IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
WELDON D. SANDERS, 1)
Plaintiff, ;
V. ) Civil Action No. 14679
JOHN M. DEVINE, KENNETH WHIPPLE,)
ELIZABETH S. ACTON, S.I. GILMAN,)
MALCOLM S. MACDONALD, DAVID N. )
McCAMMON, DEAN E. RICHARDSON,
H. JAMES TOFFEY, JR., FORD ;
HOLDINGS, INC., FORD HOLDINGS )
CAPITAL CORPORATION and FORD
MOTOR COMPANY, ;
Defendants.
MEMORANDUM OPINION
Date Submitted: September 11, 1997
Date Decided: September 24, 1997
Joseph A. Rosenthal, Esquire, of ROSENTHAL, MONHAIT, GROSS &
GODDESS, P-A., Wilmington, Delaware; OF COUNSEL: Stanley M.
Grossman, Esquire and Paul 0. Paradis, Esquire (argued), of
POMERANTZ HAUDEK BLOCK & GROSSMAN, New York, New York; Attorneys
for Plaintiff.
R. Franklin Balotti, Esquire and Anne C. Foster, Esquire, of
RICHARDS, LAYTON & FINGER, Wilmington, Delaware; OF COUNSEL:
George M. Newcombe, Esquire (argued), of SIMPSON THACHER &
BARTLETT, New York, New York; Attorneys for Defendants.
LAMB, VICE CHANCELLOR
Pending before the Court is defendants' motion to dismiss
for failure to state a claim upon which relief may be granted ant
to strike the class action allegations found in the first two
counts of the Amended Complaint ("AC"). For the reasons set
forth infra the motion to dismiss shall be granted. I do not
reach the motion to strike.
I- Backaround
SNIPPETS:
Joseph A. Rosenthal, Esquire, of ROSENTHAL, MONHAIT, GROSS & GODDESS, P-A., Wilmington,
Paradis, Esquire, of POMERANTZ HAUDEK BLOCK & GROSSMAN, New York, New York; Attorneys for
R. Franklin Balotti, Esquire and Anne C. Foster, Esquire, of RICHARDS, LAYTON & FINGER,
Pending before the Court is defendants' motion to dismiss for failure to state a claim upon
This action arises out of a merger, announced October 13, 1995, of Ford Holdings Capital
Before the Merger, the Company's capital structure consisted of outstanding shares of common
In this action, he also purports to act on behalf of all persons who purchased Depositary
is the fact, not contested in this action, that the certificate of designations relative to
On March 20, 1997 Chancellor Allen determined that the holders of Ford Series A, B and C
See In the Matter of The Appraisal of Ford Holdings, Inc. Preferred Stock, Del.
Chancellor Allen reached this conclusion by determining that the instruments establishing the
[tlhere is no ambiguity in [the Certificate of Designations1 regarding the value to be paid
Rather than pursue his appraisal remedy, plaintiff Sanders filed this action on November 3,
at the time Ford issued the Shares its undisclosed corporate tax strategy created a risk to
Shares to be cashed-out at $25 per Share.
Plaintiff alleges damages to be the difference between the trading price of the Shares
The Shares were issued and sold pursuant to a public prospectus dated May 28,
Substantially the same disclosure is found at page 4 of the Prospectus.
It is inherent in a complaint alleging disclosure violations that the misstated or omitted
I shall consider the Prospectus for the matters disclosed therein and the certificate of
In order to prevail on a breach of fiduciary duty claim, plaintiff Sanders must first
for the disclosures made in connection with the offering.
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