Voege v. Smith

On Motion for Reargument

The motion for reargument is denied.

Plaintiffs assert that the court has overlooked the facts included in the moving affidavit and the letter of plaintiffs’ attorney of June 9, 1971, establishing that in the Sanders-Riklis litigation Glen Alden had valued the Schenley stock at $54 per share. These facts were not overlooked and were indeed discussed in the following paragraph of the original opinion:

“As a subordinate argument, plaintiffs contend that Glen Alden is es-topped from contending that a lesser price per share is fair because, in connection with the August 1968 tender offer, stockholders of Glen Alden sought to enjoin the offer on the ground that it was a waste of Glen Alden’s assets, and Glen Alden asserted in that litigation that the price of $53.33% per common share was fair and reasonable. This argument may be disposed of summarily since, while Glen Alden might be estopped on a showing that the present factual situation is substantially identical to that which existed in 1968, no such showing has been made (other than a conclusory allegation in the complaint), and it is highly doubtful that such a showing can be made.”

On the motion for reargument the plaintiffs contend that the present factual situation is substantially identical to that which existed in 1968 or 1969. But I do not find that the record supports such an assertion. The remarks of Meshulam Riklis, Chairman of the Board of Glen Alden, excerpted from page 34 of Forbes Magazine of March 15, 1971, submitted by plaintiffs on this motion (to the effect that he regarded Schenley as a money-making machine), hardly rise to the dignity of evidence necessary to the delicate comparison of present and past values in changed circumstances.

Even if the contentions presently made by plaintiffs were accepted, the disposition of the matter would not be altered.

In my earlier opinion I stressed that, even if it were assumed that the jurisdictional allegation of misrepresentation had been adequately stated, plaintiffs had not demonstrated the probability of success on the merits nor had they established irreparability of damage. These views are substantially strengthened by the decision, handed down June 15, 1971 (the day after my opinion) by Vice Chancellor Marvel in David J. Greene & Co., et al. v. Schenley Industries, Inc,, Civil Action No. 3542, in the Court of Chancery of the State of Delaware in and for New Castle County, denying, in a companion ease, a motion to enjoin the Schenley-Glen Alden merger. Finding that the plaintiffs there, as I have found to be the ease here, had rights of appraisal, the Vice Chancellor remarked:

“ * * * plaintiffs have not shown that they will be irreparably damaged if an injunction does not issue in that their relief clearly lies in an appraisal proceeding.
“While a court of equity should stand ready to prevent corporate fraud and the overreaching by fiduciaries of the rights of stockholders, Bennett v. Breuil [Petroleum Corporation], 34 Del.Ch. 6, 99 A.2d [236] 336, by the same token this Court should not impede the consummation of an orderly merger under the Delaware statutes, an efficient and fair method having been furnished, which permits a judicially protected withdrawal from the merger by a disgruntled stockholder, MacFarlane v. North American Cement Corporation, 16 Del.Ch. 172, 157 A. 396.”

*186It is to be observed that between the filing and return day of this motion to reargue the Schenley-Glen Alden merger has been consummated. While this significant fact may not bar plaintiffs as a matter of law from pressing their prayer for relief, it is now impossible for the court to enjoin the merger even were that justified, which it is not.

The motion for reargument is denied.

It is so ordered.