IN THE COVRT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
In re Dataproducts Corporation ) Civil Action No. 11164
Shareholders Litigation 1
MEMORANDUM OPINION
Date Submitted: January 17, 1991
pate Decided: August 22, 1991
Pamela S. Tikellis, and Carolyn D. Mack, Esquires, of
GREENFIELD & CHIMICLES, Wilmington, Delaware; Joseph A.
Rosenthal, Esquire, of MORRIS, ROSENTHAL, MONHAIT, & GROSS,
P.A., Wilmington, Delaware; Delaware Co-Liaison Counsel for
Plaintiffs.
Kenneth J. Nachbar, Esquire, of MORRIS, NICHOLS, ARSHT &
TUNNELL; Attorneys for the Individual Director Defendants and
Dataproducts Corporation.
Charles S. Crompton, Jr., Donald J. Wolfe, Jr., and Arthur
Dent, Esquires, of POTTER, ANDERSON & CORROON, Wilmington,
Delaware; John H. Hall, Esquire, of DEBEVOISE & PLIMPTON, New
York, New York; Attorneys for Defendants Hitachi Koki co.,
Ltd., Nissei Sangyo Co., Ltd., and HND Corporation.
JACOBS, Vice Chancdlor
In this consolidated class action, former shareholders of
Dataproducts Corporation (nDataproducts*l) challenge the merger of
Dataproducts with a subsidiary of Hitachi Koki Co., Ltd. and Nissei
Sangyo, Ltd. (collectively "Hitachi"), on May 21, 1990. Beginning
on October 17, 1989, several complaints were fil,ed challenging the
Dataproducts' directors' opposition to a hostile takeover bid by
DPC Acquisition Partners ("DPC Partners"). As part of its takeover
strategy DPC Partners also filed an action against Dataproducts.
Dataproducts counterclaimed in that action, and sought a pre-
SNIPPETS:
IN THE COVRT OF CHANCERY OF THE STATE OF DELAWARE
Rosenthal, Esquire, of MORRIS, ROSENTHAL, MONHAIT, & GROSS, P.A., Wilmington, Delaware;
Kenneth J. Nachbar, Esquire, of MORRIS, NICHOLS, ARSHT & TUNNELL; Attorneys for the
Dataproducts with a subsidiary of Hitachi Koki Co., Ltd. and Nissei Sangyo, Ltd., on May 21,
Beginning on October 17, 1989, several complaints were fil,ed challenging the Dataproducts'
and sought a preliminary injunction to prevent DPC Partners from proceeding with its tender
On April 16, 1990, two of the earlier-filed shareholder actions were amended to challenge
thereafter the plaintiffs filed a second amended complaint.
On August 10, 1990, the eight then-pending shareholder actions were consolidated and the
Dataproducts is also accused of promulgating those misleading disclosures, and Hitachi is
The Facts' Dataproducts is a Delaware corporation engaged principally in manufacturing
In December, 1988, an investor group known as DPC Partners informed Dataproducts management
Included among these documents are the Schedule 14D-9 and an amendment thereto, that were
Those documents -- Dataproducts' certificate of incorporation and the Hitachi Offer to
On March 16, 1989, Goldman Sachs furnished confidential information to several potential
After evaluating that information, DPC Partners made a series of acquisition proposals to
On March 29, 1990, Hitachi informed Dataproducts representatives that it was prepared to make
The contemplated transaction would involve Hitachi making a tender offer for Dataproducts'
Those offering materials disclosed, among other things, that Dataproducts' earnings
As narrowed, the plaintiffs' claims may fairly be described as falling into three categories:
.The defendants contend that none of these claims is actionable because they are directed
The third category consists of the plaintiffs' claim that Dataproducts itself is
Earlier disclosure of that information, it is said, would have caused Dataproducts' stock
§102, provided that:: A Director of this corporation shall not be personally liable to the
of the Delaware General Corporation Law, or for any transaction from which the Director derived an
The plaintiffs contend that the directors' abdication of their oversight obligations in favor
The plaintiffs next contend that the Schedule 14D-9 was materially misleading because it
|
