Court Opinion

ID: 9647431
Source: CourtListenerOpinion
Date Created: 2023-08-23 13:36:14.228738+00
Date Added: 2024-06-11T18:11:49.384166
License: Public Domain

ON MOTION FOR REARGUMENT OR REHEARING EN BANC
Submitted: July 8, 1988
Anadarko seeks reargument on related contentions. First, Anadarko argues that by relying on the Information Statement to support the conclusion that a fiduciary relationship did not exist between Anadarko’s directors and its prospective stockholders, this Court has implicitly recognized the proposition that disclosure can relieve a director of the duty of loyalty. Second, Anadarko contends that if disclosure can relieve a director of the duty of loyalty, it is important for this Court, upon reconsideration, to establish a clear test for adequacy of disclosure. Finally, Anadarko seeks the opportunity to litigate the factual adequacy of disclosure upon remand to the Court of Chancery.
Contrary to Anadarko’s claims, the ruling in the principal opinion, when confined to its specific facts, is not inconsistent with a director’s duty of loyalty nor does it stand for the proposition that disclosure is a substitute for loyalty. As the opinion *1178makes clear, under the circumstances of this case the corporate parent’s ownership interest was not legally divisible before the date of distribution for purposes of imposing fiduciary duties on Anadarko’s former directors. The relevant inquiry is thus twofold: to whom is the fiduciary duty owed and at what time. Our ruling is specifically confined to Anadarko’s claim that, under Delaware corporate law, a fiduciary relationship existed between Anadar-ko’s board and its prospective stockholders prior to the issue date of the expected shares. We have concluded that the duty of loyalty arises only upon establishment of the underlying relationship.
Finally, we note that the viability of Ana-darko’s claim of nondisclosure, assertable as a federal cause of action, is not before us. Our ruling is confined to claims against corporate directors arising out of an alleged fiduciary relationship.
Given the narrow confines of our holding we find no basis for reargument. Accordingly, the motion for reargument is DENIED.