|
''Cheff v. Mathes'', 199 A.2d 548 (Del. 1964) was a case in which the Delaware Supreme Court first addressed the issue of director conflict of interest in a corporate change of control setting. This case is the predecessor to future seminal corporate law cases including: ''Unocal Corp. v. Mesa Petroleum Co.'', ''Revlon v. MacAndrews'', and ''Paramount v. Time''. ==Facts== Holland Furnace Company manufactured home furnaces. The company's marketing strategy involved door-to-door sales, which employed a large workforce. This model, if not unique to Holland Furnace, was nevertheless unusual. From the standpoint of Arnold Maremont, a businessman who had been purchasing Holland Furnace stock, it was unprofitable. These practices also implicated Holland Furnace in charges of unfair trade practices. (An investigation of these practices by the Federal Trade Commission had already been pending for a year at the time of the events underlying the decision in ''Cheff''.) Sales representatives for Holland would go door to door posing as official inspectors. Claiming to be employed by the homeowner's utility or by the local government, these salesmen would dissassemble the furnace, refusing to reassemble it for lack of spare parts. Holland's core business lay in ''replacement'' boilers. Cheff-Landwehr family group had effective control over the company, with 18.5% of Holland stock. Cheff, a family member, was Holland's Chief Executive Officer. From 1948-1956, Holland's sales declined by 25%. Management attributed the sharp drop to a boom in sales following World War II, which could not be sustained in later years. Maremont, an owner of an automotive parts manufacturing business, approached Cheff in 1957 to discuss the possibility of a merger between the two companies. Cheff was not interested in a business combination. Rebuffed, Maremont purchased 6% of Holland stock on the open market. Cheff ordered an investigation of Maremont, and learned that Maremont had engaged in corporate takeovers and liquidation of several companies. (At the resulting trial, Cheff would testify that Maremont was not well regarded among local area businessmen.) Cheff and Maremont met a second time, by which time Maremont owned 11% of Holland Stock. Maremont told Cheff that Holland's door-to-door sales tactic was obsolete and should be abandoned in favor of a wholesaler marketing strategy. Upon learning of Maremont's plans, Cheffs and Holland's board of directors agreed that Maremont posed a threat to Holland's continued existence. Holland's board would claim that Maremont's threat caused many of Holland's employees to quit in anticipation of the threatened takeover. With the stated aim of eliminating Maremont's threat to Holland's existence, the Holland board of directors authorized the repurchase of Maremont's holdings of Holland stock at a price above the prevailing market stock price. Essentially, the board authorized the payment of greenmail to Maremont. ;Business Judgment Rule The Delaware Supreme Court first had to determine whether Holland's directors were protected from judicial scrutiny of their actions under the business judgment rule. While the business judgment rule typically protects corporate officers from judicial scrutiny of their actions, the rule could be limited if judges found a conflict of interest. In the case of Holland Furnace, the board's purchase of shares with corporate funds prevented a hostile takeover (which could have been in the best interest of the company) while also maintaining their control of the company. Thus, the court had to decide whether the Board was so conflicted that they should not be afforded Business Judgment Rule protection. ;Threat to Corporate Policy "The question then presented is whether or not (board ) satisfied the burden of proof of showing reasonable grounds to believe a danger to corporate policy and effectiveness existed by the presence of the Maremont stock ownership. It is important to remember that the directors satisfy their burden by showing good faith and reasonable investigation; the directors will not be penalized for an honest mistake of judgment, if the judgment appeared reasonable at the time the decision was made." 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Cheff v. Mathes」の詳細全文を読む スポンサード リンク
|