
O N E t?ODNEY SQUARE
P.O. Box 551
W ILMINGTON , D ELAWARE 19899
TELEPHONE: (302) 6 5 8 - 6 5 4 1
T E L E C O P I E R : (302) 6 5 8 - 6 5 4 8
WEBSITE: w w w . RLF.COM
t%UTER'SE!-~ADDRFdSS
WILLIAMS@RLF.COM
WRITEX'S DIRECT Drzu N UMBER
(302)651-7734
October 25, 1999
BY HAND
The Honorable Leo E. Strine, Jr.
Court of Chancery
Public Building
Wilmington, DE 19801
Re: ACE Limited v. Cauital Re Comoration,
Del. Ch., C.A. No. 17488
Dear Vice Chancellor Striue:
I write on behalf of plaintiff ACE Limited ("ACE") to reply to the arguments
set forth in defendant Capital Re Corporation's ("Capital Re") brief in opposition to ACE's
motion for temporary restraining order.
I. Capital Re Has Conceded That ACE Will Suffer Irreparable Harm
Absent A Temporary Restraining Order
The circumstances present here are indeed unique -- in opposing a motion for
temporary restraining order, Capital Re has conceded that ACE will suffer irreparable harm
absent relief. The question of irreparable ham is "the more critical question, and it is typically
the question that occupies the attention of the Court on an application for a temporary
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3
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MEMORANDUM OPINION
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EXTRACTED KEY WORDS
ACE TERMINATE DIRECTORS STOCKHOLDERS CONTRACT SUPERIOR DELAWARE BID TRANSACTION MOTION PLAINTIFF SHARES CONTENDS PROVISION COURT TRO ACQUISITION WRITTEN ADVICE VICE CHANCELLOR CONSUMMATION SILVER AFF PRELIMINARY INJUNCTION TERMINATION NEGOTIATIONS FIDUCIARY DUTIES DEFENDANTS TEMPORARY RESTRAINING ORDER RESTRAINING ORDER NEGOTIATE |
,. ,
r;
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE /L53(
IN AND FOR NEW CASTLE COUNTY
ACE LIMITED, a Cayman Islands limited )
liability company, >
Plaintiff, 1>
V. >
> Civil Action No. 17488
CAPITAL RE CORPORATION, )
a Delaware Corporation, >>
Defendant. >
MEMORANDUM OPINION
Date Submitted: October 25, 1999
Date Decided: October 25, 1999
Gregory P. Williams, Esquire, Robert J. Steam, ,Jr., Esquire, Megan Semple
Greenberg, Esquire, of RICHARDS, LAYTON & FINGER, Wilmington, Delaware,
Attorneys for Plaintiffs.
Kenneth J. Nachbar, Esquire, of MORRIS, NICHOLS, ARSHT & TUNNELL,
Wilmington, Delaware, Attorney for Defendants.
STRINE, Vice Chancellor
Plaintiff ACE Limited ("ACE") has filed a motion requesting a
temporary restraining order against defendant Capital Re Corporation
("Capital Re"). ACE requests that I issue an order that restrains Capital Re
from taking any action to terminate the June 10, 1999 Agreement and Plan
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4
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DEFENDANTS BRIEF IN OPPOSITION TO PLAINTIFFS MOTION FOR A TEMPORARY RESTRAINING ORDER
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EXTRACTED KEY WORDS
PLAINTIFF DEL MERGER AGREEMENT RESTRAINING ORDER PROPOSALS COURT STOCKHOLDERS WRITTEN ADVICE DELAWARE TRANSACTION TEMPORARY RESTRAINING ORDER SHAREHOLDERS DIRECTORS SILVER DECL FIDUCIARY DUTIES CORN PROBABILITY NEGOTIATIONS LEGAL COUNSEL MEMORANDUM KONTRABECKI GROUP PARAMOUNT COMMUNICATIONS AMAX MINERALS FINANCIAL ADVISORS PARTICIPATING HECCO VENTURES TRIAD PARK LLC PHELPS DODGE CORN |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
/
IN AND FOR NEW CASTLE COUNTY
ACE LIMITED, a Cayman Islands limited
liability company,
Plaintiff, `,
V. j C.A. No. 17488:NC v :
1 % i
CAPITAL RE CORPORATION, a Delaware
Corporation, i :. .;
> 1 i
Defendant. > I_
- .._
DEFENDANT'S BRIEF IN OPPOSITION TO PLAINTIFF'S
MOTION FOR A TEMPORARY RESTRAINING ORDER
MORRIS, NICHOLS, ARSHT & TUNNELL
Kenneth J. Nachbar
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899-l 347
(302) 65 8-9200
Attorneys for Defendant
Capital Re Corporation
October 24, 1999
i.
TABLE OF CONTENTS
TABLE OF CITATIONS ii
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5
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MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS MOTION FOR TEMPORARY RESTRAINING ORDER
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EXTRACTED KEY WORDS
MERGER AGREEMENT ACE PROPOSALS RESTRAINING ORDER COURT TERMINATE DIRECTORS TEMPORARY RESTRAINING ORDER DELAWARE LAW PLAINTIFF COMPL MOTION ENTERING UNSOLICITED PROPOSALS IRREPARABLE HARM TRANSACTION ACQUISITION WRITTEN ADVICE FIDUCIARY DUTIES MATERIAL BREACH FINANCIAL GUARANTY REINSURANCE STOCKHOLDERS TERMINATION THIRD PARTY DEFENDANT ENJOINING DOWNGRADE KONTRABECKI |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE I7
IN AND FOR NEW CASTLE COUNTY
ACE LIMITED, a Cayman Islands >
company, >>
Plaintiff, >> Civil Action No. 17488
V. >
CAPITAL RE CORPORATION, a
Delaware corporation,
Defendant.
MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF'S
MOTION FOR TEMPORARY RESTRAINING ORDER
Pursuant to Court of Chancery Rule 65, plaintiff ACE Limited ("ACE") respectfully submits
this Memorandum in support of its Motion for Temporary Restraining Order against defendant
Capital Re Corporation ("Capital Re") (i) restraining Capital Re from taking any action to terminate
the Agreement and Plan of Merger between and among ACE, Capital Re and CapRe Acquisition
Corp., dated as of June 10, 1999 (the `Merger Agreement"), (ii) enjoining Capital Re from entering
into a merger agreement with XL Capital Ltd. and (iii) enjoining the running of the
period, provided for under the Merger Agreement, during which ACE would be required to respond
to an unsolicited proposal if one had been properly considered by the Capital Re board of directors.
Capital Re has threatened to terminate the Merger Agreement after midnight on October 25,
1999 and to enter into a merger agreement with another company unless ACE increases the
consideration to be offered under the existing Merger Agreement. Verified Complaint ¶ 16 ("Compl.
¶ -"). These actions would constitute material breaches of the Merger Agreement and would cause
ACE irreparable harm. Compl. ¶¶ 1 l- 18, 19-24. In order to prevent such harm, ACE seeks the
RLFI-2071284.3
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6
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VERIFIED COMPLAINT
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EXTRACTED KEY WORDS
ACE BREACH TERMINATE REINSURANCE PLAINTIFF ACE BUSINESS BINDING PROPOSALS DELAWARE COMPLAINT INCORPORATES FINANCIAL GUARANTY DIRECTORS GROUP OFINTERNATIONAL CLIENTS COUNSEL FIDUCIARY DUTIES TERMINATION FEE DOWNGRADE RATING AGENCIES MATERIAL BREACH CAYMAN ISLANDS ATTORNEYS INSURANCE STOCK PURCHASE NEGOTIATIONS STOCKHOLDERS SUFFER IRREPARABLE HARM WRITTEN ADVICE BREACHING |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ACE LIMITED, a Cayman Islands company, )
Plaintiff,
V. Civil Action No. 1674 dg UG
CAPITAL RE CORPORATION, a
Delaware corporation,
Defendant.
VERIFIXD COMPLAINT CL.3
. m
Plaintiff ACE Limited ("Plaintiff' or "ACE"), by and through its attorneys; upon k&$wledge
as to its own conduct and upon information and belief as to all other matters, alleges for its
as follows:
NATURE OF THE ACTION
1. Plaintiff ACE brings this action to halt the further breach of a binding and enforceable
merger agreement (the "Merger Agreement") between ACE and defendant Capital Re Corporation
("Capital Re" or the "Company") and to assure that Capital Re does not improperly terminate the
Merger Agreement.
THE PARTIES
2. Plaintiff ACE is a company incorporated in the Cayman Islands. ACE, through its
subsidiaries, provides insurance and reinsurance products for a diverse group ofinternational
3. Defendant Capital Re is a Delaware corporation with its principal place of business
in New York, New York. Capital Re is a specialty reinsurance corporation that is engaged in the
RLFI-23683994
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