Nixon v. Blackwell
Delaware Supreme Court
626 A.2d 1366 (1992)
In a closely-held corporation where voting Class A stock went to employees and non-voting Class B stock went to the founder's family (plaintiffs), the company offered periodic self-tender repurchases of Class B stock while giving employees liquidity for their Class A shares through an ESOP and company-funded life insurance benefiting the corporation on key executives' deaths. Class B shareholders sued the corporation and its directors, and the Court of Chancery found the dividend and compensation decisions valid but concluded the overall "liquidity scheme" unfairly favored employee shareholders, ordering equal share repurchases going forward; the defendants appealed.
Whether, under Delaware law, corporate directors owe shareholders a fiduciary duty of equal treatment, rather than merely fair treatment.