Opinion ID: 3013760
Heading Depth: 2
Heading Rank: 2

Heading: State Fiduciary Duty Claim

Text: The waivability of fiduciary duties owed by a majority shareholder to a minority shareholder is the issue that controls the state law claim. The District Court held that by consenting to the Stockholder’s Agreement, Houston waived Aramark’s duty to disclose future events which would impact the value of Houston’s shares. Under Delaware law, Aramark owed Houston fiduciary duties, Ivanhoe Partners v. Newport Mining Corp., 535 A.2d 1334, 1344 (Del. 1987), but those duties were amendable by contract. See Coleman v. Taub, 638 F.2d 628, 636 (3d Cir. 1981) (noting in the context of a corporate merger that a minority shareholder can “bargain away” his interests, thus eliminating the possibility of a breach of fiduciary duty). Houston bargained away his right to the information specifically at issue here. Houston was a party to the Stockholder’s Agreement, which states that at the time a shareholder sells his shares, there may be proposed or pending an event or a transaction that could affect the Appraisal Price of the Common Stock, and that the Appraisal Price of the Common Stock (and, accordingly, the repurchase price) may be substantially less than the fair market value as of the current date, and further acknowledges and agrees that ARAMARK may have valid business reasons, and in any case shall not be required to, disclose any event or transaction that may have occurred or be proposed or pending at the time of any such sale. It is difficult to imagine a clearer waiver of Aramark’s duty to disclose the impending announcement of its initial public offering. The District Court correctly 9 dismissed Houston’s breach of duty claim. Because we conclude that Houston waived Aramark’s duty to disclose future events, we need not address the issue of the effectiveness of Houston’s release included in the Share Repurchase Agreement. 10