Williams v. Geier

671 A.2d 1368 (Del.1996)

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Nature of the Case

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Facts

The board of directors of Milacron (D) (the board) proposed a plan that they called tenured voting. Under the plan, current shareholders of the stock would get 10 votes per each share that they owned, as opposed to one vote. If the share were transferred, it would revert back to one vote per share for three years, when it would move again to 10 votes per share. The proxy that management presented clearly stated that the proposal would make the firm less attractive to companies that wished to purchase it and that it would be beneficial to management and long-term shareholders. The plan was approved, and the plaintiffs allege that this was a scheme to entrench management and to prevent any mergers or takeovers of Milacron. Indeed, the plan would make the firm less attractive to outside interests. The lower court used the Unocal standard of heightened scrutiny and ruled for the D.