Atallah v. Malone

COURT OF CHANCERY
OF THE
SAM GLASSCOCK III STATE OF DELAWARE COURT OF CHANCERY COURTHOUSE
VICE CHANCELLOR 34 THE CIRCLE
GEORGETOWN, DELAWARE 19947
Date Submitted: April 12, 2023
Date Decided: April 12, 2023
Stephen E. Jenkins, Esquire Joseph O. Larkin, Esquire
F. Troupe Mickler, Esquire Matthew P. Majarian, Esquire
ASHBY & GEDDES, P.A. Rupal K. Joshi, Esquire
500 Delaware Avenue, 8th Floor SKADDEN, ARPS, SLATE,
Wilmington, DE 19899 MEAGHER & FLOM LLP
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899
Kevin R. Shannon, Esquire
Tyler J. Leavengood, Esquire
Jaclyn C. Levy, Esquire
Michael C. Gorski, Jr., Esquire
Lucille E. Wiesner, Esquire
POTTER ANDERSON & CORROON LLP
1313 N. Market Street
Hercules Plaza, 6th Floor
Wilmington, DE 19801
Bradley R. Aronstam, Esquire
S. Reiko Rogozen, Esquire
Roger S. Stronach, Esquire
ROSS ARONSTAM & MORITZ LLP
Hercules Plaza
1313 North Market Street, Suite 1001
Wilmington, Delaware 19801
Andrew H. Sauder, Esquire
DAILEY LLP
1201 N. Orange St., Suite 7300
Wilmington, DE 19801
Re: Atallah, et al., v. Malone, et al., C.A. No. 2021-1116-SG
Dear Counsel:
This matter is before me on all Defendants’ motion to dismiss. This is a
derivative action involving an alleged controller that arises out of a complex
contractual scheme. As a result, it will require some consideration before I can issue
a comprehensive written opinion.
Nonetheless, the motion to dismiss by Defendants Michael A. George and
Evan D. Malone (the “Non-Committee Directors”) under Rule 12(b)(6) and In re
Cornerstone was not opposed by Plaintiffs in their answering brief or at oral
argument.1 Upon review of the complaint, I find that no sufficient pleading has been
made as to these two director defendants under Cornerstone.
The Non-Committee Directors are not alleged to be interested in the
transactions at issue or to have acted in bad faith. I assume for the purposes of this
letter opinion that neither of these directors were independent of Defendant John C.
Malone but, as such, the Non-Committee Directors were excluded from the special
committees of the board that took the actions at issue. They are not alleged to have
acted to advance John Malone’s self-interest (or those of his co-Defendant, Gregory
B. Maffei). Thus, the complaint fails to state a cause of action under Cornerstone.
1
In re Cornerstone Therapeutics Inc. S’holder Litig., 115 A.3d 1173 (Del. 2015).
1
The Non-Committee Directors should not be left in this action pending my
decision on the remaining motions. Accordingly, I dismiss them here.
To the extent the foregoing requires an Order to take effect, IT IS SO
ORDERED.
Sincerely,
/s/ Sam Glasscock III
Vice Chancellor
2