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Corporations Keyed to Hamilton
Smith v. Van Gorkom
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*Case Brief Anatomy includes: Brief Prologue, Complete Case Brief, Brief Epilogue
- The Brief Prologue provides necessary case brief introductory information and includes:
- Topic: Identifies the topic of law and where this case fits within your course outline.
- Parties: Identifies the cast of characters involved in the case.
- Procedural Posture & History: Shares the case history with how lower courts have ruled on the matter.
- Case Key Terms, Acts, Doctrines, etc.: A case specific Legal Term Dictionary.
- Case Doctrines, Acts, Statutes, Amendments and Treatises: Identifies and Defines Legal Authority used in this case.
- The Case Brief is the complete case summarized and authored in the traditional Law School I.R.A.C. format. The Pro case brief includes:
- Brief Facts: A Synopsis of the Facts of the case.
- Rule of Law: Identifies the Legal Principle the Court used in deciding the case.
- Facts: What are the factual circumstances that gave rise to the civil or criminal case? What is the relationship of the Parties that are involved in the case. Review the Facts of this case here:
Trans Union had large investment tax credits (ITCs) coupled with accelerated depreciation deductions with no offsetting taxable income. Their short term solution was to acquire companies that would offset the ITCs, but the Chief Financial Officer, Donald Romans, suggested that Trans Union should undergo a leveraged buyout to an entity that could offset the ITCs. The suggestion came without any substantial research, but Romans thought that a $50-60 share price (on stock currently valued at a high of $39 ½) would be acceptable. Van Gorkom did not demonstrate any interest in the suggestion, but shortly thereafter pursued the idea with a takeover specialist, Jay Pritzker. With only Romans’ unresearched numbers at his disposal, Van Gorkom set up an agreement with Pritzker to sell Pritzker Trans Union shares at $55 per share. Van Gorkom also agreed to sell Pritzker one million shares of Trans Union at $39 per share if Pritzker was outbid. Van Gorkom also agreed not to solicit other bids and agreed not to provide proprietary information to other bidders. Van Gorkom only included a couple people in the negotiations with Pritzker, and most of the senior management and the Board of Directors found out about the deal on the day they had to vote to approve the deal. Van Gorkom did not distribute any information at the voting, so the Board had only the word of Van Gorkom, the word of the President of Trans Union (who was privy to the earlier discussions with Pritzker), advice from an attorney who suggested that the Board might be sued if they voted against the merger, and vague advice from Romans who told them that the $55 was in the beginning end of the range he calculated. Van Gorkom did not disclose how he came to the $55 amount. On this advice, the Board approved the merger, and it was also later approved by shareholders.
- Issue(s): Lists the Questions of Law that are raised by the Facts of the case.
- Holding: Shares the Court's answer to the legal questions raised in the issue.
- Concurring / Dissenting Opinions: Includes valuable concurring or dissenting opinions and their key points.
- Reasoning and Analysis: Identifies the chain of argument(s) which led the judges to rule as they did.
- The Brief Prologue closes the case brief with important forward-looking discussion and includes:
- Policy: Identifies the Policy if any that has been established by the case.
- Court Direction: Shares where the Court went from here for this case.