Ed. Note: For the Year in Review issues we give our
Directors & Boards "Legal Brief" columnist
Doug Raymond the "if you could pick just one" challenge.
That is, we ask him to highlight a court ruling from the past year
that he feels is of particular consequence to a board's
decision-making considerations and fiduciary obligations. The case
he selected is In re CNX Gas Corporation Shareholders
Litigation, a decision rendered on May 25, 2010, in the
Delaware Court of Chancery that highlights the position of minority
stockholders in a freeze-out transaction.
Directors of a company with a controlling
shareholder and directors of a company that is a controlling
shareholder should know that they have essentially two different
ways to freeze out minority shareholders of a Delaware company and
take a target company private: (i) a negotiated merger between the
controlling stockholder and target company in which the target
merges with an entity wholly-owned by the controller,
