Se. Pa. Transp. Auth. v. Volgenau

Plaintiff Southeastern Pennsylvania Transportation Authority (SEPTA), a former stockholder of Defendant SRA International, Inc. (SRA), challenged the merger of SRA and affiliates of Defendant Providence Equity Partners LLC. SRA and several members of its board of directors (Individual Defendants) before the merger moved for judgment on the pleadings on Count IV of the complaint, which alleged that the merger was invalid and that by approving the invalid merger, the Individual Defendants breached their fiduciary duty of loyalty to the public stockholders of SRA. The Court of Chancery held (1) SEPTA's claim that the merger was invalid failed as a matter of law, as the merger was effectively deemed valid; but (2) at this stage, the Individual SRA Defendants were not entitled to judgment on SEPTA's claim that they breached their fiduciary duties, as the conduct of the fiduciaries who approved the merger may still be challenged on the basis that it was carried out in violation of SRA's certificate of incorporation. View "Se. Pa. Transp. Auth. v. Volgenau" on Justia Law