 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Frontier Oil Corp. v. Holly Corp.4/29/2005
ize that he could not pawn off the Frontier stock on Holly shareholders without either disclosing his true aspiration (cash, not Frontier stock) or violating his fiduciary duties. Finally, Holly proposed an all-cash transaction of $28 for each Holly share, only a slight increase in the effective merger consideration and without any upside for Holly shareholders under either an MLP or the aviation fuel claim that was the basis for the CVR. Again, there is no suggestion that Holly was seeking to increase consideration materially; Holly even offered to help finance the additional cash requirements for an all-cash transaction.
The Court, thus, concludes that Holly pursued the post-July 9 negotiations in a good faith effort to find a way to meet the concerns that it had identified. Holly had shared the Lehman Brothers MLP Presentation with Frontier. As soon as the Holly Board met after having been informed of Frontier's indemnities at Beverly Hills, it advised Frontier of its concerns. All subsequent negotiations focused on finding a way around Beverly Hills issues.
Frontier, nevertheless, complains that Holly's Board never disclosed that it was, in effect, withdrawing its recommendation of the Merger and that it continued to hold out the possibility of closing the Merger. Yet, Frontier wanted the opportunity to save the transaction. Frontier's position would suggest that once a board with responsibility for determining whether to exercise a fiduciary out decides that the transaction cannot go forward under the precise contract terms, it must act forthwith to terminate the agreement. No good reason has been offered for why parties should not try to resolve the differences and, more importantly, why a party must exercise its exit rights without offering the other party at least the opportunity to salvage the transaction. If the concept of Holly's seeking to renegotiate the Merger Agreement is so offensive, Frontier must confront the question which it cannot answer: why then did Frontier engage in the negotiations? Again, Frontier's angst stems from the nature of an agreement that allowed multiple exit strategies. As conditions change, frequently without the responsibility of either party to the transaction, the need to reevaluate the Board's recommendation to complete the Merger proceeds apace. When the Holly Board learned of Frontier's potential direct exposure in the Beverly Hills Litigation, it had to evaluate whether it should declare an MAE or whether it should use its fiduciary out to protect the interests of the shareholders who would be receiving Frontier's stock if the Merger closed. Perhaps, Holly would have declared an MAE (as it did after this litigation was filed). Perhaps Holly's Board would have concluded that the facts would not support declaring an MAE (or that it did not want the litigation that such a declaration might bring forth). Perhaps Holly's Board would have concluded that the risks of the Beverly Hills Litigation were large enough to withdraw, in accordance with its fiduciary duties, its recommendation to merge. Frontier, by peremptorily declaring a repudiation, denied the Holly Board that opportunity (and the Holly shareholders the benefit of that opportunity). Indeed, the Holly Board was confronted with a difficult question. It had begun discussions with counsel over what course to follow if Frontier did not take the August 12 all-cash offer. Frontier relieved Holly's directors of that burden.
In sum, Holly was reasonably candid with Frontier; it did not deny Frontier "by arbitrary and unreasonable conduct . . . the fruits of the [Merger Agreement]." Holly still had the opportunity to invoke one or more of its various exit strategies, exit strategies to which Fron
Page 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Delaware Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|