Smollar v. PotarazuAnnotate this Case
Plaintiff brought his derivative action on behalf of a Corporation against the Corporation’s CEO. The parties entered into a settlement agreement that embodied much of the relief sought by Plaintiff. Under the settlement agreement, however, the Corporation committed to buy Plaintiff’s corporate stock at the price Plaintiff paid fifteen years ago. This opportunity was not available to other Corporation stockholders. Other Corporation stockholders objected to the settlement. The Court of Chancery refused to approve the settlement, holding that Plaintiff’s achievements for the benefit of the Corporation were significantly outweighed by the concerns raised by the unique benefits accruing solely to Plaintiff.