In re Appraisal of Transkaryotic Therapies, Inc.
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WILLIAM B. CHANDLER III CHANCELLOR COURT OF CHANCERY OF THE STATE OF DELAWARE COURT OF CHANCERY COURTHOUSE 34 THE CIRCLE GEORGETOWN, DELAWARE 19947 Submitted: May 8, 2006 Decided: May 10, 2006 Arthur L. Dent Potter Anderson & Corroon LLP 1313 North Market Street Wilmington, DE 19899 Daniel A. Dreisbach Richards, Layton & Finger, P.A. One Rodney Square P.O. Box 551 Wilmington, DE 19899 Re: In re: Appraisal of Transkaryotic Therapies, Inc. Civil Action No. 1554-N Dear Counsel: In light of a rapidly approaching July 28 discovery completion date in this appraisal action, petitioners seek this Court s guidance in respect to a dispute regarding a proposed confidentiality order. The parties have narrowed their dispute to one issue: whether the confidentiality order should contain a single confidentiality tier or should provide for a second, highly confidential designation limiting the review of materials so designated solely to counsel and experts. Respondent Shire Human Genetic Therapies, Inc., formerly known as Transkaryotic Therapies, Inc. ( TKT or the Company ) provides two justifications for a two-tiered confidentiality order. First, the Company s business, which relates primarily to research, development and production of pharmaceutical products, is by its nature highly sensitive, such that the misuse of highly confidential materials is especially likely to cause significant and irreparable harm to the Company. Second, the petitioners are significant institutional investors and/or market arbitrageurs, with the ability to make and execute trading decisions (including trading the securities of the Company s competitors, entities that may be potential acquisition targets or potential acquirers of the Company s parent) on the basis of information learned through discovery in this action. I find these reasons unpersuasive. First, misuse of the Company s sensitive information will be adequately protected by the proposed one-tier confidentiality order, in the same way that similar single-tiered orders have protected sensitive information in countless other appraisal actions. Second, the securities laws themselves protect the Company and the market from the possibility of petitioners and their affiliates trading improperly on insider information. Finally, I note that there are no extraordinary circumstances here that would justify the added complexity, and undue burden on petitioners, of a two-tiered confidentiality order. IT IS SO ORDERED. Very truly yours, William B. Chandler III WBCIII:bsr 2
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