In circumstances involving the sale of a corporation having an 80% shareholder, the Delaware Supreme Court recently ruled that a lower court improperly dismissed a case against the corporation's directors for allegedly failing to obtain full value for minority shareholders.
In McMullin v. Beran, 2000 WL 1741717 (Del. Supr. Nov. 20, 2000), a minority shareholder of ARCO Chemical Company (Chemical) claimed that Chemical's directors improperly delegated to the majority shareholder, Atlantic Richfield Company (ARCO), the responsibility for negotiating Chemical's sale. The suit alleged that by failing to put in place certain procedural safeguards - such as asking the ARCO-related directors to recuse themselves - the Chemical directors did not adequately protect the interests of the minority shareholders. The Delaware Supreme Court found that the lower court improperly dismissed the complaint because the plaintiff had alleged facts that, if true, would rebut the "business judgment rule"
