Atallah v. Malone

• Court: Court of Chancery of Delaware
• Decided: April 12, 2023
• Docket: C.A. No. 2021-1116-SG
• Status: Published

Opinion

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