Gimbel v. Signal Companies, Inc.
316 A.2d 599 (Del. Ch. 1974)
Nature of the Case
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Facts
Signal Companies (D) began as an oil and gas business. It later expanded to become a large, multidimensional conglomerate. The board authorized the sale of its oil division without seeking approval from shareholders. The oil business represented 26% of D's assets, 41% of its net worth, and 15% of D's revenues and earnings. A Delaware statute states that when a corporation sells 'all or substantially all' of its assets, it is required to get shareholder approval. Gimbel (P), a shareholder, sued to enjoin the sale. The question, in this case, is whether shareholder approval is required.
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