Delaware Update: The Implied Standstill

On May 4, 2012, Chancellor Leo E. Strine, Jr. of the Delaware Court of Chancery issued a decision that put the spotlight on confidentiality agreement provisions limiting the use and disclosure of non-public information. Martin Marietta Materials, Inc. v. Vulcan Materials Co., C.A. No. 7102-CS (Del. Ch. May 4, 2012). Finding that Martin Marietta Materials breached its confidentiality agreement with Vulcan Materials when it commenced a hostile bid for Vulcan in December 2011 by using protected information in putting together its offer and disclosing such information when it was not entitled to, Chancellor Strine enjoined Martin Marietta from pursuing its bid and proxy contest for four months.