We like to bring in the new year with our own countdown.
For the fourth year in a row (for prior listings, see 2009, 2008, and 2007), we conduct a retrospective on the decisions that emerged from the Delaware courts over the last year and rank the five most anti-shareholder in analysis and result. There are plenty to choose from. The courts in Delaware make what can only be described as consistently "management friendly" decisions, often at the expense of shareholders.
The last four years have seen some evolution. Overt anti-shareholder rehtoric has decreased, although we will set out a noticeable exception in our countdown. The Supreme Court hasn't described plaintiffs (aka shareholders) as "prolix" since Wood v. Baum, 953 A.2d 136 (Del. 2008); the Chancery Court since In re Citigroup, 964 A.2d 106 (Del. Chan. 2009). Prolix is, as we have noted, a term reserved exclusively to describe pleadings submitted by plaintiff/shareholders; never by management.
In terms of outcomes, however, this has been a very bad year for shareholders. If there is a trend, it is that this type of outcome is far more common than in the past. In the 1980s, the Delaware courts occasionally sided with shareholders (Van Gorkom comes to mind; in some ways, Unocal was at least a partial victory for shareholders). In the new millennium, these sorts of victories are largely nonexistent.
Anyway, on to the countdown of the five worst shareholder decisions by the Delaware courts for 2010.