IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
IN RE PURE RESOURCES, INC. ) CONSOLIDATED
SHAREHOLDERS LITIGATION ) C.A. No. 19876
OPINION
Date Submitted: September 27,2002
Date Revised: October 7,2002
Bruce L. Silverstein, Esquire, Josy Ingersoll, Esquire, Martin S. Lessner,
Esquire, John W. Shaw, Esquire, YOUNG CONAWAY STARGATT &
TAYLOR, LLP, Wilmington, Delaware; R. Bruce McNew, Esquire,
TAYLOR & McNEW LLP, Greenville, Delaware, Attorneys for PZaintzz
Kenneth J. Nachbar, Esquire, Jon E. Abramczyk, Esquire, Brian J. McTear,
Esquire, MORRIS, NICHOLS, ARSHT & TUNNELL, Wilmington,
Delaware; Michael W. Schwartz, Esquire, George T. Conway III, Esquire,
WACHTELL, LIPTON, ROSEN & KATZ, New York, New York,
Attorneys for the Unocal Defendants.
Robert K. Payson, Esquire, Donald J. Wolfe, Jr., Esquire, Peter J. Walsh, Jr.,
Esquire, Kevin R. Shannon, Esquire, Brian C. Ralston, Esquire, Richard L.
Renck, Esquire, POTTER ANDERSON & CORROON LLP, Wilmington,
Delaware; James Edward Maloney, Esquire, Michael C. Massengale,
Esquire, BAKER BOTTS L.L.P., Houston, Texas, Attorneys for the SpeciaZ
Committee Defendants.
Jesse A. Finkelstein, Esquire, Catherine G. Dear-love, Esquire, Richard P.
Rollo, Esquire, RICHARDS, LAYTON & FINGER, P.A., Wilmington,
Delaware; Timothy R. McCormick, Esquire, William L. Banowsky, Esquire,
THOMPSON & KNIGHT, LLP, Dallas, Texas, Attorneys for the Pure
Resources Defendants.
STRINE, Vice Chancellor
This is the court's decision on a motion for preliminary injunction.
The lead plaintiff in the case holds a large block of stock in Pure Resources,
Inc., 65% of the shares of which are owned by Unocal Corporation. The lead
SNIPPETS:
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
Kenneth J. Nachbar, Esquire, Jon E. Abramczyk, Esquire, Brian J. McTear, Esquire, MORRIS,
The lead plaintiff in the case holds a large block of stock in Pure Resources,
65% of the shares of which are owned by Unocal Corporation.
The plaintiffs believe that the Offer is inadequate and is subject to
for Pure stockholders to make an informed decision whether to tender into
that is accompanied by complete disclosure of all material facts.
' 638 A.2d 1110 (Del.
Lynch standard are implicated by tender offers initiated by controlling
which have as their goal the acquisition of the rest of the
independent directors of the target board.
For the pk-poses of this opinion, my references to tender offers by controlling stockholders
and outstanding common stock.
Another protection Unocal secured in the combination was a Non-Dilution Agreement.
members of Pure's management team entered into "Put
Agreements" with Unocal at the time of the combination.
triggering event is a transaction in which Unocal obtains 85% of Pure's
Unocal is not seeking, and as the offer is being made directly to Pure's stockholders,
instructed to suggest that any Special Committee formed by Pure should
to coming up with a recommendation to the Pure shareholders as to whether
A non-waivable majority of the minority tender provision, which required a majority of shares
In other cases, of course, this court has explicitly drawn negative inferences when a board
by way of an exchange offer and not a negotiated merger,
mergers between controlling stockholders and subsidiaries.
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