Wlr Foods, Inc. v. Tyson Foods, Inc.

65 F.3d 1172 (4th Cir. 1995)

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Nature of the Case

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Facts

D, a nationwide poultry producer, sought to acquire P, a chicken and turkey producer. P's board adopted various defensive measures to protect P against the takeover. D eventually presented a tender offer directly to the stockholders of P, but withdrew the offer several months later, claiming that, due to actions taken by the P Board, D's offering price was no longer reflective of the value of P's stock. Tyson appealed several rulings of the district court, which found that the defensive tactics adopted by the P were a valid legal means by which to respond to the threatened takeover. In particular, D thought that Section 690 of the Virginia Business Judgment Statute allowed a court to inquire into the processes employed by directors in making decisions with respect to the takeover, and not into the substance of the decisions. The court had denied D discovery of substantive materials and content used by P in response to the takeover. D appealed.