Sciabacucchi v. Liberty Broadband Corp.

2017 WL 2352152 (2017)

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Nature of the Case

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Facts

Sciabacucchi (P) is a Charter stockholder. Sciabacucchi (P) is a Charter stockholder. His Complaint focuses on two related transactions: Directors of Charter (Ds) issued equity to an insider, the largest stockholder of Charter, Liberty Broadband Corporation (D), to finance the Acquisitions in part. Liberty Broadband (D) controlled Charter (D), and caused the Defendant directors and officers of Charter to structure the issuances of equity in a way favorable to Liberty Broadband (D) and detrimental to Charter. P alleges that all these Ds breached duties of loyalty, owed to Charter as well as to its stockholders directly, with respect to these transactions. The matter is currently before the court on Ds' motions to dismiss. Ds argue that the Defendant directors were independent and disinterested and that the Complaint fails to state a claim. Ds argue that the vote of the majority of unaffiliated stock in favor of the Liberty Share Issuances (and the Voting Proxy Agreement) cleanses any breaches of duty complained of, under the rationale of Corwin. Under Corwin, a fully informed, uncoerced vote of the majority of disinterested stock results in business judgment review attaching to the transaction so approved, leading to dismissal absent an adequate pleading of waste.