Court of Chancery Finds Breach of Fiduciary Duty in Private Company Recapitalization

Court of Chancery Finds Breach of Fiduciary Duty in Private Company Recapitalization

In an opinion issued on September 4, 2014, In re Nine Systems Corp. Shareholders Litigation, the Delaware Court of Chancery held that a control group of stockholders and their director designees breached their fiduciary duties in approving a recapitalization of Nine Systems Corporation because the recapitalization was the result of an unfair process, even though it was accomplished at a fair price. Click here to download Morris Nichols’ analysis of the decision.