IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
CANAL CAPITAL CORPORATION,
derivatively by Daniel Klein
as Trustee for Sonar Radio
Corp. Profit Sharing Plan,
Plaintiff,
V. Civil Action No. 11,764
RAYMOND FRENCH, ASHER B.
EDELMAN, GERALD N. AGRANOFF, 1
DANIEL R. KAIL, BURTON LEHMAN,)
CLARK R. MANDIGO, MICHAEL E. )
SCHULTZ, and DWIGHT D.
SUTHERLAND, & :
;
Defendants. ;
and ;
CANAL CAPITAL CORPORATION, ;
a Delaware Corporation, ;".
Nominal Defendant.
MEMORANDUM OPINION
Date Submitted: March 5, 1992
Date Decided: July 2, 1992
Pamela S. Tikellis, Esquire, James C. strum, Esquire and Edward
Seglias, Esquire of GREENFIELD & CHIMICLES, Wilmington,
Delaware, Attorneys for Plaintiff
Lawrence C. Ashby, Esquire and Keith R. Sattesahn, Esquire of
ASHBY & GEDDES, Wilmington, Delaware; Of Counsel, Irwin J.
Sugarman, Esquire, Chaye Zuckerman Shapot, Esquire and Howard
0. Godnick, Esquire and Glenn E. Butash, Esquire of SCHULTE
ROTH & ZABEL, New York, New York, Attorneys for Defendants
BERGER, Vice Chancellor
Plaintiff, a stockholder of Canal Capital Corporation
(l'Canall'), brought this derivative action charging the
SNIPPETS:
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
DANIEL R. KAIL, BURTON LEHMAN,) CLARK R. MANDIGO, MICHAEL E.)
SCHULTZ, and DWIGHT D.
Pamela S. Tikellis, Esquire, James C. strum, Esquire and Edward Seglias, Esquire of
Godnick, Esquire and Glenn E. Butash, Esquire of SCHULTE ROTH & ZABEL, New York, New York,
Plaintiff, a stockholder of Canal Capital Corporation, brought this derivative action
The complaint alleges that Edelman, the beneficial owner of 52% of Canal's stock, and his
The facts, as alleged in the complaint, may be summarized as follows.
Securities Co.,
investment contract between Canal and Edelman Management', complete authority over Canal's
Supr., 571 A.2d 1140, 1150, citing 8 Del.
Since securities trading composes a substantial part of Canal's business, plaintiff argues
Such an arrangement would "substantially encroach on the duty of directors to exercise
Gettv Oil Co., 493 A.2d at 943, the Delaware Supreme Court recognizedthatdirectors I
The other due care claim is based upon the failure to cancel the investment advisory contract
In order to state a claim for waste, plaintiff must allege facts which, if true, indicate
Plaintiff's theory that the investment advisory contract is illusory is based upon his
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