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1
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LETTER OPINION
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EXTRACTED KEY WORDS
CARE CLAIMS COURT ESQUIRE MOTION DUTY DISMISS JOSEPH ROTHSCHILD JUDGEMENT LOYALTY CHANCELLOR PREJUDICE SUPREME COURT RECOVER DAMAGES APPELLATE ENTRY BASIS REASON MISTAKE RELIEF VICE CHANCELLOR TELXON CERTIFY REVIEW SUPPORT DEFENDANTS SUMMARY JUDGMENT DEL |
C O U R T O F C H A N C E R Y
O F T H E
STATE OF DELAWARE
J C O U
A C K B. J A C O B S
VICE-CHANCELLOR WILMINGTON. D
June 11,200l
Joseph A. Rosenthal, Esquire
Rosenthal Monhait Gross
& Goddess PA
Suite 1401 Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899- 1070
Steven J. Rothschild, Esquire
Paul J. Lockwood, Esquire
Skadden Arps Slate Meagher
& Flom LLP
One Rodney Square
P-0. Box 636
Wilmington, DE 19899
RE: Telxon Corporation v. Robert F. Meyerson, et.al.
C.A. No. 13139
Date Submitted: June 4,200l
Gentlemen:
- On April 2, 2001, the plaintiff filed an application to certify, under
Supreme Court Rule 42, an interlocutory appeal from this Court's Order dated
March 23,200l (the "March 23rd Order"). That Order granted the defendants'
motion for summary judgment in part, entering judgment for the defendants on
Joseph A. Rosenthal, Esquire
Steven J. Rothschild, Esquire
June 11, 2001
Page 2
all claims of a breach of the duty of loyalty, but reserving two duty of loyalty
claims for trial.
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2
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TELXONS REPLY MEMORANDUM OF LAW IN SUPPORT OF MOTION UNDER RULE 54B
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EXTRACTED KEY WORDS
COURT DUTY CARE CLAIMS DEFENDANTS MOTION SUPREME COURT LOYALTY DIRECTORS DISMISS MEYERSON APPEALS TELETRANSACTION OPENING MEMORANDUM BUSINESS JUDGMENT RULE CONTEND CHANCERY ESQUIRE DEL PREJUDICE CEDE SUPPORT PLAINTIFFS DEF REVIEW PURCHASE INFORMED7 FEDERAZ SUPR OPP |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
------------------------------------------------~.~------~-------x
TELXON CORPORATION,
Plaintiff, :
V. C.A. No. 13139-NC -.
ROBERT T. MEYERSON, RAYMOND D.
MEYO, DAN R. WIPFF, ROBERT A.
GOODMAN, DR. RAJ REDDY and NORTON :
W. ROSE,
Defendants. :
-------------------------------------------------~.~------~------x
TELXON'S REPLY MEMORANDUM OF LAW IN SUPPORT OF ITS
MOTION UNDER RULE 54(b)
ROSENTHAL, MONHAIT, GROSS &
GODDESS, P.A.
Suite 1401, Mellon Bank Center
919 N. Market Street
P.O. Box 1070
Wilmington, DE 19801
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
SIDNEY B. SILVERMAN, ESQUIRE
3 % East 93"' Street
New York, NY 10128
(646) 672-0054
DATED: June 4,200 1
Defendants, in their opposition to plaintiffs Rule 54(b) Motion ("Def, Opp."), attempt
deflect Telxon's contentions by raising false issues, and attributing to Telxon arguments it did not
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3
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DEFENDANTS OPPOSITION TO MOTION FOR ENTRY OF FINAL JUDGMENT PURSUANT TO RULE 54(B)
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EXTRACTED KEY WORDS
COURT TELXON MOTION DUTY CARE CLAIMS DEFENDANTS SUMMARY JUDGMENT LOYALTY CLAIMS PURSUANT TELXON CORPORATION CHANCERY GRANTING MEYERSON DELAWARE OPPOSITION DIRECTORS APPELLATE REVIEW SUPREME COURT TELETRANSACTION MEMORANDUM OPINION CERTIFICATION PREJUDICE CONSULTING AGREEMENT CASTLE COUNTY CONSULTING FEES PAID DISCRETION INFREQUENT HARSH DISMISSING PBC |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
TELXON CORPORATION,
Plaintiff,
V . Civil Action No 13139
I-
ROBERT F. MEYERSON, DAN R. WIPFF, ; ." "
ROBERT A. GOODMAN, DR. RAJ REDDY, : i -?
AND NORTON W. ROSE L "
.J-.
Defendants. : c:i
DEFENDANTS' OPPOSITION TO PLAINTIFF'S MOTION FOR ENTRY OF
FINAL JUDGMENT PURSUANT TO RULE 54(B)
On May 25, 2001, Plaintiff Telxon Corporation ("Plaintiff') filed a motion
pursuant to Rule 54(b) which in effect seeks to alter the Court's March 23,200l order
granting judgment on the duty of loyalty claims so that the Court explicitly enters a final
judgment on those claims. This is defendants' opposition to that motion.
PROCEDURAL HISTORY
On March 23,2001, this Court entered on order granting in part, and
denying in part, Defendants' motion for summary judgment such that judgment was
entered on all duty of loyalty claims, but two duty of care claims remain for trial (the
"March 23 Order"). (Ex. A) At that time, the parties disputed the appropriate form of
the order for the Court's July 24,200O memorandum opinion, but Plaintiff did not
propose a form of order that would have provided final relief for the duty of loyalty
claims.
On April 2,2001, Plaintiff filed an application pursuant to Supreme Court
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4
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PLAINTIFFS RESONSE TO MOTION TO DISMISS FOR LACK OF STANDING
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EXTRACTED KEY WORDS
COURT DELAWARE TELXON STOCKHOLDER BANGOR PUNTA PLAINTIFF DEFENDANTS ROTHSCHILD ASSETS SUPREME COURT ANDERSON MERGER WINDFALL SURVIVING CORPORATION OFTHE STOCK MOTION LEWIS CONTENTION BANK REASON STANDING PURSUING CONTROLLING DELAWARE LEGISLATURE DEL RECOVERY MANAGEMENT SANTA |
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
TELXON CORPORATION,
Plaintiff,
V. i CA. No. 13139
ROBERT F. MEYERSON et al
,-2, i
Defendants.
PLAINTIFF'S RESPONSE TO DEFENDANTS'
MOTION TO DISMISS FOR LACK OF STANDING
1. Preliminary Statement. In a letter to the Court dated September 12,2000, Mr.
Rothschild requested that the then plaintiff, Merchants National Properties, Inc. ("`Merchants") be
stayed from pursuing the stockholder derivative action it had commenced on behalf of Telxon
Corporation ("Telxon"). He stated that Symbol Techologies, Inc ("Symbol") and Telxon had agreed
to merge and that a stay was necessary in order "to protect Symbol's interest in controlling the
of Telxon" and not to deprive "Symbol-- the post-Merger owner of these claims -- from having a say
in the resolution of its rights."
Mr. Rothschild, after he heard Symbol's "say," reversed his position. He now claims that
it would be "inequitable" for Symbol to pursue the action. There are two obstacles to the completion
of Mr. Rothschild's back somersault: the Delaware Supreme Court and the Delaware Legislature.
2. The Delaware Supreme Court. Lewis v. Anderson' involved the merger of Conoco
Inc. ("Old Conoco") into DuPont's wholly owned subsidiary, renamed Conoco Inc. ("`New
Conoco"). One issue on appeal was whether New Conoco, if it elected, could prosecute a derivative
`Del. Supr.., 477 A.2d 1040 (1984).
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5
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DEFENDANTS OPPOSITION TO PLAINTIFFS REQUEST FOR CERTIFICATION OF INTERLOCUTORY APPEAL
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EXTRACTED KEY WORDS
COURT PLAINTIFF CERTIFICATION SUPREME COURT CRITERIA DEL SUPR SLIP EXHIBIT DISPOSITION JUDGEMENT DISMISS PREJUDICE CRITERIA SET GRANTING DENYING REVIEW COUNSEL SLA DEFENDANTS OPPOSITION REQUEST APPLICANT CONTEND WALSH PURSUANT BASIS INDICATING PARAGRAPH |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE % 0
=Jr, --(
IN AND FOR NEW CASTLE COUNTY E;--
2. w
f. -
- : i" fj
I,;:
TELXON CORPORATION,
-7
.A p
. -
ROBERT F. MEYERSON, DAN R. WIPFF,
ROBERT A. GOODMAN, DR. RAJ REDDY, :
AND NORTON W. ROSE
Defendants. :
DEFENDANTS' OPPOSITION TO PLAINTIFF'S REQUEST FOR
CERTIFICATION OF AN INTERLOCUTORY APP'EAL
On April 2, 2001, Plaintiff Telxon Corporation ("Plaintiff") filed an
application for certification of an interlocutory appeal. This is defendants'opposition to
that application.
I. Plaintiff Made No Attempt to Comply With Rule 42's Requirements.
Interlocutory appeals are accepted by the Supreme Court "only in
exceptional circumstances" and must relate to an order in the trial court that (i)
determines a substantial issue, (ii) establishes a legal right, a& (iii) satisfies at least one
of the other criteria set forth in Supreme Court Rule 42(b). Berman Real Estate Dev.,
Inc. v. Berdel, Inc., Del. Supr., No. 470, slip op. at 3, Veasey, C.J. (Dec. 6, 1995)
(Exhibit A). See also S. Ct. R. 42(b). Plaintiff's application does not cite Supreme Rule
42 ("Rule 42") and makes no effort to satisfy its express requirements.
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6
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APPLICATION FOR CERTIFICATION PURSUANT TO SUPREME COURT RULE 42
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EXTRACTED KEY WORDS
TELETRANSACTION MEYERSON DIRECTORS PAID CONSULTING AGREEMENT DEFENDANT COURT SUMMARY JUDGMENT EXHIBIT DUTY FORMER DIRECTORS FEES ACCIPITER RIGHTS COMPENSATION PEN-BASED PRODUCT DEFENDANT ROBERT CARE CLAIMS NON-EMPLOYEE DIRECTORS MISAPPROPRIATION CHIEF EXECUTIVE OFFICER TELETRANSACTION ACQUISITION COMPLAINT MISAPPROPRIATED PROPERTY BELONGING PLAINTIFF PEN-BASED COMPUTER PROJECTIONS CERTIFICATION SUPREME COURT RULE |
IN THE C!OURT OF CHANCERY IN THE STATE OF DELAWARE loib
IN AND FOR NEW CASTLE COUNTY
TELXON CORPORATION,
i
Plaintiff,
V. i CA. No. 13139
ROBERT F. MEYERSON et al
2-2,
Defendants.
APPLICATION FOR CERTIFICATION PURSUA.NT TO SUPREME COURT RULE 42
In this action alleging corporate wrongdoing, Telxon Corporation ("Telxon")' seeks leave
to appeal an interlocuiory order entered on March 23,2001, (the "Order"). The Order dismissed,
on motion for summary judgment, all claims of breach of duty of loyalty against Telxon's former
directors and reserved for trial, two duty of care contentions. Since Telxon can not recover damages
against its former directors on duty of care claims, it has no incentive to try them.* Accordingly,
Order may have the same effect, on Telxon's rights, as a final order.
The complaint (Exhibit A hereto) alleges that defendant Robert F. Meyerson ("Meyerson")
misappropriated property belonging to Telxon and turned such propemi over to Teletransaction
Corporation ((`Teletransaction") a company wholly owned by him and members of his family. The
property consisted of a plan, paid for by Telxon, to adapt pen based computing ("PBC") for its
products. The plan was worked on by Meyerson while he was engaged by Telxon, as a consultant
and serving as chairman of its board of directors.
-
' The action was commenced as a stockholders derivative action o.n behalf of Telxon.
the motions for summary judgment were decided but before the Order was entered, Symbol
Technologies Inc. acquired Telxon and it was realigned as party plaintiff.
* Since only duty of care claims survived summary judgment, the former directors, under 8
Del. C.
- - 5 102(b)(7)1, are immunized from liability. The corporation, however, will have to pay the
costs of the trial including legal fees of the defendants, its former directors.
SNIPPETS:
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7
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INC. V. MEYERSON INDOVIDUAL DEFENDANTS OPPOSITION TO PLANITIFFS MOTION
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EXTRACTED KEY WORDS
PLAINTIFF SUMMARY JUDGMENT TELETRANSACTION MOTION DEL WORKING PROTOTYPE DEFENDANTS REARGUMENT FACTS PEN-BASED COMPUTER ISAACSON INVESTMENT TECH ACQUISITION CONTENDS TESTIMONY MEYERSON TELXON INDIVIDUAL DEFENDANTS OPINION EXHIBIT WITNESSES BAR CODE CARE CLAIMS ACCIPITER CONSULTING AGREEMENT CONSULTING AGREEMENT PBC DISPLAY SCANNING |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWAP$'
IN AND FOR NEW CASTLE COUNTY /. . I..".
MERCHANTS NATIONAL
PRfOPERTIES, INC., -2 I :
Plaintiff,
V . : C.A. No. 13139
ROBERT F. MEYERSON, RAYMOND :
D. IMEYO, DAN R. WIPFF, ROBERT :
A. GOODMAN, DR. RAJ REDDY,
NORTON W. ROSE and TELXON
CORPORATION,
Defendants.
THE INDIVIDUAL DEFENDANTS' OPPOSITION
TO PLAINTIFF'S MOTION FOR REARGUMENT
SK4DDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
One Rodney Square
P.01. Box 636
Wilmington, Delaware 19899
(30:2)651-3000
Attorneys for Defendants
Robert F. Meyerson, Dan R. Wipff,
Robert A. Goodman, Dr. Raj Reddy
and Norton W. Rose
DATED: August 7,200O
TABLE OF CONTENTS
TABLE OF CASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
THEOPINION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SNIPPETS:
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8
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PLAINTIFFS MOTION FOR REARGUMENT
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EXTRACTED KEY WORDS
PROTOTYPE DEFENDANTS TELXON COMPUTING SUMMARY JUDGMENT EVIDENCE WORKING PROTOTYPE PLAINTIFF CONSULTING AGREEMENT COURT DIRECTORS PURCHASE MEYERSON COMMITTEE COST MOTION REARGUMENT CONTENTION EXHIBIT OWENS ISAACSON DEP PAY CONFLICTS COMMITTEE TESTIMONY TESTIFY EXISTENCE COUNSEL TECHNOLOGY |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
MERCHANTS' NATIONAl, PROPERTIES, INC., ))
Plaintiff, )
V . ) Civil Action
) No. 13539
ROBERT F. MEYERSON,. RAYMOND D. MEYO, 1 __--
DAN R. WIPFF, ROBERT A. GOODMAN,
DR. RAJ REDDY, NORTON W. ROSE, and 1
TELXON CORPORATION,
;
Defendants. )
PLAINTIFF'S MOTION FOR REARGUMENT
- -
Plaintiff moves, pursuant to Chancery Rule 59(f), for
reargument of this Court's Memorandum Opinion dated July 24,
2000 (the "Decision"). Plaintiff contelnds that, based upon
the record, plaintiff's cross-motion for summary judgment
should have been yranted. Plaintiff also submits that in
granting partial summary judgment in favor of the individual
defendants, the Court erroneously determ:-ned a disputed issue
of fact, and misconceived the extent and nature of plaintiff's
claims. The grounds for this Motion are as follows:
I. PLAINTIFF'S CROSS-MOTION FOR SUMMARY
JUDGMEm.SHOULD HAVE BEEN GRANTED.
Plaintiff contends that Telxon Corporation
("Telxon") owned 100% of Teletransaction Corporation, Inc.
("Teletransaction") from i-ts very inception, and was defrauded
by Robert F. Meyerson ("Meyerson"), the Chairman of Telxon's
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9
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MEMORANDUM OPINION
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EXTRACTED KEY WORDS
MEYO PLAINTIFF DEFENDANTS TELXON REDDY PAUL LOCKWOOD TELETRANSACTION WIPFF COURT ROSE DIRECTORS ROBERT DELAWARE GOODMAN ACCIPITER CONSULTING AGREEMENT SUMMARY JUDGMENT CARE CLAIMS INVESTMENT PBC PBC PROTOTYPE ACQUISITION RAJ REDDY WILMINGTON ATTORNEYS CLEVELAND PROPERTY RIGHTS PLAINTIFF CONTENDS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE //I
IN AND FOR NEW CASTLE COUNTY
MERCHANTS' NATIONAL
PROPERTIES, INC.
Plaintiff,
V. Civil Action No. 13139
ROBERT F. MEYERSON, RAYMOND :
D. MEYO, DAN R. WIPFF, ROBERT :
A. GOODMAN, DR. RAJ REDDY, :
NORTON W. ROSE and TELXON :`
:
CORPORATION, 3.
r
Defendants. ' .
- . .
- .
c. I
M E M O R A N D U M O P I N I O N `- c;-
C.7
Date Submitted: March 6, 1999
Date Decided: July 24,200O
Joseph A. Rosenthal, Esquire, of ROSENTHAL, MONHAIT, GROSS &
GODDESS, P.A., Wilmington, Delaware; and Sidney B. Silverman, Esquire, of
SILVERMAN, HARNES, HARNES, PRUSSIN & KELLER, New York, New
York, Attorneys for Plaintiff
Steven J. Rothschild and Paul J. Lockwood, Esquires, of SKADDEN, ARPS,
SLATE, MEAGHER & FLOM, LLP, Wilmington, Delaware; and GOODMAN
WEISS MILLER, Cleveland, Ohio, Attorneys for Defendants Robert F. Meyerson,
Din R. Wipff, Robert A. Goodman, Dr. Raj Reddy and Norton W. Rose
Thomas P. Preston, Esquire, of REED, SMITH, SHAW & McCLAY, Wilmington,
Delaware; Attorneys for Defendant Telxon Corporation
JACOBS, VICE CHANCELLOR
Pending are cross motions for summary judgment in this stockholders'
derivative action brought against the board of directors of Telxon Corporation
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10
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INDIVIDUAL DEFENDANTS REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT AND IN OPPOSITION TO PLAINTIFFS MOTION FOR SUMMARY JUDGMENT
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EXTRACTED KEY WORDS
MEYERSON TELXON JUDGEMENT COURT MEYO INVESTMENT GOODMAN TELETRANSACTION SUMMARY JUDGMENT ROSE DELAWARE REDDY DIRECTORS WIPFF SUPPORT DEFENDANTS PBC PRODUCT CONSULTING AGREEMENT TRANSACTION BUSINESS JUDGMENT PLAINTIFF CONTENDS PROTOTYPE DELAWARE LAW OPPOSITION ACQUISITION UNTERBERG HARRIS TESTIMONY STOCKHOLDER AUTHORITIES |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
MERCHANTS NATIONAL
PROPERTIES, INC., PUBLIC VERSION
Plaintiff,
V. : C.A. No. 13139 ;
-_ Y>
ROBERT F. MEYERSON, RAYMOND :
D. MEYO, DAN R. WIPFF, ROBERT :
A. GOODMAN, DR. RAJ REDDY,
NORTON W. ROSE and TELXON :
CORPORATION,
Defendants.
THE INDIVIDUAL DEFENDANTS' REPLY BRIEF
IN SUPPORT OF THEIR MOTION FOR SUMMARY
JUDGMENT AND IN OPPOSITION TO
PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
% SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899
(302) 651-3000
Attorneys for Defendants
Robert F. Meyerson, Dan R.. Wipff,
Robert A. Goodman, Dr. Raj Reddy
and Norton W. Rose
DATED: January 7,200O
TABLE OF CONTENTS
PAGE
TABLE OF CASES AND AUTHORITIES . . . . . . . . . . . . i
PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . . 1
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