C & J Energy Services, Inc. v. City of Miami General Employees' Retirement Trust
Supreme Court of Delaware
107 A.3d 1049 (Del. 2014)
C & J Energy Services (defendant) agreed to merge with a Nabors Industries subsidiary in a deal offering C & J stockholders roughly $200 million in net-present-value tax benefits contingent on Nabors retaining a controlling interest, offset by a guaranteed pro rata share of any future sale of the combined entity and a provision letting C & J rescind the deal if a better offer emerged; a C & J stockholder, the City of Miami General Employees' Retirement Trust (plaintiff), challenged the deal, and the Delaware Court of Chancery preliminarily enjoined the stockholder vote, finding a plausible Revlon violation because the board hadn't actively shopped the company before agreeing to the deal. C & J appealed.
Whether a board of directors' duty under Revlon to seek the highest value for stockholders in a change-of-control transaction requires the board to actively shop the company before agreeing to a deal.