Sox Appeal: Is The Delaware Judiciary Heightening Its Standards For Director Independence and Good Faith?
Over the past year, the Delaware Supreme Court and Court of Chancery have issued decisions that are, in certain respects, critical of the conduct of corporate directors. This summary of recent corporate developments helps lay the foundation to query whether these decisions can be seen as the Delaware judiciary's attempt to heighten corporate governance in response to the Sarbanes-Oxley Act and the new era of increased scrutiny for corporate actions. Specifically, the following decisions comment, among other things, upon the independence of directors and the importance of good faith in directors' actions. Instead of providing a litmus test for the standards that govern independence and good faith, however, these cases emphasize that questions of independence and good faith of director actions are driven by the unique facts underlying each case and the context in which the question is posed.
First, in In re Oracle Corp. Derivative Litigation, Vice Chancellor Strine declined to accept the recommendation of Oracle's special litigation committee that litigation alleging insider trading by certain directors should be dismissed because the Court held that non-monetary ties between the SLC and the directors whose conduct was at issue raised a reasonable doubt as to the SLC's ability to impartially consider whether the action should be dismissed. Next, in Beam v. Stewart, although Chancellor Chandler found that a majority of the directors were independent for purposes of evaluating a stockholder's demand that a company bring an action against its founder, the Court took the opportunity to expound upon Vice Chancellor Strine's idea that personal ties, such as friendships, are capable of affecting a director's ability to act independently. Then, in In re eBay, Inc. Shareholders Litigation, Chancellor Chandler returned to the more traditional notion of a material financial connection as affecting director independence, but interestingly applied the concept of a material financial connection to include consideration of the effect the non-employee director's options to purchase shares.
With respect to the concept of good faith, in In Re Walt Disney Company Derivative Litigation, Chancellor Chandler found that the facts as alleged created a claim that the directors' actions (or lack of action as it were) were not taken in good faith, thus obviating the company's Section 102(b)(7) exculpatory provision. Notably, the Chancellor found that the complaint alleged facts that, if proven, would justify a finding of a lack of good faith even though none of the directors had any material connection, financial or otherwise, to the conduct at issue. The import of good faith in the corporate context thus having been reestablished, the Delaware Supreme Court then issued an order in Emerald Partners v. Berlin that, while quoting language from Chancellor Chandler regarding good faith, went on to hold that the Court never had to reach the arguably viable claims that certain directors lacked good faith in merger negotiations because the plaintiff shareholder had failed in the first instance to establish an unfair merger price.
A. In Re Oracle Corp. Derivative Litigation
In this action, shareholders of Oracle Corporation challenged the sale of Oracle stock by certain Oracle directors (the "Trading Defendants") who, according to plaintiffs, were in possession of material, non-public information showing that Oracle would not meet its earnings expectations for the third quarter of Oracle's fiscal year 2001. On that basis, plaintiffs asserted breach of fiduciary duty claims against the Trading Defendants. After the filing of the complaint, Oracle appointed a special litigation committee ("SLC") consisting of two purportedly independent directors, Hector Garcia-Molina and Joseph Grundfest, to investigate the Trading Defendants' activities.
The SLC undertook an extensive investigation of the allegations. The committee engaged independent financial and legal advisors, reviewed a vast amount of paper and electronic records, had its counsel interview seventy witnesses, and met with its counsel for a total of eighty hours to discuss the allegations. The SLC then prepared a 1,110 page report concluding that the Trading Defendants had not breached their fiduciary duty because "even a hypothetical Oracle executive who possessed all information regarding the company's performance in … 3Q FY 2001 would not have possessed material, non-public information that the company would fail to meet the earnings and revenue guidance it provided the market in December." Moreover, the Trading Defendants only sold between two and seventeen percent of their extensive holdings of Oracle shares. Having found no breach of duty by the Trading Defendants, the SLC accordingly moved to terminate the litigation.
In order to terminate the litigation, the SLC was required to demonstrate that its members: (1) were independent; (2) acted in good faith; and (3) had a reasonable basis for their recommendation. The SLC attempted to demonstrate its independence by noting that neither member received compensation from Oracle other than as directors, neither were on the board at the time of the alleged improper trading, both members were willing to return any compensation received as a result of their work on the SLC if such compensation should be deemed to affect their independence, and there was an absence of any material ties between the members of the SLC, the Trading Defendants and Oracle. The Court, however, found that the SLC had not met its burden of demonstrating the absence of a material factual question about its independence because of a series of ties and relationships among Stanford University, Oracle and the Trading Defendants.
Both Garcia-Molina and Grundfest are professors at Stanford University. The SLC's report disclosed that one of the defendants also was a professor at Stanford and that one defendant had made donations to the University. After discovery, however, other "shocking" connections between the Trading Defendants and Stanford were revealed, such as the fact that at least two of the Trading Defendants had been generous contributors to Stanford. Thus, according to the Court, "[s]ummarized fairly, two Stanford professors were recruited to the Oracle board in summer 2001 and soon asked to investigate a fellow professor and two benefactors of the University." The Court noted that, as a result of being tenured professors, "neither of the SLC members is compromised by a fear that support for the procession of this suit would endanger his ability to make a nice living." Nonetheless, applying a "subjective" actual person standard, the Court explained that with their ties to Stanford, the members of the SLC were simply not situated to act with the required degree of impartiality. Indeed, "these connections generate a reasonable doubt about the SLC's impartiality because they suggest that material considerations other than the best interests of Oracle could have influenced the SLC's inquiry and judgments."
The SLC argued that none of these ties to Stanford indicate that the committee was dominated or controlled by the Trading Defendants. Moreover, there were no economically material ties between the SLC and the Trading Defendants. The Court, however, rejected the idea that "domination and control" is the appropriate test for independence. Vice Chancellor Strine did acknowledge that "much of our law focuses the bias inquiry on whether there are economically material ties between the interested party and the director whose impartiality is questioned, treating the possible effect on one's personal wealth as the key to the independence inquiry." Despite such precedents, the Court further explained that:
- Delaware law should not be based on a reductionist view of human nature that simplifies human motivations on the lines of the least sophisticated notions of the law and economics movement. Homo sapiens is not merely homo economicus. We may be thankful that an array of other motivations exist that influence human behavior; not all are any better than greed or avarice, think of envy, to name just one. But also think of motives like love, friendship, and collegiality, think of those among us who direct their behavior as best they can on a guiding creed or set of moral values.
As such, "a director may be compromised if he is beholden to an interested person. Beholden in this sense does not mean just owing in the financial sense, it can also flow out of 'personal or other relationships' to the interested party."
In discussing how these ties to Stanford might affect the SLC's independence, the Court noted that it "necessarily measure[s] the SLC's independence contextually." As such, "the Delaware approach undoubtedly results in some level of indeterminacy, but with the compensating benefit that independence determinations are tailored to the precise situation at issue." This case sends a clear signal that the Court will closely scrutinize relationships between special committee members and the directors whose conduct they may be called upon to review, at least in the SLC context. As such, if at all possible, it is wise in the appointment of special committees to select directors who possess virtually no ties to other board members and thus are of unquestionable independence.
B. Beam v. Stewart 
A stockholder brought this derivative action against current and former directors of Martha Stewart Living Omnimedia, Inc. ("MSO"), including Martha Stewart. Stewart is the founder, Chairman of the Board, CEO and by far the largest stock holder of MSO, controlling roughly 94.4% of the shareholder vote. The complaint sought relief with respect to: (i) Stewart's much-publicized and allegedly improper trading of shares of ImClone Systems, Inc. ("ImClone"); (ii) the private sale of MSO shares by Stewart and John Doerr, a former director of MSO; and (iii) a board decision concerning the provision of "split-dollar" insurance for Stewart. Defendants moved to dismiss the amended Complaint on several grounds, including failure to comply with the demand requirement under Court of Chancery Rule 23.1.
Stewart and Samuel Waskal, the former CEO of ImClone, were personal friends who exchanged investment advice with one another. As was later the subject of a criminal charge, allegedly after Waskal informed Stewart that ImClone had failed to receive FDA approval for a drug that was essential to its business, Stewart sold her shares in order to avoid potential loss. The charges against Stewart were the subject of much negative publicity. MSO's stock price declined by more than 65% after two months. As the success of MSO is directly linked to Stewart's public image, Plaintiff alleged that defendants breached their fiduciary duties by failing to ensure that Stewart would not conduct her personal financial affairs in such a way as to harm MSO. The Court, however, held that these allegations failed to state a claim because it would be "patently unreasonable" to expect the Board to monitor Stewart's personal affairs.
Plaintiff also failed to adequately allege that Stewart and Doerr breached their fiduciary duty of loyalty by usurping a corporate opportunity in selling large blocks of MSO stock. Specifically, the sale of stock by Stewart and Doerr was not within MSO's line of business, nor could MSO reasonably have an interest or expectancy in the stock sales, and the sales did not place Stewart and Doerr in a position inimical to their duties to the Company. The Court also rejected plaintiff's claim challenging the "split-dollar" insurance program because plaintiff conceded that the board was actively considering whether this program violated certain provisions of the Sarbanes-Oxley Act, and thus could not conclude (as required to state a claim) that the Board knew it was violative of the law and took no step to prevent or remedy the situation.
Furthermore, the Court dismissed the complaint for plaintiff's failure adequately to plead demand futility as required by Court of Chancery Rule 23.1. In this respect, the Court found that while plaintiff proffered various theories as to why the outside directors might be swayed by Stewart's wishes or interests, sufficient facts had not been pled to reasonably sustain such theories.
For purposes of demand futility, Stewart clearly could not be disinterested in allegations that potentially threatened both civil and criminal actions against herself. As such, the Court turned to examine whether a majority of the rest of the board would be "able to consider and appropriately respond to a demand 'free of personal financial interest and improper extraneous influences.'" In making its determination that demand would not have been futile, the Court offered insight into the personal ties that could affect the independence of directors for purposes of their ability to impartially and objectively consider a demand request, thus further highlighting the Court's contextual standard of independence.
The complaint described two directors, Arthur Martinez and Darla Moore, as having longstanding friendships with Stewart. Martinez had substantial business ties to MSO through his work at Sears. In addition, he was recruited to be a director by Stewart's confidante and personal friend and he himself had been described in a magazine article as an "old friend" to Stewart. None of these connections, however, were sufficient to raise a reasonable doubt as to Martinez's independence because his work as an executive and director of several public corporations meant that his "reputation for action as a careful fiduciary is essential to his career."
Similarly, the Court noted that Moore's concern for her professional reputation outweighed any conflict of interest she might have as a close personal friend of Stewart. The complaint alleged that Moore, Stewart and Waskal attended the same wedding reception, and noted a Fortune magazine article that described the close personal friendship between Moore and Stewart. Chancellor Chandler conceded that it was a "close call" as to whether Moore was independent and noted that "more detailed allegations about the closeness or nature of the friendship, details of the business and social interactions between the two, or allegations raising additional considerations" could have tipped the balance against finding her independent.
Importantly, the Court acknowledged that:
- some professional or personal friendships, which may border on or even exceed familial loyalty and closeness, may raise a reasonable doubt whether a director can appropriately consider demand. This is particularly true when the allegations raise serious questions of either civil or criminal liability of such a close friend. Not all friendships, or even most of them, rise to this level and the Court cannot make a reasonable inference that a particular friendship does so without specific factual allegations to support such a conclusion.
Thus, as discussed in Oracle, in addition to the traditional inquiry into a director's financial connections with the individuals whose conduct they are evaluating, the current trend of the Court appears to be more willing to consider whether non-financial ties, such as personal friendships, might unconsciously affect a director's ability to remain impartial with respect to a decision to sue a friend for damages for personal liability.
C. In re eBay, Inc. Shareholders Litigation 
In this consolidated derivative action, shareholders of eBay, Inc. filed suit against four eBay directors and officers alleging that they breached their duty of loyalty by usurping corporate opportunities. The "opportunities" at issue involved the allocation of shares of lucrative initial public offerings to the defendant directors and officers by eBay's investment advisor, Goldman Sachs Group. This practice, known as "spinning," allegedly acted as a form of bribery so that these insiders would continue to send eBay's business to Goldman Sachs. The individual defendants each reaped millions of dollars in profit when shares from the IPOs were resold on the open market. Plaintiffs alleged that Goldman Sachs should have offered these shares of IPOs to eBay and not directly to its directors and officers so that eBay would have had the opportunity to realize the millions in profit instead of just its directors and officers.
The individual defendants and Goldman Sachs (who were accused of aiding and abetting the eBay defendants' breach of their duty of loyalty) moved to dismiss the action for failure to state a claim or make pre-suit demand under Court of Chancery Rule 23.1. eBay's board of directors consisted of seven members. The three individual defendant directors who were alleged to have engaged in the "spinning" clearly were interested in the transactions at issue. Consequently, plaintiffs needed only to present facts that would give reason to doubt the independence of one of the other four directors.
While plaintiffs alleged that each of the other four directors had "close business and personal ties with the individual defendants," the Court focused instead on the allegation that the "huge financial benefits" the directors received as a result of their eBay directorships gave reason to question the directors' independence. eBay pays no cash compensation to its directors. Instead, the directors receive substantial stock options. For example, upon joining the board, one director, Mr. Cook, received 900,000 options to purchase eBay shares at $1.555. Of those options, 225,000 vested immediately and an additional 2% vest each month that Mr. Cook remains on the Board. In addition, non-employee directors receive an extra 30,000 options each year, some of which will never vest unless Cook remains a director. At the time the complaint was filed, eBay's stock was valued at $62.13, which meant that Mr. Cook's original option grant was worth millions of dollars. Furthermore, the unvested options - options that would never vest unless Mr. Cook remained a director - were possibly worth millions of dollars. The other three directors were similarly situated to Mr. Cook.
Plaintiffs alleged, and the Court agreed, that "the stock options granted to these directors, which are both vested and unvested, are so valuable that they create a financial incentive for these directors to retain their positions as directors and make them beholden to the defendant directors." Although the individual defendants and their affiliates own slightly less than one-half of eBay's outstanding common stock, the Court noted that the individual defendants, as officers, directors and large stockholders of eBay, "effectively have the ability to control eBay and to direct its affairs and business, including the election of directors and the approval of significant corporate transactions." Thus, the combination of substantial financial incentives for the directors to retain their positions and the ability of the defendants to remove them from office rendered otherwise outside, independent directors incapable of impartially evaluating a demand to talk action against the directors/controlling stockholders.
Good Faith: Directors Beware?
A. In Re Walt Disney Company Derivative Litigation 
This action involves the highly-publicized non-fault termination of the President of Walt Disney Company, Michael Ovitz, who, after only one year's worth of service, received a severance package allegedly worth over $140 million. While plaintiffs' original complaint challenging the employment and termination of Ovitz was dismissed, the Delaware Supreme Court allowed plaintiffs an opportunity to amend their complaint in order to adequately plead demand futility and avoid dismissal. After using the "tools at hand" to draft an amended complaint rich with unflattering details discovered during a books and records inspection, plaintiffs successfully withstood defendants' second motion to dismiss pursuant to Court of Chancery Rules 12(b)(6) and 23.1. In his decision, Chancellor Chandler made several remarks about the standard of good faith for directors.
The amended complaint alleged that the directors of Disney did not inform or involve themselves as to the details of Ovitz's employment agreement, and instead left this task to Ovitz's friend of over twenty-five years, Michael Eisner. According to the amended complaint, Eisner informed the board members (the "Old Board") that he had unilaterally decided to hire Ovitz despite the fact that Ovitz had never been an executive of a publicly owned entertainment company. Thereafter the compensation committee met to discuss the terms of Ovitz's employment and a rough summary of his employment agreement. The committee allegedly did not engage an expert to evaluate the draft employment agreement, nor, the complaint alleged, were any analyses or opinions presented to the committee to aid it in its decision. Similarly, the complaint alleged that no expert provided any analysis or review of the terms of Ovitz's hiring to the full Board, nor did the directors ask any questions about Ovitz's employment agreement or analyze the possible costs of his termination prior to approving Ovtiz's hiring.
Ovitz's final employment agreement was for a term of five years at a salary of $1 million per year, with a potential bonus of up to $10 million per year and a series of stock options. The final terms agreed upon allegedly differed in substantial respects from the draft approved by the compensation committee. For one, the options granted to Ovitz were already "in the money" by the time Ovitz signed the agreement two months after he began acting as President. More pertinent though, the final version of the agreement allegedly enlarged the circumstances under which Ovitz could receive the benefits of a non-fault termination. The draft version of the agreement approved by the compensation committee and the Old Board only allowed for a non-fault termination in the event Disney wrongfully terminated Ovitz or if Ovitz died or became disabled. The final version, however, granted Ovitz the benefits of a non-fault termination so long as he did not act with gross negligence or malfeasance. The benefits of a non-fault termination would prove enormous: Ovitz would receive his salary for the remainder of the five years discounted to present value, a $7.5 million bonus for each year left under the contract, a $10 million "termination payment," and all of his stock options would vest immediately. As such, "the contract was most valuable to Ovitz the sooner he left Disney."
Ovtiz's tenure at Disney was, in fact, short-lived. Less than on year after his hiring, Ortiz and CEO Eisner began discussing Ovtiz's termination. Ultimately, the complaint alleged that Eisner and one other director approved an agreement granting Ovitz a non-fault termination, which secured over $38 million in cash for Ovitz and caused his options to purchase three million shares to vest immediately (all together alleged to have a present value of over $140 million). Although the board of directors was aware that Eisner was awarding Ovitz a non-fault termination, the new board allegedly did not approve or question the decision.
Emphasizing that it was merely accepting the allegations of the amended complaint as true, the Court addressed whether the complaint survived a Rule 23.1 motion to dismiss under the second prong of Aronson v. Lewis, 473 A.2d 805 (Del. 1984). In order for demand to be excused, Aronson requires, in pertinent part, that a plaintiff to allege particularized facts that raise doubt about whether the challenged transaction is entitled to the protection of the business judgment rule.
The Court first rejected defendants' contention that, at most, the amended complaint stated a breach of the duty of care for which Disney's § 102(b)(7) charter provision would provide exculpatory protection. According to the Chancellor, a fair reading of the amended complaint suggested that the directors had not acted in good faith and, therefore, were not protected by the business judgment rule or the exculpatory charter provision. As the Chancellor explained:
- These facts, if true, do more than portray directors who, in a negligent or grossly negligent manner, merely failed to inform themselves or to deliberate adequately about an issue of material importance to their corporation. Instead, the facts alleged in the new complaint suggest that the defendant directors consciously and intentionally disregarded their responsibilities, adopting a 'we don't care about the risks' attitude concerning a material corporate decision. Knowing or deliberate indifference by a director to his or her duty to act faithfully and with appropriate care is conduct, in my opinion, that may not have been taken honestly and in good faith to advance the best interests of the company.
The Court emphasized the extreme inattentiveness to duty alleged in the complaint, saying the alleged actions by the board evidenced an "ostrich-like" approach to the board decisions at issue. As such, label of "bad faith" would appear to be reserved for cases in which the court finds (or a complaint sufficiently alleges) gross inattention by directors to their duties.
B. Emerald Partners v. Berlin
In Emerald Partners v. Berlin, the Delaware Supreme Court once again considered an appeal from a decision of the Court of Chancery upholding the fairness of a 1988 stock-for-stock merger between May Petroleum, Inc. ("May") and a group of real estate corporations owned by May's Chairman, CEO and controlling stockholder, Craig Hall ("Hall"). In the opinion below, the Court of Chancery had engaged in a painstaking analysis of the process leading up to the merger. Plaintiff asserted that the merger was the product of unfair dealing because the director defendants did not engage in vigorous, arm's-length bargaining. For example, plaintiff argued that the three independent directors were never lawfully appointed as a special committee and furthermore failed to act impartially and in the best interest of the minority stockholders. Then-Vice Chancellor Jacobs acknowledged the existence of "process laxity" in this instance, but nonetheless held that "at all times those three directors negotiated the merger terms in good faith, at arm's length, and in an adversarial manner, in reliance on the advice of their financial and legal advisors."
More importantly, perhaps, the Court also found that the price was fair. Plaintiff asserted that the price was unfair as of the date of the merger because the value of the Hall companies had declined in relation to the value of May. Viewing the price inquiry as whether each side of the exchange was substantially equivalent in value to the other, the Court accepted defendants' experts' valuation of the Hall companies and found that, despite a downturn in the Hall companies' financial picture following execution of the merger agreement, the exchange ratio was entirely fair to May's minority stockholders.
On appeal, the Supreme Court affirmed by order the Court of Chancery's holding that the merger was entirely fair despite stating that "the many process flaws in this case raise serious questions as to the independent directors' good faith, e.g., the independent directors evidenced a 'we don't care about the risks' attitude by repeatedly failing to exclude Hall from their deliberative process and by giving Hall continuous direct and prior access to the valuation expert hired to advise the independent directors." Even though the Supreme Court questioned the process flaws, because the Vice Chancellor had held that the price was fair and had based that decision on expert financial testimony, the Supreme Court afforded a high level of deference to that determination and affirmed that the merger was entirely fair. In doing so, the Supreme Court found it unnecessary to deal with the good faith and other process issues because the price was fair so that no monetary damages were proven.
Although there is little discussion in the Order, the implication of such a decision is that price trumps process. So long as the ultimate price achieved is fair, any process flaws, even ones that create questions about the independent directors' good faith, are of little import. So read, however, Emerald Partners appears to be inconsistent with a long line of Delaware cases that discussed the concept of entire fairness as a unitary standard with two elements - fair price and fair process - both of which had to be proven before a transaction could be deemed entirely fair. This decision is also interesting in the fact that it equates process flaws (albeit "serious" ones) with a potential lack of good faith by the independent director-defendants. While the Court's ultimate conclusion that the receipt of a fair price moots the issue of fair process because a plaintiff cannot prove damages seems logical, it is unclear whether and to what extent the Court intended to back away from its previous insistence on both fair price and fair process, or from cases holding that, at a minimum, nominal damages should be awarded where a fiduciary breach is found.
* Michael D. Goldman and John F. Grossbauer are partners and Catherine A. Strickler is an associate, at Potter Anderson & Corroon LLP in Wilmington, Delaware. The views expressed herein are those of the authors and may not be representative of the views of the firm or its clients.
1 8 Del. C. § 102(b)(7).
2 824 A.2d 917 (Del. Ch. 2003), appeal refused 2003 WL 21756131 (July 28, 2003) (TABLE).
3 Id. at 926.
4 See Zapata Corp. v. Maldonado, 430 A.2d 779 (Del. 1981).
5 Id. at *25.
6 Id. at 930.
7 Id. Specifically, Defendant Donald Lucas was a Stanford alumnus who had directed millions of dollars in donations to the University, including to the Stanford Law School and Stanford Institute for Economic Policy Research ("SEIPR"), with both of with which Director Grundfest was closely associated. Defendant Michael Boskin was an economics professor at Stanford who taught Grundfest as a Ph.D. candidate and served as a senior fellow and steering committee member of SEIPR with Grundfest. And lastly defendant Lawrence Ellison was Oracle's CEO who had been a generous benefactor to Stanford, donating millions of dollars to the University.
8 Id. at 936.
9 Id. at 938.
10 Id. at 938-39.
11 Id. at 941.
13 It is important to keep in mind the context in which the Oracle decision was made. The Supreme Court decision first recognizing the efficacy of an SLC also mandated a more searching inquiry of an SLC's formation, process and decision making than is the case in the context of the review of committee actions in other contexts. See Zapata Corp. v. Maldonado, supra n.5.
14 833 A.2d 961 (Del. Ch. 2003).
15 Id. at 972.
16 See, e.g., Broc v. Cellular Information Sys., Inc., 673 A.2d 148 (Del. 1996) (setting forth standard for determining usurpation of corporate opportunity).
17 Significantly, in granting defendants' motion to dismiss, the Court once again urged the plaintiff's bar to make a demand for books and records prior to filing derivative actions which seek to plead demand futility.
18 833 A.2d at 977 (quoting Rales v. Blasband, 634 A.2d 927, 935 (Del. 1993)).
19 Id. at 980.
21 Id. at 979 (emphasis in original).
22 C.A. No. 19988, Chandler, C. (Del. Ch. Jan. 23, 2004) (Memorandum Opinion)
23 Mem. Op. at 5-6.
24 Id. at 7.
25 Id. at 8.
26 825 A.2d 275 (Del. Ch. 2003).
27 See Brehm v. Eisner, 746 A.2d 244 (Del. 2000).
28 In Re Walt Disney, 825 A.2d at 278.
29 Id. at 279.
30 The Chancellor noted that the timing of the signing of Ovtiz's contract after he began his employment rendered the entry into the agreement an interested transaction, thus preventing Ovtiz from obtaining a dismissal of the fiduciary duty claims against him. [CITE]
31 Id. at 283.
32 Id. at 285-86.
33 Id. at 289.
34 C.A. No. 295, (Del. Dec. 23, 2003) (ORDER).
35 See Emerald Partners v. Berlin, 2003 WL 21003437 (Del. Ch.).
36 Id. at *23.
37 Id. at *8.
38 Emerald Partners, C.A. No. 295, Berger, J. (Del. Dec. 23, 2003) (ORDER at 2).
39 See, e.g., Weinberger v. UDP, Inc., 457 A.2d 401 (Del. 1983); Kahn v. Lynch Communication Sys., Inc., 669 A.2d 79 (Del. 1995).
40 See Gaffin v. Teledyne Corp., 1990 WL 195914 (Del. Ch. 1990) (awarding nominal damages in case where process unfair but price fair); cf. Loudon v. Archer-Daniels Midland, Inc., 700 A.2d 135 (Del. 1997) (no per se rule awarding damages for breach of fiduciary duty of disclosure, but suggesting some damages generally available in other instances).