Arnold v. Society For Savings Bancorp, Inc.

650 A.2d 1270 (1994)

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Nature of the Case

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Facts

This suit arose out of a merger of BBC Connecticut Holding Corporation ('BBC'), a wholly-owned Connecticut subsidiary of Bank of Boston Corporation ('BoB'), a Massachusetts corporation, into Society for Savings (Society), a wholly-owned Connecticut subsidiary of Society for Savings Bancorp, Incorporated ('Bancorp'), a Delaware corporation. Bancorp ultimately merged with BoB. P was a Bancorp stockholder. Bancorp, BoB, BBC, and twelve of fourteen members of Bancorp's board of directors were named as defendants. P claimed in part violations of the duty to disclose by omissions and misrepresentations in the proxy statement used for the merger. Bancorp defended in that its certification of incorporation adopted §102(b)(7) which exempts directors from liability for negligent breaches of duty. P claimed that §102(b)(7) was not meant to cover disclosure claims and even if it were these acts were intentional and knowing. The court held that the errors in the proxy statement were immaterial and awarded summary judgment. P appealed.