Harbor Finance Partners v. Huizenga
Delaware Court of Chancery
751 A.2d 879 (Del. Ch. 1999)
Republic Industries, Inc. (defendant), whose directors owned substantial shares in the company it was acquiring (AutoNation), had its merger with AutoNation approved by a majority, though not all, of informed, uncoerced, and disinterested Republic shareholders. Harbor Finance Partners (plaintiff), a dissenting Republic shareholder, sued alleging the merger terms were unfair to Republic's public shareholders and that shareholder approval rested on a materially misleading proxy statement. The defendants moved to dismiss under Chancery Rule 12(b)(6).
Whether a shareholder may challenge a transaction based on corporate waste, even where a majority of fully informed, uncoerced, and disinterested shareholders approved the transaction by a non-unanimous vote.