Opinion ID: 2321828
Heading Depth: 1
Heading Rank: 7

Heading: The Merits Opinion and The Side Letter Opinion

Text: In December 2009, the Court of Chancery conducted a separate trial on the merits of the Section 225 claims. In its Merits Opinion, handed down on July 23, 2010, the trial court determined that the Trump Group lawfully possessed a majority voting interest and the resulting right to elect the majority of Trans-Resources' board. [22] Specifically, the Court of Chancery found that Genger never notified the Trump Group of the 2004 Transfers until June 13, 2008. [23] Nor did the Trump Group ever ratify the 2004 Transfers after that disclosure, for two separate reasons. First, the Trump Group repeatedly and steadfastly took the position that the 2004 Transfers had occurred in violation of the Stockholders Agreement. [24] Second, Genger failed to prove that the Trump Group had benefited in any way that suggests ratification, especially given Genger's repudiation of the 2008 Funding Agreement before it was ever signed. [25] Finally, the Court of Chancery held that even if the Trump Group had implicitly ratified the 2004 Transfers, the Trump Group still had lawful voting control of Trans-Resources, because they acquired the Sagi Trust Shares free of the Irrevocable Proxy. [26] The Trump Group, therefore, owned the Sagi Trust Shares by virtue of the 2008 Purchase Agreement, unburdened by any right of Genger to vote those Shares. That 2008 acquisition gave the Trump Group majority voting control of Trans-Resources and the concomitant right to designate and elect four of the company's six directors. Two weeks later, after issuing its Merits Opinion, the Court of Chancery issued a supplemental opinion (the Side Letter Opinion) on August 9, 2010. [27] The Side Letter Opinion addressed the ownership of the Trans-Resources shares purportedly transferred to the Orly Trust (the Orly Trust Shares) and to Genger (the Genger Shares) in the 2004 Transfers. In the Side Letter Opinion, the Vice Chancellor acknowledged that the Orly Trust was not formally before the court in any capacity. [28] The court determined, nonetheless, that neither Genger nor the Orly Trust beneficially owned any Trans-Resources shares. [29] Rather, the Genger Shares and the Orly Trust Shares continued to be owned by TPR, with the result that Trans-Resources need not recognize Genger or the Orly Trust as stockholders. [30] Therefore, under the Side Letter Agreement, the Trump Group was entitled to vote both the Genger Shares and the Orly Trust Shares, and thereby elect the remaining two members of the six-person Trans-Resources board. [31] Genger has appealed from the final judgment that flows from all three of these opinionsthe Spoliation, the Merits, and the Side Letter Opinions.