The conversion ratio was based on each stock’s market price in the ten trading days leading up to Dell’s decision to convert. Under Dell’s certificate of incorporation, the Class V stock could be converted into Class C common shares at Dell’s election if the Class C shares also became publicly traded (the “Conversion Right”). As part of the consideration, Dell issued shares of new publicly traded Class V common stock intended to track the value of Dell’s ownership interest in VMWare. ![]() In 2016, Dell acquired EMC Corporation, which owned an 81.9% interest in VMWare, Inc. He also controlled board votes via a director seat with super-voting rights. (“Dell”) was controlled by Michael Dell and his affiliates. The Transaction: Dell’s Class V Stock Redemptionįollowing a 2013 going-private transaction, a majority of the voting power of Dell Technology Inc. 11, 2020), held that a redemption of minority stockholders’ shares failed to satisfy MFW due to the company’s decisions to give the special committee an impermissibly narrow mandate and then bypass it to negotiate directly with minority stockholders. The Court also found that, in light of the looming threat of undesirable alternative transaction, the company’s offer was impermissibly coercive. 2014). The Court of Chancery’s recent decision in In re Dell Tech. ![]() The Delaware Supreme Court’s MFW decision provides a safe harbor for controlling stockholder buyouts that are conditioned upon approval of a special committee of independent directors and a majority-of-the-minority vote, provided, inter alia, “there is no coercion of the minority.” Kahn v. ![]() Posted In Delaware Business Court Insider
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