In re PLX Technology Inc. Stockholders Litigation

• Court: Supreme Court of Delaware
• Decided: May 16, 2019
• Docket: 571, 2018
• Status: Published

Opinion

IN THE SUPREME COURT OF THE STATE OF DELAWARE

In re PLX TECHNOLOGY INC. § STOCKHOLDERS LITIGATION § No. 571, 2018 § § Court Below: Court of Chancery § of the State of Delaware § § C.A. No. 9880-VCL §

Submitted: May 15, 2019 Decided: May 16, 2019

Before STRINE, Chief Justice; VALIHURA, VAUGHN, SEITZ, and TRAYNOR, Justices; constituting the Court en Banc.

ORDER

(1) In this case, the Court of Chancery determined in a thorough post-trial

opinion that an activist hedge fund, defendant Potomac Capital Partners II, L.P.

(“Potomac”), aided and abetted a breach of fiduciary duties by the directors of PLX

Technology Inc. (“PLX” or the “Company”) in connection with a sale of the

Company, but that the plaintiffs failed to prove damages.1 In deciding the damages

issue, the Court of Chancery observed that “[t]he plaintiffs theorized that the

Company should have remained a standalone entity and maintained that its value in

that configuration was $9.86 per share,” but they “failed to prove that valuation,

1 In re PLX Technology Inc. S’holders Litig., 2018 WL 5018353 (Del. Ch. Oct. 16, 2018). which was 50% higher than the Merger consideration.”2 As a result, the court

entered judgment for Potomac.

(2) On appeal, the plaintiff-appellants contend that the Court of Chancery

erred in deciding the damages issue by importing principles from our appraisal

jurisprudence to give deference to the deal price. On cross-appeal, Potomac argues

that the Court of Chancery erred in finding (i) a breach of fiduciary duties, (ii) that

Potomac aided and abetted that breach, and (iii) that the stockholder vote was not

fully informed.

(3) As to the damages issue, we affirm the Court of Chancery’s decision

that the plaintiff-appellants did not prove that they suffered damages.

(4) Because our affirmance of the Court of Chancery’s determination that

the plaintiff-appellants did not prove that they suffered damages suffices to affirm

the judgment in favor of Potomac, we need not and therefore do not reach Potomac’s

arguments on cross-appeal. To be clear, that means that we need not and do not

address whether the Court of Chancery was correct in any of its other determinations,

including that Potomac was responsible for any breach of fiduciary duty by any PLX

director or that any underlying fiduciary duty breach occurred, and we affirm solely

on the basis that the Court of Chancery was within its discretion in determining that

the plaintiff-appellants did not prove that they suffered damages.

2 Id. at *2.

2 NOW, THEREFORE, IT IS ORDERED that the judgment of the Court of

Chancery is AFFIRMED.

BY THE COURT: /s/ Leo E. Strine, Jr. Chief Justice