COURT OF CHANCERY

OF THE

STATE OF DELAWARE

 417 SOUTH STATE STREET

 JOHN W. NOBLE DOVER, DELAWARE 19901

VICE CHANCELLOR TELEPHONE: (302) 739-4397

 FACSIMILE: (302) 739-6179

December 23, 2014

Seth D. Rigrodsky, Esquire S. Mark Hurd, Esquire

Rigrodsky & Long, P.A. Morris, Nichols, Arsht & Tunnell LLP

2 Righter Parkway, Suite 120 1201 North Market Street

Wilmington, DE 19803 Wilmington, DE 19801

Re: In re Zhongpin Inc. Stockholders Litigation

C.A. No. 7393-VCN

Date Submitted: December 18, 2014

Dear Counsel:

Defendants Raymond Leal, Yaoguo Pan, and Xiaosong Hu (collectively, the 

“Special Committee Defendants”) seek certification of an interlocutory appeal of 

this Court’s Memorandum Opinion1of November 26, 2014 (the “Memorandum 

Opinion”) and its implementing order. The Special Committee Defendants had 

argued that claims against them should be denied because of the exculpatory 

provision in Zhongpin Inc.’s charter adopted pursuant to 8 Del. C. § 102(b)(7). 

The Court rejected that argument in the context of this entire fairness case and 

 

1

In re Zhongpin Inc. S’holders Litig., 2014 WL 6735457 (Del. Ch. Nov. 26, 2014).
In re Zhongpin Inc. Stockholders Litigation

C.A. No. 7393-VCN

December 23, 2014

Page 2

relied upon In re Cornerstone Therapeutics Inc. Stockholders Litigation.

2

 The 

defendants in Cornerstone, who are in substantially the same position as the 

Special Committee Defendants, sought an interlocutory appeal, which this Court 

certified3and which the Supreme Court accepted.4

The trial court’s decision to certify an interlocutory appeal is governed by 

Supreme Court Rule 42. The grounds for certifying Cornerstone I for appeal and 

for certifying the Memorandum Opinion for interlocutory appeal are substantially 

the same. Briefly, the decision not to dismiss the claims against the Special 

Committee Defendants determines a substantial issue because, if reversed, the 

Special Committee Defendants may extricate themselves from this litigation as 

parties. Second, the Memorandum Opinion establishes a legal right in that it 

requires the Special Committee Defendants to remain as parties to this litigation 

without the ability to assert currently their Section 102(b)(7) defense. Finally, the 

Memorandum Opinion satisfies the requirements of Supreme Court Rule 42(b)(i) 

 

2

2014 WL 4418169 (Del. Ch. Sept. 10, 2014) (“Cornerstone I”).

3

In re Cornerstone Therapeutics Inc. S’holders Litig., 2014 WL 4784250 (Del. 

Ch. Sept. 26, 2014) (“Cornerstone II”).

4

In re Cornerstone Therapeutics Inc. S’holders Litig., No. 564, 2014 (Del. Oct. 9, 

2014) (ORDER).
In re Zhongpin Inc. Stockholders Litigation

C.A. No. 7393-VCN

December 23, 2014

Page 3

by meeting the “conflicting decisions” criterion for certification of questions of law 

as provided in Supreme Court Rule 41(b)(ii). 

In addition, as a practical matter, resolution of whether a 102(b)(7) defense 

is currently available would serve the considerations of justice5and, potentially, 

might significantly limit litigation costs and burdens for the Special Committee 

Defendants.6 In sum, it is appropriate to certify the Special Committee 

Defendants’ interlocutory appeal, despite the fact that, even if the Special 

Committee Defendants are successful, this litigation will not be fully concluded.

An implementing order will be entered.7

Very truly yours,

/s/ John W. Noble

JWN/cap

cc: Robert S. Saunders, Esquire

Register in Chancery-K

 

5

See Del. Supr. Ct. R. 42(b)(v).

6

In short, the Court follows the reasoning of Cornerstone II in certifying an 

appeal.

7 With the granting of the Special Committee Defendants’ motion, it is unnecessary 

to address their motion to stay this proceeding pending resolution by the Supreme 

Court of the appeal in Cornerstone. The application to stay was presented as an 

alternative to the motion to certify an appeal.