Court Opinion

ID: 9386508
Source: CourtListenerOpinion
Date Created: 2023-04-12 19:03:06.077162+00
Date Added: 2024-06-11T17:18:07.019861
License: Public Domain

COURT OF CHANCERY
                              OF THE
SAM GLASSCOCK III       STATE OF DELAWARE              COURT OF CHANCERY COURTHOUSE
 VICE CHANCELLOR                                                34 THE CIRCLE
                                                         GEORGETOWN, DELAWARE 19947

                      Date Submitted: April 12, 2023
                       Date Decided: April 12, 2023

Stephen E. Jenkins, Esquire             Joseph O. Larkin, Esquire
F. Troupe Mickler, Esquire              Matthew P. Majarian, Esquire
ASHBY & GEDDES, P.A.                    Rupal K. Joshi, Esquire
500 Delaware Avenue, 8th Floor          SKADDEN, ARPS, SLATE,
Wilmington, DE 19899                    MEAGHER & FLOM LLP
                                        One Rodney Square
                                        P.O. Box 636
                                        Wilmington, Delaware 19899

                                        Kevin R. Shannon, Esquire
                                        Tyler J. Leavengood, Esquire
                                        Jaclyn C. Levy, Esquire
                                        Michael C. Gorski, Jr., Esquire
                                        Lucille E. Wiesner, Esquire
                                        POTTER ANDERSON & CORROON LLP
                                        1313 N. Market Street
                                        Hercules Plaza, 6th Floor
                                        Wilmington, DE 19801

                                        Bradley R. Aronstam, Esquire
                                        S. Reiko Rogozen, Esquire
                                        Roger S. Stronach, Esquire
                                        ROSS ARONSTAM & MORITZ LLP
                                        Hercules Plaza
                                        1313 North Market Street, Suite 1001
                                        Wilmington, Delaware 19801

                                        Andrew H. Sauder, Esquire
                                        DAILEY LLP
                                        1201 N. Orange St., Suite 7300
                                        Wilmington, DE 19801
                 Re:    Atallah, et al., v. Malone, et al., C.A. No. 2021-1116-SG

Dear Counsel:

         This matter is before me on all Defendants’ motion to dismiss. This is a

derivative action involving an alleged controller that arises out of a complex

contractual scheme. As a result, it will require some consideration before I can issue

a comprehensive written opinion.

         Nonetheless, the motion to dismiss by Defendants Michael A. George and

Evan D. Malone (the “Non-Committee Directors”) under Rule 12(b)(6) and In re

Cornerstone was not opposed by Plaintiffs in their answering brief or at oral

argument.1 Upon review of the complaint, I find that no sufficient pleading has been

made as to these two director defendants under Cornerstone.

         The Non-Committee Directors are not alleged to be interested in the

transactions at issue or to have acted in bad faith. I assume for the purposes of this

letter opinion that neither of these directors were independent of Defendant John C.

Malone but, as such, the Non-Committee Directors were excluded from the special

committees of the board that took the actions at issue. They are not alleged to have

acted to advance John Malone’s self-interest (or those of his co-Defendant, Gregory

B. Maffei). Thus, the complaint fails to state a cause of action under Cornerstone.

1
    In re Cornerstone Therapeutics Inc. S’holder Litig., 115 A.3d 1173 (Del. 2015).
                                                 1
      The Non-Committee Directors should not be left in this action pending my

decision on the remaining motions. Accordingly, I dismiss them here.

      To the extent the foregoing requires an Order to take effect, IT IS SO

ORDERED.

                                           Sincerely,

                                           /s/ Sam Glasscock III
                                           Vice Chancellor

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