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1
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LETTER OPINION
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EXTRACTED KEY WORDS
COMPLAINT CITIGROUP TRANSACTIONS DIRECTORS DERIVATIVE LITIGATION DEFENDANTS DEMAND FACTS ALLEGES STANDARD MOTION DISMISS CONTENDS LOYALTY WASTE REASONS FAIRNESS STANDARD CHANCERY RULE SUPPORT ALLEGATIONS BECKMANN DEL COURT YORK PLEADS BREACH INFERENCE CARE COMPENSATION |
COURT OF C HANCERY
O F T H E
STATE OF D EL AWARE
L EO E. STRINE, J R. CO URT HOUSE
V I C E - C H A N C E L L O R WILMINGTON .
January 8, 2002
Norman M. Monhait, Esquire
Rosenthal, Monhait, Gross & Goddess
Mellon Bank Center, Suite 1401
P.O. Box 1070
Wilmington, DE 19899
Edward P. Welch, Esquire
Skadden, Arps, Slate, Meagher & Flom
One Rodney Square
P.O. Box 636
Wilmington, DE 19899-0636
Jon E. Abramczyk, Esquire
Morris, Nichols, Arsht & Tunnel1
120 1 North Market Street
P.O. Box 1347
Wilmington, DE 19899- 1347
Re: In Re The Student Loan Corp. Derivative Litigation. C.A. No. 17799
Dear Counsel:
Before the court is a motion to dismiss a derivative complaint brought
on behalf of The Student Loan Corporation against Student Loan's directors,
its corporate parent Citibank (New York), and its corporate grandparent,
Citigroup, Inc. Citibank (New York) owns 80% of the common stock of
Student Loan, and is a wholly owned subsidiary of Citigroup. For the sake
of simplicity, I hereinafter refer to both Citibank (New York) and Citigroup
In Re The Student Loan Corp. Derivative Litigation, C.A. No. 17799
January 8,2002
Page 2
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2
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REPLY BRIEF IN SUPPORT OF MOTION TO DISMISS OF CITIGROUP THE STUDENT LOAN CORP. AND INDIVIDUAL DEFENDANTS
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EXTRACTED KEY WORDS
STUDENT LOAN PLAINTIFF DEFENDANTS BUSINESS JUDGMENT DIRECTORS ARONSON CITIGROUP COURT SUPR COMPLAINT FACTS DELAWARE SUPPORT MOTION INDIVIDUAL DEFENDANTS INDEPENDENCE ALLEGATIONS BENEROFE TRANSACTIONS AUTHORITIES VALID EXERCISE PLAINTIFF FAILS CONTROLLING CHANDLER MAJORITY PARTICULARIZED FACTS DELAWARE LAW PRESUMPTION CHANCELLOR |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
IN RE THE STUDENT LOAN CORP. : CONSOLIDATED
DERIVATIVE LITIGATION C.A. No. 17799-NC _
.:
REPLY BRIEF IN SUPPORT OF THE MOTION TO DISMISS
OF CITIGROUP INC., THE STUDENT LOAN
CORPORATION, AND THE INDIVIDUAL DEFENDANTS
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899-0636
(302) 651-3000
Attorneys for Defendant Citigroup Inc.
MORRIS NICHOLS ARSHT
& TUNNELL
1201 North Market Street
P.O. Box 1347
Wilmington, Delaware 19899-1347
(302) 658-9200
Attorneys for Defendant
The Student Loan Corporation and the
Individual Defendants
DATED: December 21,200l
TABLE OF CONTENTS
TABLE OF CASES AND AUTHORITIES . . . . . . . . i
PRELIMINARY STATEMENT .
SNIPPETS:
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3
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PLAINTIFFS ANSWERING BRIEF IN OPPOSITION TO DEFENDANTS MOTION TO DISMISS THE COMPLAINT
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EXTRACTED KEY WORDS
DEFENDANTS FACTS DEL STUDENT LOAN DEMAND DUTY DELAWARE BECKMAN CITIGROUP YORK CITICORP COMPLAINT ALLEGES PLAINTIFF GALLANT DIRECTORS SHAREHOLDER TRANSACTIONS WILKINSON BUSINESS JUDGMENT CONTROLLING SHAREHOLDER FISHER LLP BILL BECKMAN EMPLOYMENT SUBSIDIARIES COMPENSATION DELAWARE LAW RESERVE REQUIREMENTS HARNES KELLER GARWIN BRONZAFT GERSTEIN |
ORIGINAL
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
----------------------------------------------------------x
IN RE THE STUDENT LOAN CORP. : CONSOLIDATED
DERIVATIVE LITIGATION : C.A. NO. 17799 NC
----------------------------------------------------------x
PLAINTIFFS' ANSWERING BRIEF
IN OPPOSITION TO THE DEFENDANTS'
MOTION TO DISMISS THE COMPLAINT
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
Norman M. Monhait, Esquire
Carmella P. Keener, Esquire
Mellon Bank Center
Suite 1401
P.O. Box 1070
Wilmington, DE 19899
(302) 656-4433
Delaware Liaison Counsel for
Of Counsel:
HARNES KELLER LLC
964 Third Avenue
7'h Floor
New York, NY 10022
(212) 755-0022
GARWIN BRONZAFT GERSTEIN
& FISHER LLP
Suite 1416, 1501 Broadway
New York, NY 10036
(212) 398-0055
Dated: December 3,200l
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4
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OPENING BRIEF IN SUPPORT OF MOTION TO DISMISS
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EXTRACTED KEY WORDS
LOAN FACTS COURT CITIGROUP PLAINTIFF MOTION DIRECTORS DEL DISMISS SUPPORT INDIVIDUAL DEFENDANTS DEMAND ALLEGATIONS COMPLAINT DELAWARE BUSINESS JUDGMENT LITIGATION SHAREHOLDER CHALLENGED BUSINESS INDEPENDENCE DISINTEREST AUTHORITIES CONCLUSORY DERIVATIVE ACTION CHALLENGED TRANSACTION PLEADING STANDARD PARTICULARITY SALLIE MAE NATURE |
IN THE COURT 0 F CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
IN RE THE STUDENT LOAN CORP. :
DERIVATIVE LITIGATION
OPENING BRIEF IN SUPPORT OF THE MOTION
TO DISMISS OF CITIGROUP INC., THE STUDENT
LOAN CORPORATION, AND THE INDIVIDUAL DEFENDANTS
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899
(302) 651-3000
Attorneys for Citigroup Inc.
MORRIS NICHOLS ARSHT
& TUNNELL
1201 North Market Street
P.O. Box 1347
Wilmington, Delaware 19899-1347
(302) 658-9200
Attorneys for Defendant
The Student Loan Corporation
DATED: July 26,200l
TABLE OF CONTENTS
TABLE OF CASES AND AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
NATURE AND STAGE OF THE PROCEEDINGS . . . . . . " . . . . . . . . . . . . . . . . . . . . 1
SNIPPETS:
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5
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STOCKHOLDERS DERIVATIVE COMPLAINT
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EXTRACTED KEY WORDS
CITIGROUP DEFENDANTS CONTROLLING SHAREHOLDER UNFAIR SELF-DEALING SELF-DEALING TRANSACTIONS DIRECTORS COSTS EXPENSE PLAINTIFF YORK ACT OFFICERS CNYS CITIBANK STOCKHOLDERS COMPLAINT SECURITIZATION SUBSIDIARIES LOAN PORTFOLIO COMPENSATION WILLIAMSON CAPITAL RESERVE REQUIREMENTS RESERVE REQUIREMENTS MINORITY SHAREHOLDERS OUTSTANDING ATTORNEYS INCUR EXCESSIVE COSTS SERVICING BORROWINGS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
X
ALAN KAHN, derivatively on behalf Civil Action No. \ 7 773 lJc
of nominal defendant The Student Loan Corp.,
Plaintiff,
- against -
CITIGROUP, INC., CITIBANK (NEW
YORK STATE), CITIBANK, N.A.,
BILL BECKMANN, PETER M. GALLANT, :
GLENDA B. GLOVER, EVELYN E. HANDLER, :
CARL E. LEVINSON and LAURA D.
WILLIAMSON,
Defendants
- and -
THE STUDENT LOAN CORP.,
Nominal Defendant :
STOCKHOLDERS' DERIVATIVE COMPLAINT
Plaintiff, by his attorneys, alleges upon personal knowledge as to himself and his own acts
and upon information and belief as to all other matters as follows:
NATURE OF THE ACTION
1. This is a stockholder derivative complaint brought on behalf of Student Loan
Corporation ("Student Loan" or the "Company"), against certain Company officers and directors and
Citigroup, Inc. ("Citigroup"), the 80%) controlling shareholder of the Company, arising out of the
pervasive unfair self-dealing transactions between the Company and its controlling shareholder. As
a result of such self-dealing, the Company's financial performance has been far less than what it
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