Delaware Chancery Court
This litigation involved two sets of claims concerning two separate attempts by Tilman J. Fertitta, CEO and the largest individual shareholder of Landry’s, to take the company private. The plaintiff alleged that Fertitta attempted to steal control of Landry’s by systematically reducing the offering price and then buying the company’s stock on the open market instead of purchasing shares pursuant to and in the merger; it also alleged that Landry’s directors breached their fiduciary duties by failing to protect the public shareholders from real and obvious threats to corporate welfare and complicity in Fertitta’s improper actions. Through a two-part settlement, G&E obtained for the shareholder class a $14.5 million settlement fund as well as the right to sell their shares in a going-private transaction providing at least $24 per share, representing a 62% increase over the merger agreement’s $14.75 per share price. The settlement also provided a virtually unprecedented 45-day go-shop process that could be extended for an additional 15 days, and in order to create an active go-shop process, Landry’s was required to reimburse up to $500,000 in actual out-of-pocket due diligence costs for each of up to the two highest bidders, provided the bidders submitted proposals to acquire the company at a price exceeding $24 per share.