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1
.
MEMORANDUM OPINION
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EXTRACTED KEY WORDS
DEFENDANT DIRECTORS INTERCARGO MERGER DEL COURT STOCKHOLDERS DUTY COMPLAINT BREACH LEXIS MEM FACTS DELAWARE ESQUIRE VICE CHANCELLOR CONSUMMATION ALLEGATIONS PRELIMINARY INJUNCTION PROVISION REASONABLV TRANSACTION MERGER AGREEMENT PROXY STATEMENT MATERIALS CONNECTION ACQUISITION DISCLOSURE CLAIMS EXCULPATORY CHARTER TERMINATION FEE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SCOTT McMILLAN, JOHN NORBERG, >
JAMES M. WILSON TRUST, Peggy Wilson >
Trustee, CASTILLIAN VENTURES, INC., >
individually, and on behalf of all others >
similarly situated, >
>
Plaintiffs, >
>
V. > Civil Action No. 16963
>
INTERCARGO CORPORATION, a >
Delaware Corporation, and ARTHUR J. >
FRITZ, JR., KENNETH A. BODENSTEIN, >
ARTHUR L. LITMAN, ALBERT J. >
GALLEGOS, ROBERT B. SANBORN, >
MICHAEL L. SKLAR, GEORGE J. WEISE >
and STANLEY A. GALANSKI, >>
Defendants. >
MEMORANDUM OPINION
Date Submitted: March 3, 2000
Date Decided: April 20, 2000
Ronald A. Brown, Jr., Esquire, Bruce E. Jameson, Esquire, and Sheldon K. Rennie,
Esquire, of PRICKETT, JONES & ELLIOTT, Wilmington, Delaware; and R.
Bruce McNew, Esquire, of TAYLOR GRUVER & McNEW, Greenville,
Delaware, Attorneys for Plaintiffs.
David C. McBride, Esquire, Danielle Gibbs, Esquire, of YOUNG, CONAWAY,
STARGATT & TAYLOR, Wilmington, Delaware; OF COUNSEL: David L.
Schiavone, Esquire, Christopher Q. King, Esquire, Elena B. Gobeyn, Esquire, and
Jason L. Rubin, Esquire, of SONNENSCHEIN NATH & ROSENTHAL, Chicago,
Illinois, Attorneys for Defendants.
STlUNE, Vice Chancellor
Several stockholders of Intercargo Corporation have sued the (now
former) directors of Intercargo (the "defendant directors") for breach of
fiduciary duty in connection with the acquisition of Intercargo by XL
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2
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DEFENDANTS REPLY BRIEF IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS OR FOR SUMMARY JUDGMENT
|
EXTRACTED KEY WORDS
DEFENDANTS FACTS PLAINTIFFS ALLEGE COURT INTERCARGO SUPPORT FAILS EXCULPATORY PROVISION PROXY MCMILLAN ENHANCED SCRUTINY COMPLAINT TRANSACTION PROJECTIONS ALLEGATION CERTIFICATE SHAREHOLDERS PRESUMPTIONS UNREASONABLE ACTION PROXY STATEMENT REASONABLENESS PLAINTIFFS ARGUE OBTAINING LEXIS DISCLOSURE AGREEMENT DEFENSIVE ACTION |
QxlGiNAL 35
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SCOTT McMILLAN, JOHN NORBERG,
JAMES M. WILSON TRUST, Peggy Wilson
Trustee, CASTILLIAN VENTURES, INC.,
individually, and on behalf of all others i
similarly situated,
.
;
Plaintiffs, 1 :
I
V. i C.A.. No. 169.63
INTERCARGO CORPORATION, a Delaware ;
Corporation, and ARTHUR J. FRITZ, JR.,
KENNETH A. BODENSTEIN, ARTHUR i
L. LITMAN, ALBERT J. GALLEGOS, )
ROBERT B. SANBORN, MICHAEL L. SKLAR, )
GEORGE J. WEISE and STANLEY A.
GALANSKI ;>
Defendants. 1
DEFENDANTS' REPLY BRIEF IN SUPPORT OF THEIR
MOTION FOR JUDGMENT ON THE PLEAIDINGS OR
IN THE ALTERNATIVE, FOR SUMMARY JUDGMENT
David C. McBride
Danielle Gibbs
YOUNG CONAWAY STARGATT & TAYLOR, LLP
1 lth Floor, Wilmington Trust Center
1100 N. Market Street
P.O. Box 391
Wilmington, Delaware 19899-03'91
(302)571-6600
Attorneys for Defendant Intercargo Corporation
OF COUNSEL:
David Schiavone
Christopher King
Jason Rubin
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, lllinois 60608
(312)876-8000 Dated: February 25,200O
SNIPPETS:
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3
.
PLAINTIFFS ANSWERING BRIEF IN OPPOSITION TO DEFENDATNS MOTION FOR JUDGMENT ON PLEADINGS OR FOR SUMMARY JUDGMENT
|
EXTRACTED KEY WORDS
DEFENDANTS PLAINTIFFS COURT MOTION JUDGEMENT PROXY STATEMENT PROJECTIONS STOCKHOLDERS MERGER COMP DISCLOSURE DEL PLEADINGS FACTS DIRECTORS TRANSACTION REASONABLENESS MANAGEMENT FPK INVESTMENT AGREEMENT BUSINESS JUDGMENT RULE OBJECTIVES NEGOTIATIONS SHAREHOLDERS LITIGATION COMPLAINT WILMINGTON KENNETT PIKE AUTHORITIES |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SCOTT McMILLAN, et al.
Plaintiffs,
V. C.A. No. 16963-NC
INTERCARGO CORPORATION, et al.
Defendants. I
.~ PLAINTIFFS' ANSWERING BRIEF IN OPPOSITION
TO DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS
OR FOR SUMMARY JUDGMENT
PRICKETT, JONES, & ELLIOTT
Ronald A. Brown, Jr.
13ruce E. Jameson
Sheldon K. Rennie
l310 King Street,, P.O. Box 1328
Wilmington, DE 19899
t.302) 888-6500
- and -
TAYLOR GRUVER & MCNEW
Bruce R. McNew, Esquire
.3711 Kennett Pike, Suite 210
3reenvillc, DE 19808
Attorneys for Plaintiffs
Dated: January 21, 1999
TABLE OF CONTENTS
T-ABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . .
i
TXBLE OF AUTHORITIES . . ..__... . .
iii
NATIJRE AND STAGE OF PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SNIPPETS:
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4
.
ANSWER TO AMENDED COMPLAINT
|
EXTRACTED KEY WORDS
ALLEGATIONS PARAGRAPH DEFENDANTS DENY DEFENDANTS ADMIT INTERCARGO PROXY STATEMENT SPEAKS CHARACTERIZATION THEREOF ALLEGATIONS INCONSISTENT INCONSISTENT THEREWITH MERGER PROXY STATEMENT AGREEMENT STOCK PLAINTIFFS INFORMATION SUFFICIENT TRUTH DIRECTORS SKLAR SUBSIDIARIES ENGAGEMENT INSURANCE FOX-PITT CASH CERTIFICATE DELAWARE AMENDED COMPLAINT CUSTOMS SHARES COMMON STOCK |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SCOTT McMILLAN, JOHN NORBERG, )
JAMES M. WILSON TRUST, Peggy Wilson .- )
Trustee, CASTILLIAN VENTURES, INC., 1
individually, and on behalf of all others )
similarly situated, )1
Plaintiffs, 11
V. 1 C.A. No. 16963
1
INTERCARGO CORPORATION, a Delaware )
Corporation, and ARTHUR J. FRITZ, JR., 1
KENNETH A. BODENSTEIN, ARTHUR >
L. LITMAN, ALBERT J. GALLEGOS, >
ROBERT B. SANBORN, MICHAEL L, SKLAR, )
GEORGE J. WEISE and STANLEY A. >
GAIANSKI )>
Defendants. 1
ANSWER TO PLAINTIFFS' AMENDED COMPLAINT
Defendants, by their undersigned attorneys, answer the Amended Complaint as
follows. Unless specifically admitted, all properly pleaded factual allegations are denied.
INTRODUCTION
1. Defendants admit that Arthur J. Fritz, Jr., Kenneth A. Bodenstein, Arthur L.
Litman, Albert J. Gallegos, Robert B. Sanborn, Michael L. Sklar, George J. Weise and
Stanley A. Galanski (collectively "Directors") are Directors of defendant Intercargo , i
Corporation ("Intercargo" or the "Company"). Directors and Intercargo are referred to herein
collectively as "Defendants." Defendants admit that Intercargo is a publicly traded Delaware
corporation and that Intercargo entered into a merger agreement on or about December 1,
1998 (the "Merger Agreement") with X.L. America, Inc. ("XLA"), an indirect subsidiary of
X.L. Capital Ltd. (formerly known as EXEL Limited) ("XL Capital"). The Merger
Agreement speaks for itself as to its terms and defendants deny any characterization thereof or
any allegations inconsistent therewith. The transaction described by the Merger Agreement
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5
.
MEMORANDUM OPINION
|
EXTRACTED KEY WORDS
PLAINTIFFS PROXY MERGER DISCLOSURE SHAREHOLDERS STOCKHOLDERS INJUNCTION CASH PROXY STATEMENT PRELIMINARY INJUNCTION COURT DEFENDANTS PROPOSED MERGER DELAWARE CORPORATION MOTION FPK PROJECTIONS SUBSIDIARIES BOARD MEETING INVESTMENT AIMS IRREPARABLE HARM NEGOTIATIONS INSURANCE BUSINESS MANAGEMENT OMITTED FACT ACQUISITION OFFERING PRICE VICE CHANCELLOR RECORD HOLDERS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SCOTT McMILLAN, JOHN NORBERG, >
JAMES M. WILSON TRUST,Peggy Wilson )
Trustee, CASTILLIAN VENTURES, INC., >
individually, and on behalf of all others )
similarly situated, >)
Plaintiffs, >>
V. ) Civil Action No. 16963
>
INTERCARGO CORPORATION, a )
Delaware Corporation, and ARTHUR J. >
FRITZ, JR., KENNETH A. BODENSTEIN, >
ARTHUR L. LITMAN, ALBERT J. )
GALLEGOS, ROBERT B. SANBORN, ) "'
MICHAEL L. SKLAR, GEORGE J. WEISE ) [W-J
:
and STANLEY A. GALANSKI, >) ,;`, '
) :' ; "`, ,* 1;
Defendants.
:._ zi
.
Date Submitted: April 26, 1999
D
Ronald A. Brown, Jr. and Bruce E. Jameson, Esquires, of PRICKETT, JONES,
ELLIOTT & KRISTOL, Wilmington, Delaware; and Bruce R. McNew, Esquire, of
TAYLOR GRUVER & McNEW, Greenville, Delaware; Attorneys for Plaintiffs.
s
David C. McBride, Josy W. Ingersoll and Danielle Gibbs, Esquires, of YOUNG,
CONAWAY, STARGATT & TAYLOR, Wilmington, Delaware; and David L.
Schiavone, Christopher Q. King and Elena B. Gobeyn, Esquires, of
SONNENSCHEIN NATH & ROSENTHAL, Chicago, Illinois, Attorneys for
Defendants.
JACOBS, VICE CHANCELLOR
w
At issue on this motion for a preliminary injunction are the proxy
SNIPPETS:
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6
.
PLAINTIFFS REPLY BRIEF IN SUPPORT OF MOTION FOR PRELIM. INJUNCTION
|
EXTRACTED KEY WORDS
DEFENDANTS PLAINTIFFS COURT INTERCARGO STOCKHOLDERS DISCLOSURE FACTS DELAWARE INJUNCTION PROXY STATEMENT PRICE STOCK MARKET ORION BRUCE MCNEW DISCLOSE INVESTMENT BANKER TRANSACTION CONFLICT DISCLOSURES RELATING DAB REASONABLENESS MATERIALS DIRECTORS POB VOLATILITY IRREPARABLE HARM SHAREHOLDERS MANAGEMENT |
c,) I'>- i T, \I 1 r i,#",L f<,
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE '
IN AND FOR NEW CASTLE COUNTY
SCOTT McMILLAN, et al.
Plaintiffs,
V . C.A. No. 16963-NC
INTERCARGO CORPORATION, et al.
Defendants.
PLAINTIFFS' REPLY BRIEF IN SUPPORT
OF THEIR MOTION FOR PRELIMINARY INJUNCTION
PRICKETT, JONES, ELLIOTT & KRISTOL
Ronald A. Brown, Jr.
Bruce E. Jameson
1310 King Street, P.O. Box 1328
Wilmington, DE 19899
(302) 888-6500
- and -
TAYLOR GRUVER & MCNEW
R. Bruce McNew, Esquire
3711 Kennett Pike, Suite 210
Greenville, DE 19808
(302) 655-9200
Attorneys for Plaintiffs
Dated: April 23, 1999
16591.1\85004v1
SNIPPETS:
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7
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DEFENDANTS ANSWERING BRIEF
|
EXTRACTED KEY WORDS
PLAINTIFFS PROXY PRELIMINARY INJUNCTION DELAWARE DEFENDANTS PROXY STATEMENT SANBORN MOTION MERGER SHAREHOLDERS DEL PROJECTIONS COURT INVESTMENT HARM FPK INTERCARGO CORPORATION AGREEMENT DISCLOSURE TRANSACTION JOHN NORBERG MATERIALS INDICATION ACQUISITION DELAWARE LAW STOCKHOLDERS WILSON TRUST SOLICITATION PROCESS NEGOTIATIONS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SCOTT McMILLAN, JOHN NORBERG,
JAMES M. WILSON TRUST, Peggy Wilson
Trustee, CASTILLIAN VENTURES, INC.,
individually, and on behalf of all others
similarly situated,
Plaintiffs, 1 "; /
>
V. > C.A. No. 16963 ?"`, !
INTERCARGO CORPORATION, a Delaware
Corporation, and ARTHUR J. FRITZ, JR.,
KENNETH A. BODENSTEIN, ARTHUR
L. LITMAN, ALBERT J. GALLEGOS, >
ROBERT B. SANBORN, MICHAEL L. SKLAR,)
GEORGE J. WEISE and STANLEY A. )
GALANSKI )
Defendants.
DEFENDANTS' ANSWERING BRIEF IN OPPOSITION
TO PLAINTIFFS' MOTION FOR A PRELIMINARY INJUNCTION
David C. McBride
Josy W. Ingersoll
OF COUNSEL: Danielle Gibbs
Young Conaway Stargatt & Taylor, LLP
David L. Schiavone 1 lth Floor, Rodney Square North
Christopher Q. King P.O. Box 391
Elena B. Gobeyn Wilmington, Delaware 19899
Sonnenschein Nath & Rosenthal (302) 571-6600
8000 Sears Tower
233 S. Wacker Drive Attorneys for Defendants
Chicago, Illinois 60606
(3 12) 876-8000
Dated: April 21, 1999
SNIPPETS:
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8
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PLAINTIFFS OPENING BRIEF IN SUPPORT OF MOTION FOR PRELIM. INJUNCTION
|
EXTRACTED KEY WORDS
DEFENDANTS PLAINTIFFS COURT PROXY STATEMENT PROJECTIONS STOCKHOLDERS PRELIMINARY INJUNCTION MERGER DISCLOSURE STOCK PRICE REASONABLENESS DISCLOSE MOTION FPK ORION MANAGEMENT DIRECTORS AGREEMENT TRANSACTION INVESTMENT OBJECTIVES NEGOTIATIONS SHAREHOLDERS PROPOSED MERGER INTERNAL GROWTH INSURANCE EXPLANATION PROSPECTS SUBSIDIARIES |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SCOTT McMILLAN, et al.
Plaintiffs,
V. C.A. No. 16963-NC
INTERCARGO CORPORATION, et al.
Defendants.
PLAINTIFFS' OPENING BRIEF IN SUPPORT OF THEIR
MOTION FOR A PRELIMINARY INJUNCTION
PRICKETT, JONES, ELLIOTT & KRISTOL
Ronald A. Brown, Jr.
Bruce E. Jameson
1310 King Street, P.O. Box 1328
Wilmington, DE 19899
(302) 888-6500
- and -
TAYLOR GRUVER & MCNEW
Bruce R. McNew, Esquire
3711 Kennett Pike, Suite 210
Greenville, DE 19808
Attorneys for Plaintiffs
Dated: April 14, 1999
16692.1\85004vl
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