a). Taint the Vote:
In the case In re Topps Co. Shareholders Litigation, 926 A.2d 58 (Del.Ch. 2007) the Court granted the motion for a preliminary injunction was granted.
The stockholders contended that the Merger vote was tainted by Topps's failure to disclose material facts about the process that led to the Merger Agreement and about Topps's subsequent dealings with Upper Deck.
The stockholders also argued that Topps denied them the chance to decide which bid to accept.
b). Board and Management Opposition:
Some of the Directors for Topps opposed the Eisner Merger because of their issues with the way it was negotiated. They contended that they were not given an opportunity to review or comment on the company's disclosures about it, including the undisputed facts that were not in the proxy statement.
Basically, the board and management would be opposed to any change in ownership because change means cuts. If Upper Deck's offer were accepted it did not stipulate what changes would be incumbent in the takeover. Upper Deck could have completely replaced management and the board with its own people.
Further, there was concern about how Topps would be run. The incumbent directors wanted to help Shorin preserve his influence over the business that his family started through his son-in-law Silverstein. It is highly likely that Upper Deck has its own plans for the future of the company.
Additionally, a change in ownership could negatively impact the share value and the reputation of the business. In this case a proper market valuation was not performed, so the value of the shares could have been different than the offer.
In the case Scott v. Trans-System,, Inc. , 148 Wash.2d 701, 64 P.3d 1 (2003) the court awarded double damages to Scott for back wages and attorney fees. The Court of Appeals affirmed the dissolution.
The court gave Scott and TSI the opportunity to create a mutually agreeable settlement in order to avoid the judicial dissolution of Northwestern. After the parties were unable to reach an agreement, the trial court determined the requirements of RCW 23B.14.300(2)(b) and (d) had been met.
The court determined that Northwestern should be dissolved because the directors of Northwestern and TSI had acted in an oppressive manner and misapplied or wasted corporate assets.
Among the inappropriate activities perpetrated by TSI include TSI's decision to borrow against Northwestern's line of credit while requiring Northwestern to fund the interest payments, as well as the the four inequitable equipment lease agreements.
Therefore, the court was within its authority to grant the dissolution of Northwestern as appropriate relief.
In the case Stumpff v. Harris, ___N.E.2d ___, 2d Dist. Montgomery No. 21407, 2006-Ohio-4796 the court issued a judgment that included an order to dissolve Mahaffey's. The state intermediate appellate court upheld the lower court's order.
The court stated that the decision to order the judicial dissolution of Mahaffey's, Inc., required that Harris and Stumpff were deadlocked in the management of the corporate affairs.
Harris requested that the corporation be dissolved, while Stumpff opposed the dissolution. Moreover Harris and Stumpff were unable to work together as was evidenced by the firing and unilateral withdraw of funds.
Therefore, the court did not err when it ordered judicial dissolution of Mahaffey's pursuant to R.C. 1701.91(D).