Case Citation
Legal Case Name

FLIEGLER v. LAWRENCE Case Brief

Supreme Court of Delaware1976
361 A.2d 218

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Case Brief Summary & Legal Analysis

General Brief
4 min read

tl;dr: Directors of Agau formed USAC to pursue a corporate opportunity Agau initially rejected. Agau later acquired USAC. The court affirmed the transaction’s intrinsic fairness, despite interested directors, finding shareholder ratification by interested shareholders did not shift the burden of proof, but defendants met it.

Legal Significance: Clarifies that shareholder ratification by interested shareholders does not shift the burden from directors to prove intrinsic fairness in self-dealing transactions under 8 Del.C. § 144, though the statute can sanitize the conflict.

FLIEGLER v. LAWRENCE Law School Study Guide

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Case Facts & Court Holding

Key Facts & Case Background

John C. Lawrence, president of Agau Mines, Inc. (Agau), acquired antimony properties individually. Agau’s board, including Lawrence, determined Agau was financially and legally unable to pursue this opportunity. The properties were transferred to United States Antimony Corporation (USAC), newly formed by Agau’s directors who became majority USAC shareholders. Agau was granted an option to acquire USAC for 800,000 Agau shares, a price intended to reimburse USAC shareholders for development costs. Later, Agau’s board, still comprising the interested directors, resolved to exercise the option. This decision was approved by a majority of Agau shareholders, but the defendants, in their capacity as Agau shareholders, cast the majority of votes in favor. A shareholder derivative suit challenged the transaction, alleging usurpation of corporate opportunity and unfairness in the option exercise. The Court of Chancery found for the defendants. Plaintiff appealed, focusing on the fairness of the option exercise.

Court Holding & Legal Precedent

Issue: Did the interested directors meet their burden of proving the intrinsic fairness of Agau’s acquisition of USAC, and did shareholder ratification by a majority of interested shareholders shift this burden of proof under 8 Del.C. § 144?

Yes, the defendants successfully demonstrated the intrinsic fairness of the transaction. Shareholder Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu f

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IRAC Legal Analysis

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Legal Issue

Did the interested directors meet their burden of proving the intrinsic fairness of Agau’s acquisition of USAC, and did shareholder ratification by a majority of interested shareholders shift this burden of proof under 8 Del.C. § 144?

Conclusion

This case is significant for its interpretation of 8 Del.C. § 144, Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo conse

Legal Rule

When directors stand on both sides of a transaction, they bear the Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing eli

Legal Analysis

The Delaware Supreme Court affirmed the Vice-Chancellor's conclusions. Regarding the corporate opportunity, Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut eni

Flash-to-Full Case Opinions

Flash Summary

  • Corporate Opportunity: Fiduciaries may take a corporate opportunity if it is
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupida

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