Fiduciary Duties in the Context of Dent v. Ramtron Int’l Corp.

The Delaware Court of Chancery recently addressed a number of claims commonly made in the “ubiquitous” stockholder litigation that follows announcement of a public merger or acquisition transaction.  In Dent v. Ramtron Int’l Corp., C.A. No. 7950-VCP (Del. Ch. June 30, 2014), a stockholder of Ramtron International Corp. filed suit after Ramtron was acquired by Cypress Semiconductor Corporation pursuant to an all-cash tender offer.  The plaintiff alleged that Ramtron’s directors breached their fiduciary duties by failing to maximize the value of the company, adopting several “preclusive” and “draconian” deal protection devices, and failing to fully disclose material information in the company’s proxy statement, and that Cypress aided and abetted those breaches.  The Court granted the defendants’ motion to dismiss, finding that the plaintiff failed, in each count, to state a claim upon which relief could be granted.  In doing so, the Court essentially set forth a roadmap for stockholders considering so-called “strike suits” and for corporations in preempting such suits.
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