Tandycrafts, Inc. v. Initio Partners

562 A.2d 1162 (1989)

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Nature of the Case

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Facts

P owned 9.9% of D's common stock. P approached D to acquire a larger, controlling interest in D. D placed two charter amendments before its shareholders for consideration at its next annual meeting. They would impose an 80% supermajority voting requirement for takeover proposals made without director approval. P filed a complaint in the Court of Chancery which sought a preliminary injunction to enjoin the holding of D's annual meeting. P contended that the proxy material failed to place the supermajority voting requirement in the proper context because it did not disclose that the combined effect of the shareholdings of D's employee benefit plan (10.9%) and stock owned by management (7.5%) rendered the attainment of an 80% supermajority vote virtually impossible. P launched its own proxy campaign. At the meeting, the proposed charter amendments were soundly defeated. P filed a motion to dismiss the action together with an application for attorneys' fees and expenses, in the amount of $180,000.