Chancery Keeps Alive Suit Over $553M CD&R Deal Windfall

Law360 (February 10, 2020, 2:57 PM EST) -- The Delaware Chancery Court refused Monday to dismiss a suit accusing Clayton Dubilier & Rice LLC of steering a construction industry supplier it controlled into a $1.2 billion merger with a firm that CD&R had bought for $683 million just three months earlier, leading to a $553 million windfall.

Vice Chancellor J. Travis Laster found in a 67-page ruling that stockholders who sued had a reasonable enough argument to keep alive claims that private equity firm CD&R and eight directors of affiliate NCI Building Systems Inc. breached their fiduciary duties to NCI in the deal by agreeing to pay a 94%,...

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