Cooke v. Oolie
Delaware Court of Chancery
2000 Del. Ch. LEXIS 89 (May 24, 2009)
TNN directors Oolie and Salkind (defendants), who were also creditors of the company, favored the "USA deal" acquisition proposal that shareholders (plaintiffs) claimed served the pair's personal interests as creditors over allegedly more valuable competing proposals; TNN's two other directors, who had no interest in the deal whatsoever, independently voted to pursue the USA deal as well. The plaintiffs sued for breach of the duty of loyalty and obtained discovery, and Oolie and Salkind moved for summary judgment.
Whether, when shareholders challenge the fairness of an action taken by interested directors with approval from the disinterested directors after full disclosure, the business judgment rule will apply.