IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
BENCHMARK CAPITAL
PARTNERS IV, L.P.,
Plaintiff,
.
V. .. C.A. No. 19719
RICHARD VAGUE, JAMES STEWART, :
JOHN TOLLESON, DAVID MARSHALL, :
JOHN ORR, CHRISTINE CROUCHER, :
MOYA GREENE, RICHARD VENN, :
CHRISTOPHER GREENE, JUNIPER :
FINANCIAL CORP., CIBC DELAWARE :
HOLDINGS, INC. and CANADIAN :
IMPERIAL BANK OF COMMERCE, :.
Defendants. .
MEMORANDUM OPINION
Date Submitted: July 11, 2002
Date Decided: July 15, 2002
Kevin G. Abrams, Esquire, Srinivas M. Raju, Esquire, Peter B. Ladig,
Esquire, Lisa R. Stark, Esquire, Kelly A. Green, Esquire, and John D.
Hendershot, Esquire, of RICHARDS, LAYTON & FINGER, P.A.,
Wilmington, Delaware, Attorneys for Plaintiff.
Kenneth J. Nachbar, Esquire, William M. Lafferty, Esquire, David J. Teklits,
Esquire, and Thomas W. Briggs, Jr., Esquire, of MORRIS, NICHOLS,
ARSHT & TUNNELL, Wilmington, Delaware, Attorneys for Defendant
Juniper Financial Corp.
David C. McBride, Esquire, of YOUNG CONAWAY STARGATT 6:
TAYLOR LLP, Wilmington, Delaware, Attorney for Defendants CIBC
Delaware Holdings, Inc. and Canadian Imperial Bank of Commerce.
NOBLE, Vice Chancellor
SNIPPETS:
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
Plaintiff,
FINANCIAL CORP., CIBC DELAWARE:
David C. McBride, Esquire, of YOUNG CONAWAY STARGATT 6: TAYLOR LLP, Wilmington, Delaware,
have negotiated protective provisions in a corporate charter to define the
balance of power or certain economic rights as between the holders of junior
preferred stock and senior preferred stock.
to play when additional financing becomes necessary.
the rights of the other side.
In this case, Plaintiff Benchmark Capital Partners IV, L.P.
invested in the first two series of the Defendant Juniper
Benchmark's holdings were relegated to the status of junior preferred stock
Incorporation (the "Certificate") contains several provisions to protect the
The Certificate grants the junior preferred stockholders a series vote on
the junior preferred stockholders are entitled to a class vote before
however, exercise this power "if such amendment, waiver or modification
waived by a majority vote of a class consisting of the holders of the Series A, Series B and
When it recognized that the protective provisions of the Certificate could be
transaction that now consists principally of a merger and a sale of Series D
Preferred Stock remain outstanding, the Corporation shall not, without the vote or written
d Stock or Series B Preferred Stock as to dividend rights or redemption rights, voting rights or
Stock Purchase Agreement"" and the "Agreement and Plan of Merger.
Benchmark, however, does challenge the authority and the performance of the special
I note in passing that the record before me does not allow application of the principle that
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