IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
AMERICAN GENERAL CORPORATION, t
et al. (Plaintiffs in C.A. No. t
8390), MORRIS KRONFELD (Plain- l
tiff in C.A. No. 8406), MUTUAL l
SHARES CORP. (Plaintiff in C.A. t
NO. 86501, and JAMES J. BALTZ, l
et al., (Plaintiffs in C.A. No. l
8805), l Cfvi I Act ion Nos. 8390, c ".-.--.-
+
Plaintiffs, l 8406, 8650 and 8805 .
1 '.
l
v.
>
TEXAS AIR CORPORATION, et al., +l
Defendants. FE8 1 ;.: i-ë-:7
l
MEMORANDUM OPINION <' I
Submitted: January 30, 1987
Decided: February 5, 1987
ON PLAINTIFFS' APPLICATION FOR A PRELIMINARY INJUNCTION: DENIED
Joseph A. Rosenthal, Esquire, and Carolyn 0. Mack, Esquire,
MORRIS 6 ROSENTRAL, Wilmington, DE, and TENZER, GREENBLATT,
FALLON h RAPLAN, New York, NY, Attorneys for Plaintiffs
Mutual Shares Corp, James J. Baltr, and Gregor Ii. Russer
Joseph A. Rosenthal, Esquire, and Carolyn 0. Mack, Esquire,
MORRIS L ROSENTHAL, Wilmington, DE, and Harvey Greenfield,
Esquire, of New York, NY, fo r Plaintiff Morris Kronfeld
E. Norman Veasey, Esquire, and Jesse A. Finkelstein, Esquire,
RICHARDS, LAYTON & FINGER, Wilmington, DE, and William W.
Bowser,, Esquire, and VINSON 6 ELKINS, Houston, TX, Attorneys
for Plaintiff America n General Corporation
Paul P. Welsh, Esquire, and Palmer L. Whisenant, Esquire, MORRIS,
NICBOLS, ARSHT L TONNELL, Wilmington, DE, Attorneys for
DefendaLnt Texas Air Corporation
Bruce M. Stargatt, Esquire, Josy W. Ingersoll, Esquire, and
Bruce L. Silverstein. Esquire, YOUNG, CONAWAY, STARGATT L
SNIPPETS:
t et al. (Plaintiffs in C.A.
MORRIS KRONFELD (Plain- l tiff in C.A.
No. 8406), MUTUAL l SHARES CORP. (Plaintiff in C.A. t NO. 86501, and JAMES J. BALTZ, l et
TEXAS AIR CORPORATION, et al., +l
Joseph A. Rosenthal, Esquire, and Carolyn 0.
Mack, Esquire, MORRIS 6 ROSENTRAL, Wilmington, DE, and TENZER, GREENBLATT, FALLON h RAPLAN,
Four separate suits were,filed challenging a proposed going private merger whereby Texas Air
All the plaintiffs seek a preliminary injunction enjoining the consummation of the merger
I find that, although the challenged transaction, when viewed as a whole, leaves a great deal
It owns all the common stock of Easte:rn Air Lines, Inc., Peoples Express, Inc., and New York
Texas Air also owns approximately 72% of the common stock of defendant Continental Airlines
These programs resulted in a substantial ownership of Continental by its employees.
In July of 1985, while Continental was still in bankruptcy, Texas Air first proposed a going
1985 the Board of Continental appointed a Special Committee consisting of the two outside
It has been alleged by the plaintiffs that Continental, * rather than Texas Air, should have
If the going private merger now before the Court is not enjoined, however, this p.roposal of
They also point out that the earltier proposals over a 10 month period were to be structured
American General therefore claims that Texas Air has structured thee cash out merger to deny
Initially it should be noted that the burden of persuasion is upon the plaintiffs to
In order to obtain a preliminary injunction plaintiffs, therefore/ must sholw a reasonable
UOP, Inci, Del.
Bear-Stearns, one of the Special Committee's financial advisors, gave an opinion that the
This is so even if there is a showing of unfair dealing because unfair dealing generally
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