Delaware Court: Merger Process Unfair, But No Breach Of Fiduciary Duty

On August 16, The Delaware Court of Chancery issued its widely anticipated opinion in In re Trados Inc. Shareholder Litigation. Vice Chancellor J. Travis Laster found much to fault in the actions of Trados directors and that they had failed to follow a fair process. But nonetheless, he said, there was no breach of fiduciary duty, the transaction was “entirely fair,” and the defendants met their burden of proof. There are some important takeaways from this decision for venture capital entities, directors and  distressed companies.