Partners v. Superior Well Services, Inc.

86 A.D.3d 431, 926 N.Y.2d 2921

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: July 7, 2011
• Status: Published

Opinion

Defendant established by documentary evidence that the acquisition of more than 50% of its stock and the subsequent merger with Diamond Acquisition Corporation did not constitute a “Fundamental Change” as defined in the certificate of designations, which would have required defendant to provide a fundamental change notice to its preferred shareholders within 10 days of a fundamental change. The tender offer for common shares and defendant’s subsequent merger into Diamond, with defendant being the surviving entity, were two consecutive steps in a single, integrated transaction (see Noddings Inv. Group, Inc. v Capstar Communications, Inc., 1999 WL 182568, 1999 Del Ch LEXIS 56 [Del Ch 1999], affd 741 A2d 16 [Del 1999]).

The plain language of the certificate of designations for the convertible preferred stock unambiguously demonstrated that defendant, a Delaware corporation, did not effect a fundamental change (see Bailey v Fish & Neave, 8 NY3d 523, 528 [2007]). The fact that plaintiffs attached a particular, subjective meaning to the term “transaction” that differed from the term’s plain meaning did not render the term ambiguous (see Slattery Skanska Inc. v American Home Assur. Co., 67 AD3d 1, 15 [2009]; Innophos, Inc. v Rhodia, S.A., 38 AD3d 368, 369 [2007], affd 10 NY3d 25 [2008]). Concur — Andrias, J.P, Sweeny, Renwick, Freedman and Manzanet-Daniels, JJ.