The Ravenswood Investment Company L.P. v. Winmill & Co. Incorporated

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
JOHN W. NOBLE 417 SOUTH STATE STREET
VICE CHANCELLOR DOVER, DELAWARE 19901
TELEPHONE: (302) 739-4397
FACSIMILE: (302) 739-6179
December 31, 2014
R. Bruce McNew, Esquire David A. Jenkins, Esquire
Wilks, Lukoff & Bracegirdle, LLC Smith Katzenstein & Jenkins LLP
1300 N. Grant Avenue, Suite 100 800 Delaware Avenue, Suite 1000
Wilmington, DE 19806 Wilmington, DE 19801
Re: The Ravenswood Investment Company, L.P. v.
Winmill & Co. Incorporated
C.A. No. 7048-VCN
Date Submitted: September 22, 2014
Dear Counsel:
I write to address what I understand, based on your letters of September 22,
to be the two continuing topics of dispute regarding a confidentiality agreement to
facilitate the implementation of the Court’s May 30, 2014, letter opinion.1 These
issues concern (i) the appropriate scope of confidentiality and (ii) indemnification
for losses resulting from violations or alleged violations of federal or state
securities laws.
1
The Ravenswood Inv. Co., L.P. v. Winmill & Co., Inc., 2014 WL 2445776 (Del.
Ch. May 30, 2014).
The Ravenswood Investment Company, L.P. v.
Winmill & Co. Incorporated
C.A. No. 7048-VCN
December 31, 2014
Page 2
Winmill has demonstrated that some confidentiality protection is
appropriate.2 Although the passage of time does not necessarily render
confidential treatment unnecessary, it is a starting point for analysis. Materiality of
financial information—which is the fundamental issue—lessens as it ages. As
with most line drawing efforts, a precisely correct moment in time is difficult to
set. One year after the production to Ravenswood3 (or, if earlier, when it becomes
public information) is a reasonable accommodation of the competing interests.
Additionally, financial information does not warrant confidential treatment after
three years from the date of the document or information.4
As for Winmill’s request for indemnification against federal and state
securities laws claims, the Court understands why Winmill has expressed its
concerns, but is not willing to presume that Ravenswood would violate its duties as
prescribed by those laws. More fundamentally, conditioning a right provided by
2
Yet, this is something of a problem of Winmill’s own creation. Even though it
has public shareholders, it treats its financial information as confidential. In most
comparable circumstances, the financial information would not be accorded
confidential treatment.
3
No extension of these parameters is justified if Ravenswood properly provides the
documents to a third party.
4
Three, instead of four, years would provide sufficient protection.
The Ravenswood Investment Company, L.P. v.
Winmill & Co. Incorporated
C.A. No. 7048-VCN
December 31, 2014
Page 3
8 Del. C. § 220 upon an unlimited and unrestricted indemnification obligation
unduly impairs a shareholder’s rights as conferred by Delaware law. Accordingly,
the Court will not condition Ravenswood’s access to Winmill’s books and records
upon an indemnification undertaking.
With these comments, I assume that counsel can finalize the Confidentiality
and Production Agreement.
Very truly yours,
/s/ John W. Noble
JWN/cap
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