In re Delphi Financial Group Shareholder Litigation

Rosenkranz, Delphi's founder and CEO holding Class B super-voting shares giving him 49.9% voting power despite only 12.9% equity, negotiated a $46-per-share acquisition offer from TMH while simultaneously threatening to block the deal unless he personally received a premium for his controlling shares, despite Delphi's charter guaranteeing equal merger consideration for both share classes; a Special Committee representing Class A shareholders negotiated Rosenkranz's demanded $59/$43 split down to $53.875 for his Class B shares versus $44.875 for Class A shares, secured majority approval requirements from disinterested Class A shareholders and for the necessary charter amendment permitting disparate consideration, and concluded the deal served Class A shareholders' interests since it was the only way the acquisition could proceed. Shareholders (plaintiffs) sought a preliminary injunction to block the deal, alleging breach of fiduciary and contractual duties.