Chancery Throws Out $800M Morgans Hotel Deal Challenge
Law360, Wilmington (October 24, 2017, 9:15 PM EDT) -- A Delaware Chancery judge on Tuesday threw out a challenge to the Morgans Hotel Group Co.’s $800 million merger with hotel management firm SBEEG Holdings LLC, ruling that the suing shareholders hadn’t shown that former Morgans director Ron Burkle and his Yucaipa Cos. controlled and had a fiduciary duty to the company.
In a seven-page order, Vice Chancellor J. Travis Laster dismissed all three counts in the consolidated lawsuit from several Morgans shareholders, who alleged that the SBEEG merger not only deeply undervalued Morgans, but handed too many benefits to Yucaipa that common shareholders couldn't share.
The suing shareholders had aimed their...
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