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In re Family Dollar Stores, Inc. Stockholder Litigation

Court of Chancery of Delaware, New Castle

January 2, 2015

In re Family Dollar Stores, Inc. Stockholder Litigation

Submitted: December 31, 2014.

Seth D. Rigrodsky, Esquire Brian D. Long, Esquire Gina M. Serra, Esquire Rigrodsky & Long, P.A.

Peter B. Andrews, Esquire Craig J. Springer, Esquire Andrews & Springer LLC

William M. Lafferty, Esquire John P. DiTomo, Esquire Lauren K. Neal, Esquire Morris, Nichols, Arsht & Tunnell LLP

Gregory P. Williams, Esquire A. Jacob Werrett, Esquire J. Scott Pritchard, Esquire Richards, Layton & Finger, P.A.

Dear Counsel:

On December 24, 2014, Plaintiffs filed an application for certification of an interlocutory appeal from the memorandum opinion I issued on December 19, 2014, denying Plaintiffs' motion to preliminarily enjoin the stockholder vote on the proposed merger between Family Dollar Stores, Inc. ("Family") and Dollar Tree, Inc. ("Tree").[1]

As discussed in the Opinion, Dollar General, Inc. ("General") emerged as a competing bidder for Family after it had entered a merger agreement with Tree. This prompted Plaintiffs to seek to preliminarily enjoin the stockholder vote on the proposed merger, which originally was scheduled for December 23, 2014, "[1] until the Board has properly engaged with [General] and made a good faith effort to achieve a value-maximizing transaction, and [2] until corrective disclosures have been made."[2] On December 23, 2014, the stockholder meeting was adjourned until January 22, 2015. According to Family's public filings, the proposed merger cannot be consummated until February 2015.

For the reasons explained below, I deny Plaintiffs' application for failure to satisfy the requirements of Supreme Court Rule 42(b) for pursuing an interlocutory appeal.

I. LEGAL STANDARD

"Applications for certification of an interlocutory appeal require the exercise of the trial court's discretion and are granted only in extraordinary or exceptional cases."[3]Under Supreme Court Rule 42, "[n]o interlocutory appeal will be certified by the trial court or accepted by [the Supreme] Court unless the order of the trial court [1] determines a substantial issue, [2] establishes a legal right and [3] meets 1 or more of the . . . criteria" listed in Rule 42 subparts (b)(i)-(v).[4] Supreme Court Rule 42(b)(i) incorporates by reference "the criteria applicable to proceedings for certification of questions of law set forth in Rule 41."[5] Among the criteria in Supreme Court Rule 41 for certification of questions of law are that "[t]he question of law is of first instance in this State" or that "[t]he decisions of the trial courts are conflicting upon the question of law."[6]

II. ANALYSIS

Plaintiffs assert three arguments for why the Opinion meets the criteria set forth in Rule 42(b)(i)-(v). For the reasons explained below, I conclude that each of these arguments is without merit. Thus, I deny Plaintiffs' application for failure to satisfy any of the criteria in Rule 42(b)(i)-(v) without deciding whether the Opinion determines a substantial issue and/or establishes a legal right.

First, Plaintiffs argue that the Opinion decides an original question of law, to wit, "whether a particularly restrictive interpretation of a fiduciary-out provision excuses a board from their Revlon duties, such that the board may reject a financially superior offer based on antitrust concerns, without fully informing themselves of those antitrust concerns and without negotiating terms that might diminish or eliminate those concerns."[7] I disagree. The Opinion did not decide an original question of law in my view. Rather, as members of this Court have done for nearly 30 years ...


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