COURT OF CHANCERY

OF THE

STATE OF DELAWARE

ANDRE G. BOUCHARD

CHANCELLOR

New Castle County Courthouse

500 N. King Street, Suite 11400

Wilmington, Delaware 19801-3734

Date Submitted: December 31, 2014

Date Decided: January 2, 2015

Seth D. Rigrodsky, Esquire

Brian D. Long, Esquire

Gina M. Serra, Esquire

Rigrodsky & Long, P.A.

2 Righter Parkway, Suite 120

Wilmington, DE 19803

Peter B. Andrews, Esquire

Craig J. Springer, Esquire

Andrews & Springer LLC

3801 Kennett Pike

Building C, Suite 305

Wilmington, DE 19807 

William M. Lafferty, Esquire

John P. DiTomo, Esquire

Lauren K. Neal, Esquire

Morris, Nichols, Arsht & Tunnell LLP

1201 North King Street

Wilmington, DE 19899

Gregory P. Williams, Esquire

A. Jacob Werrett, Esquire

J. Scott Pritchard, Esquire

Richards, Layton & Finger, P.A.

One Rodney Square

920 North King Street

Wilmington, DE 19801

RE: In re Family Dollar Stores, Inc. Stockholder Litigation

Consolidated C.A. No. 9985-CB

Dear Counsel:

On December 24, 2014, Plaintiffs filed an application for certification of an 

interlocutory appeal from the memorandum opinion I issued on December 19, 2014, 

denying Plaintiffs‟ motion to preliminarily enjoin the stockholder vote on the proposed 

merger between Family Dollar Stores, Inc. (“Family”) and Dollar Tree, Inc. (“Tree”).1 

 

1

In re Family Dollar Stores, Inc. S’holder Litig., 2014 WL 7246436 (Del. Ch. Dec. 19, 

2014) (hereafter, the “Opinion”). 
In re Family Dollar Stores, Inc. Stockholder Litigation

Consolidated C.A. No. 9985-CB

January 2, 2015

Page 2 of 8

As discussed in the Opinion, Dollar General, Inc. (“General”) emerged as a 

competing bidder for Family after it had entered a merger agreement with Tree. This 

prompted Plaintiffs to seek to preliminarily enjoin the stockholder vote on the proposed 

merger, which originally was scheduled for December 23, 2014, “[1] until the Board has 

properly engaged with [General] and made a good faith effort to achieve a valuemaximizing transaction, and [2] until corrective disclosures have been made.”2

 On 

December 23, 2014, the stockholder meeting was adjourned until January 22, 2015. 

According to Family‟s public filings, the proposed merger cannot be consummated until 

February 2015.

For the reasons explained below, I deny Plaintiffs‟ application for failure to satisfy 

the requirements of Supreme Court Rule 42(b) for pursuing an interlocutory appeal. 

I. LEGAL STANDARD

“Applications for certification of an interlocutory appeal require the exercise of 

the trial court‟s discretion and are granted only in extraordinary or exceptional cases.”3 

Under Supreme Court Rule 42, “[n]o interlocutory appeal will be certified by the trial 

 

2 Opinion at *11 (quoting Pls.‟ Op. Br. 2).

3

In re Cogent, Inc. S’holder Litig., 2010 WL 4146179, at *1 (Del. Ch. Oct. 15, 2010) 

(citing Ryan v. Gifford, 2008 WL 43699, at *4 (Del. Ch. Jan. 2, 2008); In re Pure Res., 

Inc. S’holders Litig., 2002 WL 31357847, at *1 (Del. Ch. Oct. 9, 2002)).
In re Family Dollar Stores, Inc. Stockholder Litigation

Consolidated C.A. No. 9985-CB

January 2, 2015

Page 3 of 8

court or accepted by [the Supreme] Court unless the order of the trial court [1] determines 

a substantial issue, [2] establishes a legal right and [3] meets 1 or more of the . . . criteria” 

listed in Rule 42 subparts (b)(i)-(v).4 Supreme Court Rule 42(b)(i) incorporates by 

reference “the criteria applicable to proceedings for certification of questions of law set 

forth in Rule 41.”5 Among the criteria in Supreme Court Rule 41 for certification of 

questions of law are that “[t]he question of law is of first instance in this State” or that 

“[t]he decisions of the trial courts are conflicting upon the question of law.”6 

II. ANALYSIS

Plaintiffs assert three arguments for why the Opinion meets the criteria set forth in 

Rule 42(b)(i)-(v). For the reasons explained below, I conclude that each of these 

arguments is without merit. Thus, I deny Plaintiffs‟ application for failure to satisfy any 

of the criteria in Rule 42(b)(i)-(v) without deciding whether the Opinion determines a 

substantial issue and/or establishes a legal right. 

First, Plaintiffs argue that the Opinion decides an original question of law, to wit, 

“whether a particularly restrictive interpretation of a fiduciary-out provision excuses a 

board from their Revlon duties, such that the board may reject a financially superior offer 

based on antitrust concerns, without fully informing themselves of those antitrust

 

4

Supr. Ct. R. 42(b).

5

Supr. Ct. R. 42(b)(i).

6

Supr. Ct. R. 41(b)(i)-(ii).
In re Family Dollar Stores, Inc. Stockholder Litigation

Consolidated C.A. No. 9985-CB

January 2, 2015

Page 4 of 8

concerns and without negotiating terms that might diminish or eliminate those 

concerns.”

7

I disagree. The Opinion did not decide an original question of law in my 

view. Rather, as members of this Court have done for nearly 30 years since Revlon8 was 

decided, the Opinion simply applied well-established legal principles emanating from 

Revlon to a particular set of facts. 

In particular, I concluded in the Opinion “that the Board‟s decision not to engage 

in discussions with General in response to its Revised Offer was a reasonable exercise of 

judgment consistent with the directors‟ obligations under Revlon to maximize value for 

Family‟s stockholders.”9 I reached this conclusion “taking into account the framework of 

the fiduciary out provision in the Merger Agreement,”10 and based on numerous other 

facts of record, including facts demonstrating that (1) the Board was motivated to 

maximize Family‟s value,11 (2) the Board had been specifically advised that General‟s 

 

7 Appl. for Certification of Interlocutory Appeal 12-13.

8

Revlon, Inc. v. MacAndrews & Forbes Hldgs., Inc., 506 A.2d 173 (Del. 1986).

9 Opinion at *13.

10 Id. at *16. Notably, Plaintiffs do not contend that the fiduciary out provision in the 

merger agreement was not customary, do not advance an alternative reading of that 

provision from the one set forth in the Opinion, and do not identify any legal authority 

suggesting that I misinterpreted the provision.

11 Id. at *12-13.
In re Family Dollar Stores, Inc. Stockholder Litigation

Consolidated C.A. No. 9985-CB

January 2, 2015

Page 5 of 8

$80 offer had only an approximately 40% chance of obtaining antitrust approval,

12 (3) the 

Board, after receiving advice from its financial and legal advisors, reasonably determined 

that the level of divestitures General had proposed in connection with its $80 offer was so 

far below the level necessary to sufficiently address the antitrust risk of a Family/General 

combination that it was not prudent or appropriate to open negotiations with General,

13

and (4) the Board was adequately informed in assessing the antitrust risks associated with 

General‟s $80 offer even though General‟s pricing information was not available to it.14

Second, Plaintiffs argue that “[t]he Opinion . . . directly conflicts with the Court‟s 

opinion in Koehler v. NetSpend Holdings Inc.,

[15]

by holding that the directors need to 

only be adequately informed rather than fully informed when deciding to reject a 

financially superior offer from a third-party.”16 In my view, this argument is one of 

semantics as there is no genuine conflict between the Opinion and NetSpend in their 

respective analyses of a Delaware director‟s obligation to be informed when making a 

decision in the context of fulfilling one‟s obligations under Revlon. 

 

12 Id. at *16.

13 Id. at *16-18.

14 Id. at *18.

15 2013 WL 2181518 (Del. Ch. May 21, 2013). 

16 Appl. for Certification of Interlocutory Appeal 13.
In re Family Dollar Stores, Inc. Stockholder Litigation

Consolidated C.A. No. 9985-CB

January 2, 2015

Page 6 of 8

In the Opinion, I quoted from the Supreme Court‟s decision in Paramount 

Communications Inc. v. QVC Network Inc., to explain that the Family directors‟ 

obligations under Revlon placed “the burden [on them] to show that, when they made the 

decision(s) at issue, they „were adequately informed and acted reasonably.‟”17 Later in 

the Opinion, when discussing that General‟s pricing information was confidential and 

thus was not reasonably available to the Board when General surfaced as a competing 

bidder, I further explained, quoting from the Supreme Court‟s decision in Aronson v. 

Lewis, that “Family‟s directors were obligated to „inform themselves, prior to making a 

business decision, of all material information reasonably available to them.‟”18 

In NetSpend, the Court explained that under the “middle-ground review” of 

Revlon, “the directors have the burden of proving that they were fully informed and acted 

reasonably.”19 In doing so, the Court cited QVC, which elaborates on the directors‟ duty 

to be informed under Revlon in a manner similar to the Opinion, as follows: 

In particular, this Court has stressed the importance of the board being 

adequately informed in negotiating a sale of control: “The need for 

adequate information is central to the enlightened evaluation of a 

transaction that a board must make.” This requirement is consistent with 

the general principle that “directors have a duty to inform themselves, prior 

 

17 Opinion at *12 (quoting Paramount Commc’ns Inc. v. QVC Network Inc., 637 A.2d 34, 

45 (Del. 1994)).

18 Opinion at *18 (quoting Aronson v. Lewis, 473 A.2d 805, 812 (Del. 1984)(emphasis 

added)).

19 NetSpend, 2013 WL 2181518, at *11.
In re Family Dollar Stores, Inc. Stockholder Litigation

Consolidated C.A. No. 9985-CB

January 2, 2015

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to making a business decision, of all material information reasonably 

available to them.”20

Given NetSpend‟s explicit reliance on QVC, and the lack of any indication in the opinion 

that the Court intended to draw a distinction between being “fully informed” and 

“adequately informed,” I see no substantive difference between the legal standard 

articulated in the Opinion and in NetSpend. More to the point, nothing in NetSpend, 

supports the illogical notion implicit in Plaintiffs‟ certification argument here that a 

board‟s duty to be informed in the context of a sale of control would require that the 

board consider information (e.g., General‟s pricing data) that is not reasonably available 

to it.

Finally, relying on Supreme Court Rule 42(b)(iii), Plaintiffs argue that 

interlocutory appellate review of the Opinion is appropriate because “it involves 

substantial issues and such review by the Supreme Court would serve the considerations 

of justice.”21 The criterion for interlocutory review in Rule 42(b)(iii) requires that:

[1] An order of the trial court has reversed or set aside a prior decision of 

the court, a jury, or an administrative agency from which an appeal was 

taken to the trial court which had determined a substantial issue and 

established a legal right, and [2] a review of the interlocutory order may 

terminate the litigation, substantially reduce further litigation, or otherwise 

serve considerations of justice.22

 

20 QVC, 637 A.2d at 44 (internal citations omitted).

21 Appl. for Certification of Interlocutory Appeal 13.

22 Supr. Ct. R. 42(b)(iii) (emphasis added).
In re Family Dollar Stores, Inc. Stockholder Litigation

Consolidated C.A. No. 9985-CB

January 2, 2015

Page 8 of 8

Plaintiffs do not (and cannot) argue that the Opinion “reversed or set aside a prior 

decision of the court, a jury, or an administrative agency.”23 Accordingly, the first of the 

two required elements of Rule 42(b)(iii) is not met here.24

* * * * * 

Because Plaintiffs‟ application fails to satisfy any of the requirements for 

certification set forth in Rule 42(b)(i)-(v) for the reasons explained above, I deny 

Plaintiffs‟ application for certification of an interlocutory appeal.

IT IS SO ORDERED.

Sincerely,

/s/ Andre G. Bouchard

Chancellor

AGB/gp

 

23 Id.

24 Archstone P’rs, L.P. v. Lichtenstein, 2009 WL 2031785, at *5 (Del. Ch. July 10, 2009) 

(finding that Rule 42(b)(iii) was not met where “Plaintiffs . . . utterly and completely 

fail[ed] to establish that the June 19 Order „reversed or set aside a prior decision of the 

court, a jury, or an administrative agency‟”) (citation omitted).