In re CNX Gas Corporation Shareholders Litigation

CONSOL (defendant), holding 83.5% of CNX (defendant), reduced CNX's board to leave only one independent director, Pipski, and privately negotiated an acceptable tender-offer price with institutional investor T. Rowe Price before launching a two-step freeze-out merger conditioned on majority-of-the-minority tender; the CNX board refused to authorize its one-person special committee to actually negotiate, and although the committee later tried to push for a higher price and was retroactively authorized to negotiate, CONSOL refused to budge and the committee never issued an opinion approving the deal, instead noting that the CONSOL-Price side agreement effectively guaranteed the tender offer's success and nullified the minority-approval condition's protective function. Minority shareholders (plaintiffs) sued in Delaware Chancery Court challenging the merger.