Opinion ID: 588840
Heading Depth: 2
Heading Rank: 2

Heading: The Loss-of-State-Law-Remedy Theory

Text: 27 The minority shareholders in Virginia Bankshares derived their second theory of causation from Virginia's law of postmerger ratification. They noted that minority approval, though unneeded to authorize the transaction, would preclude a minority suit attacking the merger based on the alleged conflict of interest on the part of a director of the merged corporation. They argued that causation should be recognized when a misleading proxy statement induces minority shareholders to forfeit such a state-law remedy. 28 The Court in Virginia Bankshares, although not rejecting this theory, declined to decide its merits. The Court found that there is no indication in the law or facts before us that the proxy solicitation resulted in any such loss [of the state law remedy], Virginia Bankshares, 501 U.S. at ----, 111 S.Ct. at 2765-66, 115 L.Ed.2d at 954-55, because a favorable minority vote induced by a materially misleading proxy solicitation would not, under Virginia law, render the transaction invulnerable to such later attack by the minority. 4