COURT OF CHANCERY 

OF THE

SAM GLASSCOCK III 

VICE CHANCELLOR

STATE OF DELAWARE COURT OF CHANCERY COURTHOUSE

34 THE CIRCLE

GEORGETOWN, DELAWARE 19947

 September 28, 2017 

Joel E. Friedlander, Esquire 

Jeffrey M. Gorris, Esquire 

Christopher P. Quinn, Esquire 

Friedlander & Gorris, P.A. 

1201 North Market St., Suite 2200 

Wilmington, DE 19801 

Rudolf Koch, Esquire 

Rachel E. Horn, Esquire 

Matthew D. Perri, Esquire 

Ryan P. Durkin, Esquire 

Richards, Layton & Finger, P.A. 

920 North King Street 

Wilmington, DE 19801 

John L. Reed, Esquire 

Ethan H. Townsend, Esquire 

DLA Piper LLP (US) 

1201 North Market St., Suite 2100 

Wilmington, DE 19801 

Re: Elizabeth Morrison v. Ray Berry, et al. 

Civil Action No. 12808-VCG 

Dear Counsel: 

 The Plaintiff1 was a stockholder2 in The Fresh Market (the “Market” or the 

 

1

 All well-pled facts drawn from Plaintiff’s Verified Complaint (“Compl.”), together with the 

reasonable inferences therefrom, are presumed true for purposes of evaluating Defendants’ motion 

to dismiss. Cent. Mortgage Co. v. Morgan Stanley Mortgage Capital Holdings LLC, 27 A.3d 531, 

536 (Del. 2011). However, I am not required to “draw unreasonable inferences in favor of the 

non-moving party.” Price v. E.I. DuPont de Nemours & Co., 26 A.3d 162, 166 (Del. 2011). 

Consideration of certain documents filed with the SEC are also appropriate in this case as they are 

“both integral to and incorporated into the Plaintiff’s complaint.” New Jersey Carpenters Pension 

Fund v. Infogroup, Inc., 2011 WL 4825888, at *2 n.1 (Del. Ch. Sept. 30, 2011). I note that the 

Plaintiff alleges that certain portions of the Schedule 14D-9 are “false and misleading.” Compl. ¶ 

118.

2

 Aff. & Verification of Elizabeth Morrison Pursuant to Ct. of Ch. R. 23(AA) and 3(AA) ¶ 2. 
2

“Company”), a Delaware corporation owning a grocery store chain.3 The Market 

was acquired by an entity controlled by a private equity firm, Apollo Management, 

L.P. (“Apollo”).4 The founder of the Market, Ray Berry, rolled his equity ownership 

in the Market into the acquirer as a part of the deal.5 At the time of the merger, Ray 

Berry was a director of the Market.6 Together with his son,7 he owned a significant 

block of Company stock, nearly ten percent of the outstanding common stock.8 

Nearly eighty percent of the outstanding shares tendered into the merger.9 The 

Plaintiff alleges a breach of fiduciary duty10 by the director defendants11 and that 

Brett Berry aided and abetted that breach of fiduciary duty.12 

 For reasons explained fully in a number of opinions of this Court and our 

Supreme Court, this jurisdiction has determined that there is little utility in a judicial 

review of a corporate merger in which an uncoerced and fully informed vote of the 

common stockholders has ratified a decision of the directors that the merger is in the 

 

3

 Compl. ¶ 3. 

4

 Compl. ¶ 101; Transmittal Aff. of Christopher P. Quinn Ex. C. 

5

 Compl. ¶ 3. 

6

Id. ¶ 3. 

7

 Defendant Brett Berry is a former CEO and a former Vice Chairman of the Company Board. 

Compl. ¶¶ 1, 3. 

8

Id. ¶¶ 3, 44. 

9

 Aff. of Rachel E. Horn in Support of the Dir. Defs.’ Mot. to Dismiss (“Horn Aff.”), Ex. N 

(“Horn. Aff. Form 8-K”). 

10 Compl. ¶¶ 134–40. 

11 The director defendants include Richard A. Anicetti, Michael D. Casey, Jeffrey Naylor, 

Richard Noll, Bob Sasser, Robert K. Shearer, Michael Tucci, Steven Tanger, and Jane 

Thompson. Id. ¶¶ 24–33. Richard A. Anicetti was also the CEO at the relevant time. Compl. ¶ 

24. 

12 Id. ¶¶ 142–46. 
3

stockholders’ best interest.13 This matter, to my mind, presents an exemplary case 

of the utility of that ratification doctrine, as set forth in Corwin and Volcano. Here 

there was no coercion applied to the stockholder vote.14 An insider and board 

member, Berry,15 was in favor of a private equity takeover and, without initially 

informing the other directors, spoke with potential equity investors.16 He favored 

Apollo.17 Apollo, armed with the founder’s preliminary agreement to roll over his 

equity, made an unsolicited offer for the Market.18 This offer put the Market in 

play.19 Berry recused himself from consideration of a potential sale by the Board of 

Directors,20 and waived notice of any meetings at which strategic alternatives would 

be discussed.21 The remainder of the Board consisted of eight independent 

directors.22 These directors created a special committee of three independent 

 

13 See, e.g., Corwin v. KKR Fin. Hldgs. LLC, 125 A.3d 304, 306 (Del. 2015) (“For sound policy 

reasons, Delaware corporate law has long been reluctant to second-guess the judgment of a 

disinterested stockholder majority that determines that a transaction with a party other than a 

controlling stockholder is in their best interests.”); In re Volcano Corp. Stockholder Litig., 143 

A.3d 727, 747 (Del. Ch. 2016) (“[A]cceptance of a first-step tender offer by fully informed, 

disinterested, uncoerced stockholders representing a majority of a corporation's outstanding 

shares in a two-step merger . . . has the same cleansing effect under Corwin as a vote in favor of 

a merger by a fully informed, disinterested, uncoerced stockholder majority.”).

14 Compl. ¶¶ 10, 122. 

15 Unless otherwise indicated, “Berry” refers to Ray Berry and not his son, Brett Berry. 

16 Compl. ¶¶ 40–41. 

17 Id. ¶ 5. 

18 Id. ¶ 6. 

19 Id. ¶¶ 7, 11. 

20 Id. ¶ 79. 

21 Horn Aff. Ex. A at 18–19 (“Horn Aff. Sched. 14D-9.”). 

22 Compl. ¶¶ 24–32; Horn. Aff Ex. C at 7. 
4

directors to consider strategic alternatives;23 ultimately, the Company engaged in a 

three-month auction24 by hiring J.P. Morgan Securities LLC (“J.P. Morgan”),25

soliciting thirty-two potential bidders,26 receiving five indications of interest,27 and 

evaluating several offers.28 At the end of this five-month process, Apollo was the 

successful bidder, and the Board, on recommendation of the special committee, 

approved the tender offer described above.29 Because the majority of the shares were 

tendered,30 (and because there are no allegations of waste) the only remaining 

question is whether the vote was adequately informed so as to serve as a ratification 

of the Board’s decision. I conclude that it was and that therefore this matter must be 

dismissed. 

 The Plaintiff makes two broad arguments that the tender was uninformed. The 

first, and easiest to deal with, involves the financial disclosures.31 The Board hired 

J.P. Morgan to provide a fairness opinion on the Apollo offer.32 J.P. Morgan used 

 

23 Compl. ¶ 53; Horn Aff. Sched. 14D-9 at 18. 

24 Compl. ¶¶ 53, 84. 

25 Id. ¶ 53. 

26 Horn Aff. Sched. 14D-9 at 22. 

27 Id. 

28 See Compl. ¶¶ 84; Horn Aff. Sched. 14D-9 at 23. 

29 Compl. ¶ 101; Horn. Aff. Form 8-K; Pl. Elizabeth Morrison's Answering Br. on CrossMotions for Consolidation & Appointment of Lead Pl. & Lead Counsel Ex. D at 2 (“Pl.’s Ans. 

Br. Ex. D Sched. 14D-9 Amend. No. 5”). 

30 Compl. ¶ 101; Horn. Aff. Form 8-K. 

31 Compl. 126–27. 

32 Id. ¶ 53. 
5

management projections,33 engaged in a DCF analysis,34 and determined that the 

purchase price was within the range of fairness, although marginally so.35 The 

Plaintiff’s specific complaints of disclosure insufficiency are that the disclosures 

provided the stockholders with insufficient information about the “conservative” 

nature of management’s November 17, 2015 projections36 and failed to disclose that 

sensitivities run on those projections by J.P. Morgan “included upside as well as 

downside sensitivities.”37 However, nothing indicates that the management 

projections38 or J.P. Morgan’s analysis39 are anything other than their best estimates, 

which were adequately described.40 

 The Plaintiff relies more heavily on what she considers to be disclosure 

violations concerning Berry’s role in the process.41 The disclosures describe the 

 

33 Id. ¶ 73. 

34 Id. ¶¶ 73, 97, 99. 

35 Id. ¶¶ 20, 73, 107; Horn Aff. Sched. 14D-9 at 43. 

36 Compl. ¶ 63, 126 (alleging that management’s “15% overall risk adjustment to the projections 

. . . reflect[ed] the[ir] incentive[s]” from a “compensation package” rather than “different 

initiatives receiving different risk weighting based on likelihood of achievability.”). 

37 Id. ¶ 127 (stating that “revenue growth and EBITDA margin sensitivities reviewed at that 

[December 1, 2015] Board meeting ranged from -3% to +1%”). 

38 Horn Aff. Sched. 14D-9 at 46–48 (including a “summary of the unaudited prospective 

financial information for the years 2016 through 2025 prepared by TFM’s management . . . based 

on the information available to TFM’s management at the time the November 17 Management 

Case was developed.”). 

39 Pl.’s Ans. Br. Ex. D Sched. 14D-9 Amend. No. 5 at 4 (noting that the December 2015 Board 

meeting discussed the receipt of “certain sensitivity information regarding different assumptions 

as to revenue and gross margin in the event that TFM was not able to execute on its strategic 

plan or the timing of certain initiatives contained in the strategic plan was later than anticipated” 

and included financial projections for three additional scenarios); Horn Aff. Sched. 14D-9 at 46–

48. 

40 Horn Aff. Sched. 14D-9 at 46–48. 

41 Id. ¶¶ 119–21, 123–25, 128. 
6

elaborate process through which the Board and its special committee and advisors 

engaged in a wide-ranging auction process and go-shop period.42 According to the 

Plaintiff, however, this very description is misleading because, in her view, the 

apparent robustness of the auction was a sham.43 Berry had already made up his 

mind that he wished Apollo to be the acquirer and only Apollo had a shot at winning 

the auction.44 If that allegation were sufficiently supported by the pleadings, surely 

the disclosures were flawed and inadequate to allow the vote to serve as a ratification 

of the Defendants’ actions. 

 The problem with the Plaintiff’s argument is that the facts regarding Berry’s 

involvement with Apollo were disclosed. The conclusion that the Plaintiff reaches—

that the auction was a sham—is not supported by the record. The Plaintiff argues 

that Berry’s commitment to Apollo was far stronger than was disclosed to the Board, 

the participants in the auction, or the stockholders.45 The firmness of his 

commitment had a chilling effect on the other participants in the auction, according 

 

42 Horn Aff. Sched. 14D-9 at 16–17 (engaging in a strategic review); Id. at 17 (retaining counsel 

and reviewing fiduciary duties); Id. at 18 (forming a strategic transaction committee of 

independent directors); Id. (retaining J.P. Morgan as a financial advisor); Id. at 21–22 (soliciting 

thirty-two parties to submit bids in an auction run by the special committee); Id. at 22–23 

(receiving and evaluating five indications of interest); Id. at 23–24 (evaluating a proposal for 

exclusivity by Apollo and granting data room access to several parties); Id. at 27 (negotiating a 

“go-shop” arrangement); Id. at 31 (requesting an increase in the offer price from Apollo); Id. at 

33 (convening the Board, except for Ray Berry, to vote on the strategic committee 

recommendation). 

43 Compl. ¶ 117. 

44 Id. ¶¶ 42, 117. 

45 Id. ¶¶ 42, 46–49, 117. 
7

to the Plaintiffs, and thus the auction was a mere pretense.46 But this is a non 

sequitur: If the Board, the participants in the auction, and the stockholders were 

uninformed of the true commitment between Berry and Apollo, that undisclosed fact 

cannot have chilled the auction. In fact, a review of the SEC filings indicates that 

Berry’s involvement with Apollo was disclosed to the stockholders.47 What is not 

described is the gloss on those facts that the Plaintiff supplies. She complains that 

the directors did not disclose that they had initially been lied to by Berry about his 

involvement, a fact that the Plaintiff asserts must have been apparent to the directors 

under the facts they did disclose.48 This is a self-defeating argument. To the extent 

disclosed facts must have demonstrated Berry’s mendacity to the directors,49 it 

 

46 Id. at 54, 88, 102, 120. 

47 Horn Aff. Sched. 14D-9 at 16 (recusing Ray Berry from Board meetings and deliberations of 

the Merger), 17–18 (discussing “three separate conversations” prior to October 2015 between 

Ray Berry and Apollo and Ray Berry’s willingness to “consider an equity rollover” and that “he 

would only participate in a transaction that was supported by the Board”), 18 (discussing a news 

article stating that Ray Berry was “exploring a bid to take TFM private”), 20 (reaffirming 

Apollo’s proposal in November 2015 for an all-cash transaction “together with Ray Berry and 

Brett Berry” and that Ray Berry and Apollo had “engaged in one conversation” since October 

20, 2015), 21 (confirming “that Mr. [Ray] Berry continued to be willing to discuss an equity 

rollover with any potentially interested party that the Board selected as a winning bidder,” and 

that “Mr. [Ray] Berry would agree to not engage in any discussion regarding an equity rollover 

with any potentially interested party, including [Apollo], until authorized to do so by the 

[Company]” and that Ray Berry “was not working exclusively with any one bidder”), 27 

(determining that “rollover discussions should be permitted only after final bids had been 

received” and when allowed by the Board), 30 (considering a request by J.P. Morgan to allow 

J.P. Morgan to “discuss[] an equity rollover prior to announcement of a transaction”), 31 

(reiterating Apollo’s “interest in speaking with members of the Berry family regarding a 

potential equity rollover” and the strategic committee’s approval of such discussions if 

“chaperoned by J.P. Morgan” and if “no specific price details would be shared . . . .”). 

48 Compl. ¶ 124. 

49 Id. ¶ 124 (“The omission is material not only in substance but also because it shows that Ray 

Berry was lying to the Board, the Board was on notice that Ray Berry was lying to them and the 
8

should have been equally clear to the stockholders themselves. More importantly, 

whether Berry initially was forthcoming about his relationship with Apollo, I find 

that his position as of the time of the auction process and go-shop—that is, at the 

time material to stockholders—was adequately disclosed. 

 The Plaintiff argues that the Schedule 14D-9 “conceals the pressure on the 

Board from activist stockholders to sell the Company” by failing to specifically 

mention “a letter from Neuberger Berman, one of the Company’s significant 

stockholders, expressing its view that the Board should consider selling the 

Company.”50 However, the Board disclosed that the Company “could become the 

subject of shareholder pressure and communications” if it didn’t “enhance 

efficiency,”51 and in fact already “initiate[d] a comprehensive strategic review” and 

“hir[ed] outside financial advisers” as recommended by Neuberger Berman.52 I find 

that this disclosure was adequate. 

 The only factual lacuna in the disclosures that comes close to materiality is 

that Berry threatened to sell his shares on the market if a merger did not close.53 On 

reflection, however, it is not clear to me how this would have affected the total mix 

of information disclosed; certainly, it would not have made investors less likely to 

 

Board did nothing to address it.”) 

50 Id. ¶ 122; Horn. Aff. Ex. Q (“Neuberger Berman October 8, 2015 Letter”). 

51 Horn Aff. Sched. 14D-9 at 18. 

52 Neuberger Berman October 8, 2015 Letter at 2; see Compl. ¶¶ 53 (hiring J.P. Morgan), 58 

(conducting strategic review). 

53 Compl. ¶ 13. 
9

tender if they knew that a large blockholder—the founder—was considering a sale 

if the deal was not consummated. In short, Berry’s activities and his connection to 

Apollo were adequately disclosed to stockholders deciding whether to tender their 

shares. Unsurprisingly, those stockholders nonetheless accepted the merger by 

overwhelmingly tendering in favor, given the large premium the merger payment 

represented over the preannouncement trading price of the Market stock.54 

Because an uncoerced tender of the majority of shares supported the merger 

here, the Plaintiff’s pleading burden on this motion to dismiss, before I address 

whether she has otherwise stated a claim, is to plead facts from which it is reasonably 

conceivable that the potentially ratifying tender was materially uninformed.55 The 

Plaintiff pursued documents to bolster her pleading under Section 220, and her 

position in this case was well briefed and well argued; nonetheless, I find this 

pleading burden unmet. For that reason, the Defendants’ motion to dismiss is 

granted. 

 

54 The Plaintiff makes an argument in briefing that was not advanced at oral argument, that Berry 

engaged in a long-term scheme in which he: 1) somehow caused the board, with its majority of 

independent directors, to discharge the CEO, thereby accelerating a long-term decline in the 

Market’s stock price, reducing the value of Berry’s block; then 2) several months later 

approached private equity firms as part of a takeover scheme favorable to him because of the 

depressed market price; after which he 3) then recused himself and watched the Board engage in 

a five-month sales process, involving both equity and strategic investors, confident that the 

acquirer which would further his interests, Apollo, would prevail. If true, Berry is the most icecold killer gambler of whom I am aware. Even on a motion to dismiss, however, I am not 

required to accept such a scenario, which I do not find to be reasonably conceivable. Pl.’s 

Omnibus Br. in Opposition to Defendants’ Motions to Dismiss at 2, 32, 34. 

55 In re Volcano Corp. Stockholder Litig., 143 A.3d at 747. 
10

To the extent the foregoing requires an Order to take effect, IT IS SO 

ORDERED. 

 Sincerely, 

/s/ Sam Glasscock III 

 Sam Glasscock III