COURT OF CHANCERY
OF THE
STATE OF DELAWARE
KATHALEEN ST. JUDE MCCORMICK LEONARD L. WILLIAMS JUSTICE CENTER
CHANCELLOR 500 N. KING STREET, SUITE 11400
WILMINGTON, DELAWARE 19801-3734
July 2, 2021
Gregory V. Varallo, Esquire Raymond J. DiCamillo, Esquire
Bernstein Litowitz Berger & Kevin M. Gallagher, Esquire
Grossman LLP Megan O’Connor, Esquire
500 Delaware Avenue, Suite 901 Richards, Layton & Finger, P.A.
Wilmington, DE 19801 920 North King Street
Wilmington, DE 19801
Blake A. Bennett, Esquire
Dean R. Roland, Esquire Kevin M. Coen, Esquire
Cooch and Taylor P.A. Alexandra M. Cumings, Esquire
The Nemours Building Morris, Nichols, Arsht & Tunnell LLP
1000 N. Orange St., Suite 1120 1201 North Market Street, Suite 1600
Wilmington, DE 19801 Wilmington, DE 19801
Elena C. Norman, Esquire Brian C. Ralston, Esquire
Alberto E. Chavez, Esquire David A. Seal, Esquire
Young Conaway Stargatt & Taylor LLP Daniel M. Rusk, IV, Esquire
Rodney Square Potter Anderson & Corroon LLP
1000 North King Street 1313 North Market Street
Wilmington, DE 19801 P.O. Box 951
Wilmington, DE 19801
Re: Hollywood Firefighters’ Pension Fund, et al. v. James L. Dolan, et
al., C.A. No. 2021-0468-KSJM;
Leisz v. MSG Networks Inc., et al., C.A. No. 2021-0504-KSJM
Dear Counsel:
I have considered briefing and oral argument on the plaintiffs’ respective motions
to preliminarily enjoin the stockholder vote on the proposed merger of Madison Square
Garden Entertainment Corp. (“Entertainment”) and MSG Networks Inc. (“Networks”).
The motions are DENIED.
C.A. No. 2021-0468-KSJM
C.A. No. 2021-0504-KSJM
July 2, 2021
Page 2 of 3
The plaintiffs in the above-referenced actions base their respective motions on
alleged violations of Section 203 of the Delaware General Corporation Law.
I find that the proposed merger does not violate the Section 203 protections of the
Entertainment stockholders because the Entertainment board satisfied the
Section 203(a)(1) exception by approving the transaction which resulted in Networks
becoming an interested stockholder through the unanimous written consent executed on
November 21, 2019.
I find that the proposed merger does not violate the Section 203 protections of the
Networks stockholders because the relevant three-year moratorium expired in 2013. The
Dolan Family Group (as that term is defined in the briefs for C.A. No. 2021-0504-KSJM)
became an “interested stockholder” of Networks when it acquired over 15% of Networks
stock in 2010. Thus, the three-year moratorium imposed on the Dolan Family Group
expired in 2013. Entertainment became an “interested stockholder” of Networks in 2019
solely by virtue of its relationship with the Dolan Family Group. The purpose of the
statutory language by which Entertainment fits the definition of “interested stockholder” is
to prohibit a holder of 15% or more of Networks’ stock from accomplishing indirectly what
it is prohibited from accomplishing directly. In these limited circumstances, and where
there are no allegations that the defendants are taking action to subvert the purpose of the
statute, the restrictions imposed on Entertainment (the affiliate) must track those applicable
to those of the Dolan Family Group (the Networks stockholder).
C.A. No. 2021-0468-KSJM
C.A. No. 2021-0504-KSJM
July 2, 2021
Page 3 of 3
Obviously, a lot more could be said on the rich issues presented. Given the
proximity of the stockholder vote and the long holiday weekend ahead, I thought it
appropriate to deliver my rulings to you as quickly as possible, hence this brief letter.
Please contact my assistant to obtain a time on Tuesday, July 6, 2021, during which I will
explain the bases for this ruling in slightly greater detail.
I wish you all a safe and restful holiday weekend.
IT IS SO ORDERED.
Sincerely,
/s/ Kathaleen St. Jude McCormick
Kathaleen St. Jude McCormick
Chancellor
cc: All counsel of record (by File & ServeXpress)