Katz V Bregman,

431 A.2d 1274, appeal ref'd sub nom. Plant Indus., Inc. v. Katz, 435 A.2d 1044 (Del. 1981)

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Nature of the Case

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Facts

Allegedly, during the last six months of 1980 the board of directors of D under the guidance of the individual defendant Bregman, the present chief executive officer of D, embarked on a course of actions which resulted in the disposal of several unprofitable subsidiaries of the D located in the U.S. As a result of these sales, D, by the end of 1980, had disposed of a significant part of its unprofitable assets. According to the complaint, Bregman thereupon proceeded on a course of action designed to dispose of a subsidiary of the D Corp. known as Plant National (Quebec) Ltd., a business which constituted D Corp's entire business operation in Canada and has allegedly constituted D Corp's only income producing facility during the past four years. The professed principal purpose of such sale was to raise needed cash and thus improve D Corp's balance sheet. And while interest in purchasing the Corp's Canadian plant was thereafter evinced not only by Vulcan but also by Universal Drum Reconditioning Co, which later matched and topped Vulcan's bid. However, a contract was entered between D Corp and Vulcan on April 2, 1991, for the purchase and sale of the Canadian plant.