Moran v. Household International, Inc.
Supreme Court of Delaware
500 A.2d 1346 (1985)
Household International's (Household) (defendant) board adopted a shareholder rights plan letting existing stockholders buy a hostile acquirer's shares at half price if any single entity made a tender offer for 30% of Household's shares or acquired 20%; Moran (plaintiff), a dissenting director and chairman of Household's largest shareholder (DKM), which had considered its own buyout of Household, sued Household and its directors, but the chancery court upheld the plan as a valid exercise of business judgment. Moran appealed.
Whether a corporation's board of directors may defend against a hostile takeover by giving existing shareholders the right to buy the shares of the hostile purchaser at a discount following the takeover.