Pleading that the NetSuite defendants’ fiduciary duties to NetSuite and its stockholders required that they cause NetSuite to disclose certain information, and.The lead plaintiff alleged that such disclosures would have put Oracle’s directors on alert to the allegedly lopsided transaction terms, and would have led Oracle to scuttle the deal.įor this claim to succeed, the Delaware Court of Chancery said this required: That is, the disclosures required of the NetSuite defendants to NetSuite’s stockholders would, if made, result in disclosure to the public, which would in turn result in disclosure to Oracle’s special committee. The lead plaintiff posited that the NetSuite defendants breached those duties in aid of the secrecy necessary to further the Oracle defendants’ corrupt scheme. To that end, the lead plaintiff pointed out that the NetSuite defendants owed fiduciary duties to make disclosures to NetSuite stockholders about the acquisition of NetSuite. Here the lead plaintiff claimed the NetSuite defendants undertook action to provide substantial aid to two Oracle defendants breach of their own duties to Oracle-the alleged substantial aid was silence on the history of key transactional negotiations. To bring an action for aiding and abetting a breach of fiduciary duty to Oracle stockholders, the plaintiff must plead among other things that the NetSuite defendants knowingly participated in that breach by Oracle fiduciaries that remained as defendants.Īmong other things, absent a fiduciary or contractual relationship, Delaware law generally does not impose a duty to speak. This case related to Oracle’s acquisition of NetSuite. But what if the breach of duty relates only to the buyer paying the seller too much? It is an odd case, since the target fiduciaries have a duty to maximize price. Theoretically yes, almost anything is possible. Derivative Litigation considered whether a fiduciary for an acquired entity can aid and abet breaches of duty by a fiduciary for the buyer.
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