Carlton Investments v. Tlc Beatrice International Holdings, Inc.

1997 WL 305829 (Del. Ch. May 30, 1997)

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Nature of the Case

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Facts

P, a very substantial stockholder of D alleged that certain past and present directors and officers of D had engaged in conduct constituting breach of fiduciary duty, corporate waste, fraud, and conspiracy. At the core of this action is the claim that Ds breached their fiduciary duties in connection with the board's approval of an approximately $19.5 million compensation package awarded to the company's former CEO, Reginald F. Lewis, on December 24, 1992. This was a hotly contested action on both sides. After a year, the board of directors voted to add two new directors and to constitute them as the SLC, empowering it to investigate the allegations of misconduct and determine the best course of action for the company with regard to this litigation. After an investigation, the SLC entered into a proposed settlement with the Estate of Reginald Lewis. The Estate has agreed, subject to court approval, to pay D a total of $ 14,932,000 plus interest, in installment payments over the next seven years. P resists this proposed settlement and filed a brief in opposition to the proposed settlement and presented its objections at a settlement approval hearing held before this court on April 16, 1997. D moved the court to approve the settlement and dismiss the lawsuit.