      IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

ARKANSAS TEACHER                          )
RETIREMENT SYSTEM, on Behalf of )
Itself and All Others Similarly Situated, )
                                          )
             Plaintiff,                   )
                                          )
       v.                                 )   C.A. No. 2017-0453-KSJM
                                          )
ALON USA ENERGY, INC., DELEK )
US HOLDINGS, INC., DELEK                  )
HOLDCO, INC., EZRA UZI YEMIN,             )
ILAN COHEN, ASSAF GINZBURG,               )
FREDEREC GREEN, RON W.                    )
HADDOCK, WILLIAM J. KACAL,                )
ZALMAN SEGAL, MAKR D. SMITH, )
AVIGAL SOREQ, FRANKLIN                    )
WHEELER, and DAVID WIESSMAN, )
                                          )
             Defendants.                  )

                         MEMORANDUM OPINION
                         Date Submitted: March 27, 2019
                          Date Decided: June 28, 2019

Michael Hanrahan, Stephen D. Dargitz, Paul A. Fioravanti, Jr., Corinne Elise
Amato, Kevin H. Davenport, Eric J. Juray, PRICKETT, JONES & ELLIOTT, P.A.,
Wilmington, Delaware; Lee D. Rudy, Michael C. Wagner, J. Daniel Albert, Grant
D. Goodhart III, KESSLER TOPAZ MELTZER & CHECK, LLP, Radnor,
Pennsylvania; Counsel for Plaintiff Arkansas Teacher Retirement System.

David J. Teklits, Thomas P. Will, MORRIS, NICHOLS, ARSHT & TUNNELL
LLP, Wilmington, Delaware; Mark Oakes, William Patrick Courtney, Ryan Metzer,
NORTON ROSE FULBRIGHT US LLP, Austin, Texas; Counsel for Defendants
Alon USA Energy, Inc., Delek US Holdings, Inc., Delek HoldCo, Inc., Ezra Uzi
Yemin, Assaf Ginzburg, Frederec Green, Mark D. Smith, and Avigal Soreq.
Raymond J. DiCamillo, Brian F. Morris, Sara C. Hunter, RICHARDS, LAYTON &
FINGER, P.A., Wilmington, Delaware; Colin B. Davis, GIBSON, DUNN &
CRUTCHER LLP, Irvine, California; Mark H. Mixon, Jr., GIBSON, DUNN &
CRUTCHER LLP, New York, New York; Counsel for Defendants David Wiessman,
Ilan Cohen, Ron W. Haddock, William J. Kacal, Zalman Segal, and Franklin
Wheeler.



McCORMICK, V.C.
      Section 203 of the Delaware General Corporation Law prohibits a stockholder

from engaging in a business combination with a company within three years from

the date it acquires 15% or more of the company’s outstanding voting equity. The

statute’s prohibitions do not apply under certain circumstances, including when the

company’s board pre-approves the transaction by which the stockholder acquires

15% or more of the outstanding voting equity.

      In 2015, Delek US Holdings, Inc. (“Delek”) acquired 48% of the common

stock of Alon USA Energy, Inc. (“Alon”) from Alon’s largest stockholder. Delek

paid approximately $16.99 per share. At the time of this stock purchase, Delek was

interested in acquiring the entirety of Alon’s outstanding stock. To avoid the three-

year standstill period imposed by Section 203, Delek requested that the Alon board

pre-approve the stock purchase. Alon’s board granted Section 203 approval, but

conditioned that approval on Delek entering into a stockholder agreement. The

stockholder agreement established anti-takeover protections like those imposed by

Section 203, but for a period of only a year. The agreement’s prohibitions were

broadly worded; they prevented Delek and its affiliates not only from acquiring over

a majority of Alon’s equity, but also from “seek[ing] to” acquire stock over a

majority or otherwise circumventing the contractual restrictions.

      According to the plaintiff, shortly after Delek executed the stockholder

agreement, Delek began violating its terms.


                                         1
      During the stockholder agreement’s one-year standstill period: Delek’s CEO,

who also served on Alon’s board, publicly announced Delek’s intent to acquire the

remaining 52% of Alon’s outstanding equity. In light of Delek’s public statements,

Alon’s eleven-person board formed a special committee comprised of the six

directors without direct ties to Delek. Representatives of Delek and the committee

met six times, engaged in substantive negotiations, settled on all-stock consideration,

and apparently agreed that the exchange ratio need not be at a premium to Alon’s

trading price. Near the end of the standstill period, the committee made a formal

proposal to Delek.

      After the standstill period expired in May 2016, the special committee issued

two additional formal proposals to Delek, each on terms more favorable to Delek

than the last. Delek had made no formal counteroffers, so the committee was

effectively bidding against itself. In response to the third proposal, Delek delivered

its first formal counteroffer, proposing an exchange ratio that equated to

approximately $7.62 per Alon share. The special committee negotiated with Delek

in the months that followed, focusing its efforts on improving the exchange ratio.

By late December 2016, Delek made its best and final offer including an exchange

ratio that equated to approximately $12.13 per Alon share, significantly less than the

price paid by Delek only two years before. The committee received a fairness

opinion from its financial advisor. Although certain of the advisor’s analyses


                                          2
yielded price ranges above the merger price, the committee and ultimately the board

approved the merger. The merger was agreed to in January 2017, approved by

Alon’s stockholders in June 2017, and consummated in July 2017.

      On behalf of itself and a class of Alon’s common stockholders, the plaintiff

asserts claims against Alon’s board and Delek challenging the merger.              The

defendants have moved to dismiss the complaint, and this decision denies most of

that motion.

      Alongside the familiar fiduciary duty claims, the plaintiff pursues a less

customary claim for breach of the stockholder agreement. The plaintiff alleges that

Delek breached the stockholder agreement by seeking to enter into the merger during

the standstill period. As its primary defense, Delek argues that the plaintiff is not a

third-party beneficiary of the stockholder agreement and thus lacks standing to

enforce it.

      Under Delaware law, a third party to a contract may sue to enforce its terms

if: the contracting parties intended to confer a benefit directly to that third party;

they conveyed the benefit as a gift or in satisfaction of a pre-existing obligation; and

conveying the benefit was a material part of the purpose for entering into the

agreement. The stockholder agreement’s relationship to Section 203 renders each

of these elements easily satisfied. The stockholder agreement replicates aspects of

the anti-takeover protections of Section 203, which provide a direct benefit to


                                           3
stockholders of a Delaware corporation. The stockholder agreement therefore

provides a direct benefit to the plaintiff. Those benefits were established in place of

Section 203’s pre-existing protections, or at minimum, intended as a gift to the

stockholders. Because the purpose of the stockholder agreement is to restrict

Delek’s ability to acquire Alon, without the anti-takeover provisions, the agreement

would not achieve that purpose. The anti-takeover provisions are therefore material,

and the plaintiff has standing to enforce the stockholder agreement.

      The plaintiff adequately alleges that Delek breached the stockholder

agreement. Delek publicly announced its intent to acquire Alon stock, met with the

special committee’s chairperson six times, negotiated substantive terms, and

proposed a deal structure, all before the standstill period expired. These acts are

sufficient to state a claim that Delek breached the broadly worded anti-takeover

protections of the stockholder agreement.

      In another creative twist, the plaintiff asserts claims under Section 203,

contending that Delek’s breaches of the stockholder agreement vitiated the Alon

board’s Section 203 approval and restored the protections of Section 203. Under

Section 203(a)(3), a business combination otherwise prohibited by the statute may

be effected if it is approved by the board and authorized by at least two-thirds of the

outstanding voting stock. The defendants contend that the approval of the merger

by Alon’s board and stockholders satisfied Section 203(a)(3). Yet for stockholder


                                          4
approval of any corporate action to be valid, the vote must be fully informed. The

defendants’ argument thus fails because the plaintiff has adequately alleged multiple

deficiencies in the disclosures relating to the merger. Those deficiencies include

failing to fully and fairly describe the stockholder agreement, only partially

disclosing facts and flaws relating to the special committee’s formation, and

neglecting to mention that the special committee’s financial advisor increased its

stock holdings in the acquirer by 60% while advising the special committee. These

deficiencies not only foreclose the defendants’ Section 203 defense but also support

a standalone claim for breach of the duty of disclosure.

         The plaintiff’s claims for breach of fiduciary duty are equally viable. It is

reasonably conceivable that Delek’s 48% equity interest, employment of five of

Alon’s eleven board members, and influence over a sixth, renders Delek a controller

with concomitant fiduciary duties. The merger, therefore, is presumptively subject

to the entire fairness standard. The defendants argue that the business judgment

standard applies under Kahn v. M & F Worldwide Corp. (“MFW”) 1 because both the

special committee’s initial proposal and Delek’s initial counterproposal conditioned

the merger on the approval of a special committee and a majority of the minority

stockholders. Leaving aside the uninformed nature of the stockholder vote, the

defendants’ argument fails in light of two recent Delaware Supreme Court decisions

1
    88 A.3d 635 (Del. 2014).

                                           5
clarifying that a controller must impose MFW conditions before the start of

substantive economic negotiations. 2 Because the complaint adequately alleges that

Delek engaged in substantive economic negotiations months before any MFW

conditions were established, the defendants are not entitled to application of the

business judgment standard of review at the pleadings stage.

      The complaint adequately alleges unfair process and unfair price sufficient to

state a claim under the entire fairness standard. In support of its unfair process

assertion, the complaint alleges that Delek disregarded contractual obligations

prohibiting negotiation of the merger during the standstill period. The scope of the

special committee’s authority to explore alternative transactions was unclear at

critical stages of the negotiations. At Delek’s insistence, the Alon board replaced

two of the six special committee members over the course of negotiations. And the

special committee’s chairperson’s alleged ties to Delek cast doubt on his

independence. In support of its unfair price assertion, the complaint alleges that the

merger consideration was keyed to the values of Alon and Delek stock, which Delek

manipulated through public statements made before the merger. Also, the implied

per-share merger price was at the low end of value ranges presented by the special




2
  Flood v. Synutra Int’l, Inc., 195 A.3d 754, 763 (Del. 2018); Olenik v. Lodzinski, -- A.3d
--, 2019 WL 1497167, at *1 (Del. Apr. 11, 2019).

                                            6
committee’s financial advisor. These allegations are sufficient to establish unfair

process and price at the pleadings stage.

I.       FACTUAL BACKGROUND
        The facts are drawn from the Second Amended Verified Class Action

Complaint (the “Complaint”) 3 and documents it incorporates.

        A.     Delek’s Initial Acquisition of Alon Stock
        Alon is an independent retailer and marketer of petroleum products. In early

2015, Alon Israel Oil Company, Ltd. (“Alon Israel”) owned approximately 48% of

Alon’s outstanding common stock.4 Because of Alon Israel’s financial difficulties,

Alon Israel determined to sell its interest in Alon, and reached out to Delek, a

diversified downstream energy company, to explore interest in a stock purchase.

After about a month of negotiations, Delek requested that the Alon board of directors

(the “Board”) approve Delek’s stock purchase for purposes of 8 Del. C. § 203.

        The Alon Board formed a special committee to evaluate and negotiate the

Section 203 issue. On March 19, 2015, the Board approved Delek’s acquisition, but

conditioned that approval on Delek executing a stockholder agreement. Delek

executed a stockholder agreement that same day.




3
    C.A. No. 2017-0453-KSJM Docket (“Dkt.”) 37 (cited as “Second Am. Compl.”).
4
 Alon Israel owned a 55% interest in Alon before it sold 7% on the open market in
February 2015.

                                            7
      On April 14, 2015, Delek agreed to purchase Alon Israel’s 48% stake in Alon

for a total of $572.4 million or approximately $16.99 per share. That transaction

(the “initial stock purchase”) closed on May 14, 2015.

      After the transaction closed, five of Alon’s eleven directors resigned from the

Board and Delek appointed five Delek executives to fill the positions: Delek CEO

and President Ezra Uzi Yemin; Delek CFO Assaf Ginzburg; and three Delek

Executive Vice Presidents, Frederec Green, Mark D. Smith, and Avigal Soreq

(collectively, the “Delek Directors”). The remaining six directors were David

Wiessman, Ilhan Cohen, Ron W. Haddock, Zalman Segal, Jeff Morris, and

Yeshayahu Pery. 5 Yemin became the Executive Chairman of the Board, replacing

the prior chairman, Wiessman.

      B.     The Amended Stockholder Agreement
      Shortly after the initial stock purchase, Delek and Alon amended the

stockholder agreement (the “Amended Stockholder Agreement” or the

“Agreement”).6 The Agreement prevented Delek, for the year following the initial

stock purchase (the “Standstill Period”), from acquiring more than 49.99% of Alon’s


5
  As discussed below, Morris and Pery were replaced by William Kacal and Franklin
Wheeler. Kacal and Wheeler, along with Wiessman, Cohen, Haddock, and Segal, are
collectively referred to as the “Special Committee Defendants.” The Special Committee
Defendants and the Delek Directors are together referred to as the “Director Defendants.”
6
  Dkt. 26, Transmittal Aff. of Thomas P. Will in Supp. of the Opening Br. in Support of
the Delek Defs.’ Mot. to Dismiss Second Am. Compl. (“Will Aff.”) Ex. D (cited as “Am.
S’holder Agr.”).

                                           8
outstanding equity or entering into any material contract with Alon unless Delek first

obtained approval from an “Independent Director Committee.”7

          This restriction took the form of a web of overlapping contractual provisions.

The “Standstill Provision” (§ 1.01(a)) prohibited Delek from acquiring—or

proposing or seeking to acquire—any Alon equity that would cause Delek’s stake in

Alon’s total equity to exceed 49.99%.8 The “No Merger Provision” (§1.05(h))

prohibited Delek from “enter[ing] into or agree[ing], offer[ing], publicly propos[ing]

or seek[ing] to enter into, or otherwise be[ing] involved in or part of, any acquisition

transaction, merger or other business combination relating to all or part of

[Alon] . . . .” 9 The “No Circumvention Provision” (§ 1.05(k)) prohibited Delek from

“tak[ing] any action intended to circumvent any of the restrictions” in Section 1.05.10

And the “No Material Transactions Provision” (§ 2.02(a)) prohibited Delek from

entering into any “material transaction” with Alon. 11 All of these restrictions also

expressly applied to Delek’s affiliates.

          The Independent Director Committee exception appears in Section 2.02(a)’s

“No Material Transactions Provision,” which provides that “any material transaction


7
    Am. S’holder Agr. §§ 1.01(a), 2.02(a), 4.
8
    Id. § 1.01(a).
9
    Id. § 1.05(h).
10
     Id. § 1.05(k).
11
     Id. § 2.02(a).

                                                9
between [Alon] . . . on the one hand, and [Delek] . . . on the other hand, and any

action or transaction relating to this Agreement shall not be taken without prior

Independent Director Approval or Unaffiliated Stockholder Approval.” 12 A version

of this exception also appears in Section 1.05(i)’s “Proposal Exception,” which

states that Delek can confidentially propose to the Independent Director Committee

transactions otherwise prohibited by Section 1.05.13

           “Independent Director Approval” is defined as “the approval of the majority

of the members of the Independent Director Committee.”14 “Independent Director

Committee” is defined as a Board committee “comprised solely of two or more

Independent Directors that is duly authorized to consider and act upon the matters

that require the Independent Director Approval” under the Amended Stockholder

Agreement. 15 “Independent Director” is defined to exclude any directors affiliated

with Alon Israel and Delek. It is undisputed that Wiessman is not an Independent

Director as defined in the Agreement, Alon never formed an Independent Director

Committee, and thus Delek never obtained Independent Director Approval.




12
     Id. § 2.02(a).
13
     Id. § 1.05(i).
14
     Id. § 4.
15
     Id.

                                            10
         C.      Events Leading to the Challenged Merger

                 1.   Actions taken during the Standstill Period
         According to the Complaint, Delek desired to own 100% of Alon’s equity

since the initial stock purchase. In early 2015, however, Alon Israel’s financial

difficulties propelled Delek away from a “full merger” and caused the parties to work

to close the initial stock purchase “as quickly as possible,” as Delek’s Yemin

publicly stated during a May 2015 earnings call.16

         In July 2015, Wiessman proposed that the Board form a special committee of

directors to respond quickly to any transaction offers received from Delek (the

“Special Committee”). Wiessman proposed appointing to the Special Committee all

directors except for the five Delek Directors. The Board did not take formal action

to constitute the Special Committee at the July meeting.

         In August 2015, Yemin commented during a public earnings call on Delek’s

intention to acquire the remaining Alon stock, stating that “obviously . . . we are not

in the business of holding 48% in a company.” 17

         Although the Board had not formally constituted or empowered the Special

Committee, the committee members met on September 29, 2015. At that meeting,

the committee appointed Wiessman as chairman.             On October 8, Wiessman



16
     Second Am. Compl. ¶ 36.
17
     Id. ¶ 59.

                                          11
contacted Yemin and inquired “whether there was a transaction that Delek would

contemplate in the near term of which the Special Committee should be aware.”18

Yemin and Wiessman met on October 30, and Yemin told Wiessman that “any deal

between Delek and Alon would need to be a stock-for-stock deal due to leverage

limitations[.]” 19

          Alon’s public disclosures elliptically state that by October 30, 2015,

“questions had arisen ‘among Alon Board members regarding the establishment of

the Special Committee.’” 20 Alon did not disclose the questions or who specifically

raised them. On October 30, the Board formally approved the formation of the

Special Committee and authorized the Special Committee to engage advisors. The

committee retained J.P. Morgan Securities LLC (“J.P. Morgan”) as its financial

advisor and Gibson, Dunn & Crutcher LLP as its legal counsel.

          Although the Board formally constituted the Special Committee in October

2015, the Board did not fully delineate the committee’s powers until October 2016—

a year later. It was unclear during that period whether the Committee had the

authority to explore alternative transactions or reject a deal with Delek.




18
     Id. ¶ 61.
19
     Id. ¶ 62.
20
     Id. ¶ 63.

                                          12
          In December 2015, Yemin told Wiessman that “any deal with Alon would

need to be at an exchange ratio reflecting a discount to current Alon market price.”21

Wiessman responded by raising the prospect of Alon issuing its stockholders a one-

time cash dividend to offset such a discount. Yemin stated that Delek was unlikely

to support a special dividend. Later that month, Delek and Alon entered into a

confidentiality agreement allowing the exchange of non-public information. And

Wiessman and Yemin discussed a set of Special Committee talking points on

potential transaction terms, including terms related to price and a special dividend.

          By January 2016, Delek released an investor presentation that included

information on Delek’s plans to either acquire the remaining 52% or acquire an

additional 3% of Alon stock. The latter transaction would give Alon Israel majority

stock ownership.       Internally, Delek commenced a process for the eventual

disposition of its retail business to alleviate potential antitrust hurdles to a business

combination with Alon and provide liquidity for any cash component of the deal.

          That month, negotiations between Yemin and Wiessman continued. On

January 27, 2016, Yemin told Wiessman that Delek disfavored a stock-for-stock deal

at then-current market prices and that the exchange ratio would need to be at a

discount to Alon’s stock price.




21
     Id. ¶ 66.

                                           13
          That same day, Yemin proposed replacing two Alon directors—Morris and

Pery—with two directors selected by Delek, Kacal and Wheeler. Soon after, Delek

and Alon amended the Amended Stockholder Agreement on January 29, 2016, to

nominate Kacal and Wheeler to the Board. 22 That same day, Delek informed Alon

that it would provide “at least 14-days’ notice” before increasing its ownership stake

above 50%. 23

          In February 2016, Yemin shifted gears, telling Wiessman that Delek was

exploring paying 80% of the merger consideration in cash.24 Wiessman responded

that the Special Committee would expect a premium on the cash consideration.

Then, the Special Committee met on February 23, 2016, and decided to prepare a

proposal letter for Delek suggesting a stock-for-stock merger. They decided to

propose an exchange ratio based on then-current market prices instead of any

premium deal. The Special Committee left it to Wiessman to determine whether to

deliver the letter based on the outcome of a meeting with Yemin.


22
    The amendment to the Amended Stockholder Agreement also included Board
resolutions determining that the Delek Directors were independent and amending Alon’s
bylaws to extend supermajority voting requirements for the removal or replacement of
Yemin as Alon’s Board Chairman.         It further added, revised and replaced various
provisions of the Amended Stockholder Agreement relating to the nomination of directors,
termination of the Amended Stockholder Agreement and Board composition. Delek’s
proposed Board nominees Kacal and Wheeler were later elected to the Board and appointed
to the Special Committee in May 2016.
23
     Second Am. Compl. ¶ 82.
24
     Id. ¶ 86.

                                          14
          In March 2016, Yemin revised its message again, informing Wiessman that

Delek was exploring paying 50% of the merger consideration in cash, and that Delek

understood (based on their previous discussions) that such a structure would require

a premium. Wiessman rejected the proposal, although it would involve a premium,

responding that such a structure was not acceptable because it would trigger “make

whole” payments under Alon’s debt covenants and be a taxable event for Alon’s

stockholders.25 Wiessman again proposed a special dividend, which Yemin again

rejected.

          In April 2016, the Special Committee, through Wiessman, delivered a letter

to Delek proposing an acquisition of Alon in a stock-for-stock deal with an at-the-

market exchange ratio of 0.687 shares of Delek stock for each share of Alon common

stock. This proposal raised for the first time that any deal should be conditioned on

Special Committee approval and a majority-of-the-minority vote. The proposal also

asserted that synergies would generate at least $100 million in annual cost savings

between the companies. Yemin rejected the proposed market-price-based exchange

ratio and disputed the Special Committee’s assertion as to expected cost synergies.

          On May 6, 2016, Yemin confirmed on Delek’s quarterly earnings call that

these negotiations had taken place. Yemin further stated that “the independent

directors of Alon understood that ‘it doesn’t make sense’ for there to be a transaction

25
     Id. ¶ 89.

                                          15
at an exchange ratio based on current market prices.”26 The next day, Alon’s stock

price fell by 7%, thereby pushing any exchange ratio in Delek’s favor. The Special

Committee expressed its desire to respond publicly to Yemin’s comments, but Delek

demanded that the Special Committee refrain. A reasonable inference is that

Yemin’s public comments and muzzling of the Special Committee were intended to

manufacture market conditions favorable to Delek in a stock-for-stock transaction.

                 2.   Actions taken after the Standstill Period
          The Standstill Period expired on May 15, 2016. Three days later, Delek sent

the Special Committee a letter informing it that Delek would be in contact when

market conditions improved. Ignoring Delek’s “we’ll be in touch” communication,

on May 25, 2016, the Special Committee sent a new written proposal to Delek

lowering the proposed stock-for-stock exchange ratio to 0.615 in Delek’s favor.

          By June 13, 2016, Delek had yet to provide a substantive response to either

one of the Special Committee’s two written proposals. The Special Committee

considered issuing a press release announcing that it was authorized to explore

strategic alternatives. Again, Delek sought to restrict Alon’s public statements.

Yemin objected to the press release, contending that the Special Committee lacked

the authority to explore strategic alternatives that did not involve Delek. The Special

Committee capitulated to Yemin’s demands, issuing a revised press release.


26
     Id. ¶ 94.

                                           16
         On October 13, 2016, the Special Committee submitted a third written

proposal, bidding against itself again by lowering the proposed exchange ratio to a

range of 0.527 to 0.563.

         The next day, Delek delivered its buyout proposal to the Special Committee,

which called for an all-stock transaction with a fixed exchange ratio of 0.44 Delek

shares for each Alon share, then-equating to $7.62 per Alon share based on Delek’s

closing price of $17.32. Delek’s proposal provided that the transaction would

require approval “by a special committee . . . comprised entirely of directors that are

independent of Delek” and the holders of a majority of the non-Delek-affiliated Alon

stock. 27

         About two weeks later, on October 27, 2016, the Board adopted resolutions

that permitted the Special Committee “to decline any proposal from Delek and to

review and evaluate strategic alternatives[.]” 28 This adoption came after Yemin

communicated at least twenty-six times with Wiessman or the Special Committee,

and the parties had largely agreed upon deal structure.

         In December 2016, Delek sought prompt consummation of the deal, but J.P.

Morgan provided a financial analysis showing that Delek’s October 14 offer

understated Alon’s intrinsic value.


27
     Id. ¶ 111.
28
     Id. ¶ 115.

                                          17
      By December 24, 2016, Wiessman had suggested to Yemin that the Special

Committee would be willing to agree upon an exchange ratio of 0.539. After

consulting with J.P. Morgan, on December 27, 2016, Wiessman proposed a 0.504

exchange ratio. The next day, Yemin provided Wiessman with Delek’s “best and

final” offer reflecting the 0.504 exchange ratio.29 The Special Committee then

instructed its legal counsel and Wiessman to move forward with finalizing the other

deal points and a merger agreement.

      On January 2, 2017, the Special Committee met to discuss the merger

agreement and deal terms. J.P. Morgan presented its financial analysis and delivered

an opinion that the exchange ratio was fair to Alon stockholders. Although J.P.

Morgan provided a fairness opinion, certain of J.P. Morgan’s analysis also did not

support the merger consideration. The exchange ratio implied a per share merger

price of $12.13, representing only a 6.6% premium to Alon’s closing price on the

same day. By contrast, J.P. Morgan’s sum-of-the-parts analysis yielded a per share

price range of $15.60 to $18.90, and J.P. Morgan’s two discounted cash flow

analyses yielded price ranges above the merger price. In assessing price, the Special

Committee relied in part on a “relative valuation” methodology, which focused on

the trading prices of Alon’s stock and Delek’s stock as opposed to the intrinsic value



29
  Will Aff. Ex. A, Alon USA Energy, Inc., Proxy Statement (Schedule 14A) (May 30,
2017) (cited as the “Proxy”) at 115.

                                         18
of Alon. This valuation approach did not account for potential manipulation of the

companies’ stock trading prices. The Complaint alleges other problems affected J.P.

Morgan’s analysis and the projections on which it was based.30

         Also, according to the Complaint, and unbeknownst to the Special Committee,

between August 8, 2016 and November 4, 2016, J.P. Morgan and its affiliates had

increased their holdings in Delek by almost 60%.31

         On January 2, the Special Committee unanimously adopted resolutions

determining that the deal was advisable, fair, and in the best interests of Alon and its

public stockholders, approving the deal, and recommending it to the Board.32

Shortly after that, the Board met and adopted resolutions approving the deal and

recommending that Alon’s stockholders vote in favor of the deal. 33




30
  The Complaint also alleges that the Special Committee failed to inform itself that: (1) the
Delek Directors participated in the creation of Alon’s financial forecasts used in
negotiations with Delek. Second Am. Compl. ¶¶ 144, 206. (2) The Special Committee
commissioned projections that “excluded management’s best estimates of the positive
future revenue impact of planned growth initiatives.” Id. ¶ 121; see also id. ¶¶ 150, 155.
And (3) J.P. Morgan’s valuation analyses did not account for the value of acquiring limited
partner interests in Alon USA Partners, LP, discussed below. Id. ¶¶ 157–59, 207.
31
  J.P. Morgan and its affiliates purchased 573,154 shares of Delek stock, bringing their
overall beneficial ownership to 1,542,001 shares and raising their ownership stake to 2.5%.
32
     Proxy at 118.
33
  See id. The parties dispute whether the Delek Directors recused themselves from the
vote.

                                             19
         In connection with the transaction, Wiessman and Haddock secured post-

merger directorships with Delek entities, and Wiessman retained his executive

chairman role at Alon Partners G.P.

         Before the parties announced the merger, Delek developed a plan to capitalize

on Alon’s interests in Alon USA Partners, LP (the “Partnership”), the entity through

which Alon operates its wholesale marketing and certain refining operations. Alon

wholly owned the Partnership’s general partner and owned 81.6% of the

Partnership’s limited partner interests. The remaining 18.4% of the Partnership’s

limited partner interests were publicly held. According to the Complaint, Delek and

Alon also negotiated Delek’s post-merger acquisition of the remaining 18.4% of the

limited partner interests contemporaneously while negotiating the merger. Also

according to the Complaint, Wiessman’s son served on the board of the Partnership’s

general partner.

         D.     The Merger
         On January 3, 2017, Alon and Delek announced their entry into the Agreement

and Plan of Merger. The merger price represented a 6.6% premium to Alon’s closing

price on the day of the announcement. On May 30, 2017, Alon issued a Proxy

Statement (“Proxy”) 34 informing its stockholders of the proposed merger. At a

special meeting of Alon stockholders, held on June 28, 2017, holders of


34
     Will Aff. Ex. A.

                                           20
approximately 89% of Alon’s total outstanding shares voted in favor of the merger.

According to Alon, stockholders unaffiliated with Delek owned 79% of the

outstanding shares voted in favor of the merger.35

         E.     Ensuing Stockholder Litigation
         Six months after Alon and Delek announced the proposed merger, and weeks

before the stockholder vote, stockholders filed three lawsuits in two federal district

courts alleging disclosure deficiencies in violation of Section 14(a) of the Securities

Exchange Act of 1934.36 The plaintiff in the first-filed federal case moved for

injunctive relief.           Shortly after, the Arkansas Teacher Retirement System

(“Plaintiff”) commenced this lawsuit.

         Alon opted to supplement the Proxy voluntarily. On June 16, 2017, Alon

issued a supplemental disclosure describing all four lawsuits and attaching complete

copies of the complaints as exhibits. Alon issued another supplemental disclosure

five days later (the “June 21 8-K”). 37 The plaintiffs in the federal actions voluntarily

dismissed their claims.

         The merger closed on July 1, 2017.


35
     Will Aff. Ex. L at 8.
36
  See Page v. Alon USA Energy, Inc., Case No. 1:17-cv-00671 (D. Del. June 2, 2017)
(Complaint); Adler v. Alon USA Energy, Inc., Case No. 1:17-cv-00742 (D. Del. June 13,
2017) (Complaint); Phelps v. Delek US Hldgs., Inc., Case No. 3:17-cv-00910 (M.D. Tenn.
June 2, 2017) (Complaint).
37
     Will Aff. Ex. K.

                                             21
         Plaintiff amended its complaint on May 8, 2018, and the defendants

(“Defendants”) moved to dismiss the complaint on July 9, 2018. Plaintiff again

amended its complaint on September 18, 2018, and Defendants again moved to

dismiss. The parties completed briefing on December 3, 2018, 38 and the Court heard

oral argument on March 27, 2019.

II.      LEGAL ANALYSIS
         Plaintiff’s Second Amended Verified Class Action Complaint (“Complaint”)

asserts five counts: Count I claims that all Defendants breached the Amended

Stockholder Agreement.39        Count II claims that Defendants’ breaches of the

Amended Stockholder Agreement vitiated the Board’s waiver of Section 203;

consequently, Delek, Alon, and Holdco, Inc. (“Holdco”), an entity formed for the

purpose of the merger, were subject to the prohibitions set forth in 8 Del. C. § 203,

which they violated.40 Count III claims that Delek, Alon, and Holdco committed

conversion by taking possession over the stockholder class’s Alon shares through



38
  Dkt. 41, Opening Br. in Supp. of the Delek Defs.’ Mot. to Dismiss Second Am. Compl.
(“Delek Defs.’ Opening Br.”); Dkt. 43, Opening Br. in Supp. of the Special Comm. Defs.’
Mot. to Dismiss the Second Am. Verified Class Action Compl. (“Special Comm. Defs.’
Opening Br.”); Dkt. 49, Pl.’s Omnibus Answering Br. in Opp’n to Defs.’ Mot to Dismiss
(“Pl.’s Ans. Br.”); Dkt. 54, Reply Br. in Supp. of the Delek Defs.’ Mot. to Dismiss Second
Am. Compl. (“Delek Defs.’ Reply Br.”); Dkt. 55, Reply Br. in Supp. of the Special Comm.
Defs.’ Mot. to Dismiss the Second Am. Verified Class Action Compl. (“Special Comm.
Defs.’ Reply Br.”).
39
     Second Am. Compl. ¶¶ 179–86.
40
     Id. ¶¶ 187–91.

                                           22
the merger. 41 Count IV claims that Delek, Holdco, and the Director Defendants

breached their fiduciary duties to Plaintiff and the class by consummating the

merger. 42 Count V claims that the Director Defendants breached their fiduciary

duties to Plaintiff and the class by violating and failing to enforce the Amended

Stockholder Agreement and Section 203 and by making materially false and

incomplete disclosures in the Proxy and June 21 8-K. 43

         Defendants moved to dismiss the Complaint pursuant to Court of Chancery

Rule 12(b)(6). On a motion pursuant to Rule 12(b)(6), the Court accepts “all well-

pleaded factual allegations in the Complaint as true, [and] accept[s] even vague

allegations in the Complaint as ‘well-pleaded’ if they provide the defendant[s] notice

of the claim[.]” 44 “A trial court is not, however, required to accept as true conclusory

allegations ‘without specific supporting factual allegations.’” 45 The Court “draw[s]

all reasonable inferences in favor of the plaintiff, and den[ies] the motion unless the




41
     Id. ¶¶ 192–94.
42
     Id. ¶¶ 195–200. Count IV also asserts a disclosure claim against Delek.
43
     Id. ¶¶ 201–12.
44
  Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Hldgs. LLC, 27 A.3d 531, 536 (Del.
2011) (citing Savor, Inc. v. FMR Corp., 812 A.2d 894, 896–97 (Del. 2002)).
45
  In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162, 168 (Del. 2006) (first citing
In re Santa Fe Pac. Corp. S’holder Litig., 669 A.2d 59, 65–66 (Del. 1995); then citing
Solomon v. Pathe Commc’ns Corp., 672 A.2d 35, 38 (Del. 1996)).

                                             23
plaintiff could not recover under any reasonably conceivable set of circumstances

susceptible of proof.”46

         A.       Breach of the Amended Stockholder Agreement
         Through Count I, Plaintiff claims that Defendants breached several provisions

of the Amended Stockholder Agreement: the Standstill Provision (§ 1.01(a)), No

Merger Provision (§ 1.05(h)), and No Material Transactions Provision (§ 2.02(a)).47

“To state a claim for breach of contract, [Plaintiff] ‘must demonstrate: first, the

existence of the contract, whether express or implied; second, the breach of an

obligation imposed by that contract; and third, the resultant damage to the

plaintiff.’” 48

         Defendants do not challenge the existence of the Amended Stockholder

Agreement but contend that Plaintiff lacks standing to claim breach. They further

argue that Plaintiff has failed to plead that Delek breached any provision of the

Agreement. Finally, Defendants assert that Plaintiff has failed to plead damages

adequately.




46
     Cent. Mortg., 27 A.3d at 536 (citing Savor, 812 A.2d at 896–97).
47
     Second Am. Compl. ¶¶ 5, 8, 182.
48
  Kuroda v. SPJS Hldgs., L.L.C., 971 A.2d 872, 883 (Del. Ch. 2009) (quoting VLIW Tech.,
LLC v. Hewlett-Packard Co., 840 A.2d 606, 612 (Del. 2003)).

                                             24
              1.     Plaintiff has standing to sue for breach of the Amended
                     Stockholder Agreement.
       Under Delaware law, only parties to a contract and intended third-party

beneficiaries have standing to sue for breach of the contract.49 Plaintiff is not a party

to the Amended Stockholder Agreement but argues that it has standing as a third-

party beneficiary.

       Plaintiff must demonstrate three elements to qualify as a third-party

beneficiary of the Agreement:

              (i) the contracting parties must have intended that the third
              party beneficiary benefit from the contract, (ii) the benefit
              must have been intended as a gift or in satisfaction of a
              pre-existing obligation to that person, and (iii) the intent to
              benefit the third party must be a material part of the
              parties’ purpose in entering into the contract. 50


49
   NAMA Hldgs., LLC v. Related World Mkt. Ctr., LLC, 922 A.2d 417, 434 (Del. Ch. 2007)
(citing Comrie v. Enterasys Networks, Inc., 2004 WL 293337, at *2 (Del. Ch. Feb. 17,
2004)); see also Amirsaleh v. Bd. of Trade of City of New York, Inc., 2008 WL 4182998,
at *4 (Del. Ch. Sept. 11, 2008).
50
   Madison Realty P’rs 7, LLC v. Ag ISA, LLC, 2001 WL 406268, at *5 (Del. Ch. Apr. 17,
2001) (citing Guardian Constr. Co. v. Tetra Tech Richardson, Inc., 583 A.2d 1378, 1386–
87 (Del. Super. 1990)). See also Oliver B. Cannon & Son, Inc. v. Dorr-Oliver, Inc., 336
A.2d 211, 215–16 (Del. 1975) (finding third party was “intended to be a third-party-
creditor beneficiary of the [sub]contract” where the “subcontract manifest[ed] the requisite
intent that [plaintiff’s] proper performance of the subcontract would, to that extent,
discharge [defendant’s] duty to [the third-party]”); Blair v. Anderson, 325 A.2d 94, 96–97
(Del. 1974) (“Generally, the rights of third-party beneficiaries are those specified in the
contract; but if performance of the promise [in the contract] will satisfy a legal obligation
which a promisee owes a beneficiary, the latter is a creditor beneficiary with standing to
sue.” (citing Astle v. Wenke, 297 A.2d 45, 47 (Del. 1972)); Dolan v. Altice USA, Inc.,
C.A. No. 2018-0651-JRS, slip op. at 18 (Del. Ch. June 27, 2019) (holding that corporate
founders had standing to enforce a merger provision as third-party beneficiaries where the
provision “intended ‘to give the[m] (as beneficiar[ies]) the benefit of the promised
                                             25
       As their first line of defense, Defendants argue generally that stockholders are

not intended beneficiaries of corporate contracts simply by virtue of their stake in

the entity. 51 They observe that this Court has “previously bristled at the notion that

a stockholder could have ‘directly enforceable rights as third-party beneficiaries to

corporate contracts.’” 52 They urge caution in conferring third-party beneficiary

status to a stockholder. Like other corporate decisions, the decision of whether to

enforce a corporate contract falls within the business judgment of the board of

directors. If the board fails to exercise that judgment consistent with its fiduciary

obligations, a stockholder’s sole recourse should be to sue the directors for breach

of fiduciary duties, Defendants say. 53




performance’” (citing Restatement (Second) of Contracts § 302 cmt. c (1981))); Insituform
of N. Am., Inc. v. Chandler, 534 A.2d 257, 270 (Del. Ch. 1987) (“In order for third party
beneficiary rights to be created, not only is it necessary that performance of the contract
confer a benefit upon third parties that was intended, but the conferring of a beneficial
effect on such third party-whether it be a creditor of the promisee or an object of his or her
generosity-should be a material part of the contract’s purpose.” (emphasis in original)).
51
   See generally Delek Defs.’ Opening Br. at 27–28. The Special Committee Defendants
joined in and incorporated the arguments set forth in the briefing submitted by Delek,
Holdco, Alon, and the Delek Directors. Special Comm. Defs.’ Opening Br. at 1 n.1;
Special Comm. Defs.’ Reply Br. at 2.
52
  Amirsaleh, 2008 WL 4182998, at *4 (quoting Orban v. Field, 1993 WL 547187, at *9
(Del. Ch. Dec. 30, 1993)).
53
   See Omnicare, Inc. v. NCS Healthcare, Inc., 818 A.2d 914, 928 (Del. 2003) (“The
business judgment rule embodies the deference that is accorded to managerial decisions of
a board of directors. ‘Under normal circumstances, neither the courts nor the stockholders
should interfere with the managerial decision of the directors.’”).

                                             26
          Delaware courts, however, have recognized stockholders receiving direct

benefits from corporate contracts as third-party beneficiaries with standing to

enforce those contracts.54 For example, in Amirsaleh, this Court held that members

of a target company were third-party beneficiaries of a merger agreement.55 The

merger agreement granted merger consideration directly to the members, with the

substance of the consideration to be determined “at the election” of each member.56

Based on this provision, the Court found that the merger agreement “manifest[ed]

an unambiguous intent to benefit the [target’s] Members” and that there was

therefore “little legitimate question that the members . . . were intended beneficiaries

. . . .” 57 The Court further held that the plaintiff member had standing to “enforce


54
  See, e.g., Amirsaleh, 2008 WL 4182998, at *4 (finding that members of a company were
intended beneficiaries of merger agreement entered into by the company because “the
Agreement manifests an unambiguous intent to benefit the [company’s] [m]embers”);
NAMA Hldgs., 922 A.2d at 424 (“While not a signatory to that [venture] agreement, section
12.18(j) explicitly states that NAMA is a third-party beneficiary of section 12.18 in its
entirety.”); Hadley v. Shaffer, 2003 WL 21960406, at *5 (D. Del. Aug. 12, 2003) (finding
shareholders to be third-party beneficiaries of a merger agreement that required stockholder
approval and contained a stockholder payment provision). See also Comrie, 2004 WL
293337, at *3–5 (finding employees to be intended third-party beneficiaries of stock
purchase agreement that directed the grant of options directly to the employees).
55
     Amirsaleh, 2008 WL 4182998, at *4–5.
56
     Id. at *4.
57
  Id. (“[A]s the United States District Court for the District of Delaware has ruled, former
shareholders of a corporation are intended third party beneficiaries where the merger
agreement provided that the shareholders would receive compensation for their shares and
the merger required shareholder approval.” (citing Hadley, 2003 WL 21960406, at *5)).
The Court further distinguished the Orban v. Field case, cited by Defendants here, as
involving a “wholly incidental” benefit—the right to a class vote. Id. (citing Orban, 1993
WL 547187, at *9).

                                            27
his right to elect the form of his consideration under the Merger Agreement”—a

“right ‘clearly provided by the Agreement.’” 58 The Court reached this conclusion

although the merger agreement expressly disclaimed third-party beneficiaries.59

           Thus, a stockholder’s equity stake neither automatically confers nor

automatically disqualifies a stockholder from demonstrating third-party beneficiary

status to a corporate contract. Plaintiff is eligible for third-party beneficiary status

if Plaintiff demonstrates the three required elements, as the plaintiff did in

Armisaleh.

           Turning to the first element, Plaintiff must to demonstrate that the Agreement

confers an intended benefit to Plaintiff. As part of this analysis, Plaintiff must show

that it received a direct as opposed to an incidental benefit from the Agreement.

Third parties who “happen[] to benefit from the performance of the promise either

coincidentally or indirectly”—i.e., incidental beneficiaries—“will be held to have no

enforceable rights under the contract.”60 “[A] benefit need not be pecuniary to




58
     Amirsaleh, 2008 WL 4182998, at *5.
59
     Id.
60
  Insituform, 534 A.2d at 269 (citations omitted); see also Comrie, 2004 WL 293337, at
*4 (“Where the effect on a third party, ‘while a benefit to [that party] and intended, [is]
merely a means through which the benefit that motivated the contract was sought to be
achieved for the signatories,’ even if that third party is not merely incidental to the contract,
that third party takes no rights under the contract.” (alterations in original) (citation
omitted)).

                                               28
constitute a direct benefit.”61      To determine whether the Amended Stockholder

Agreement confers a direct benefit to Plaintiff, the Court looks to the terms of the

contract.62

       The terms of the Agreement adopt in modified form the protections of Section

203. As reflected in its recitals, the Agreement adopts the intent of the original

stockholder agreement, which was entered into “in connection with and as a

condition to Delek receiving approval for purposes of Section 203[.]” 63 And the

terms of the Agreement mimic Section 203’s anti-takeover protections by preventing

Delek from entering into transactions with Alon. 64


61
  Baker v. Impact Hldg., Inc., 2010 WL 1931032, at *4 (Del. Ch. May 13, 2010) (finding
that a stockholders agreement conferring a board seat to a third party provided a direct
benefit to that third party).
62
   See Comrie, 2004 WL 293337, at *3 (finding contracting party’s intent to bestow rights
on third parties was “plain from the face of the Agreement” where the agreement directed
the grant of benefits to the third parties); Hadley, 2003 WL 21960406, at *5 (citing Grant
St. Artists v. Gen. Elec. Co., 19 F. Supp. 2d 242, 253 (D.N.J. 1998)).
63
  Am. S’holder Agr. at 1 (second “WHEREAS” clause); see also id. Ex. B (“subject to
and contingent upon Delek and the Company entering into the Stockholder Agreement,
any acquisition of ‘ownership’ of ‘voting stock’ . . . of the Company by Delek or its
Affiliates resulting solely by reason of the Stock Purchase Transaction . . . is hereby
approved, so that the restrictions on business combinations contained in Section 203 will
not apply to Delek or its Affiliates and Associates solely as a result of the Stock Purchase
Transaction”).
64
    Compare 8 Del. C. § 203(a) (“[A] corporation shall not engage in any business
combination with any interested stockholder for a period of 3 years following the time that
such stockholder became an interested stockholder” unless certain conditions are present.),
with Am. S’holders Agr. § 1.01(a) (“Delek covenants and agrees that Delek shall not . . .
own, acquire, offer or propose to acquire, or agree or seek to acquire, or solicit the
acquisition of, by purchase or otherwise, any Company Capital Stock or equity-linked
securities . . . if, following such acquisition or due to such ownership, Delek . . . would own
                                              29
       Section 203 protections directly benefit stockholders of a Delaware

corporation. Like all provisions of the Delaware General Corporation Law, Section

203 is part of a contract between Delaware corporations and their stockholders and

thus provides enforceable benefits to those stockholders. 65 The current version of

Section 203, in substantial part, was approved and became effective in 1988, in the

wake of the United States Supreme Court upholding as constitutional, in CTS Corp.

v. Dynamics Corp. of America, an Indiana act created for the “primary purpose” of

“protect[ing] the shareholders of Indiana corporations” against hostile corporate



Company Capital Stock in excess of the Threshold Amount.”), and id. § 1.05(h) (Other
than as permitted in certain sections, “Delek shall not . . . enter into or agree, offer, publicly
propose or seek to enter into, or otherwise be involved in or part of, any acquisition
transaction, merger or other business combination relating to all or part of the Company or
any of its Subsidiaries or any acquisition transaction for all or part of the assets of the
Company or any of its Subsidiaries or any of their respective businesses.”), and id.
§ 2.02(a) (“[T]he parties agree that, until the first anniversary of the Closing, any material
transaction between the Company or its Subsidiaries, on the one hand, and Delek . . . , on
the other hand, and any action or transaction relating to this Agreement shall not be taken
without prior Independent Director Approval or Unaffiliated Stockholder Approval.”).
65
  See In re Activision Blizzard, Inc. S’holder Litig., 124 A.3d 1025, 1050 (Del. Ch. 2015)
(“Stockholders similarly can sue directly to enforce contractual constraints on a board’s
authority under the charter, bylaws, and provisions of the DGCL. The availability of a
direct cause of action in these situations comports with the Delaware Supreme Court’s
longstanding recognition that the DGCL, the certificate of incorporation, and the bylaws
together constitute a multi-party contract among the directors, officers, and stockholders
of the corporation. As parties to the contract, stockholders can enforce it.” (internal
footnotes omitted)); see also Espinoza v. Zuckerberg, 124 A.3d 47, 65 (Del. Ch. 2015)
(“Although minority stockholders have no power to alter a controlling stockholder’s
binding decisions absent a fiduciary breach, they are entitled to the benefits of the
formalities imposed by the DGCL[.]”); Fed. United Corp. v. Havender, 11 A.2d 331, 333
(Del. 1940) (“It is elementary that [the DGCL] provisions are written into every corporate
charter.”).

                                               30
takeovers.66 Similar to the Indiana act, the stated purpose of Section 203 is to confer

a benefit to stockholders by striking “a balance between the benefits of an unfettered

market for corporate shares and the well documented and judicially recognized need

to limit abusive takeover tactics” and to “encourage a full and fair offer.”67

         In sum, the Agreement adopts the protections of Section 203, and the

protections of Section 203 directly benefit stockholders.         It follows that the

Agreement provides direct benefits to stockholders. Further, Plaintiff was an Alon

stockholder; thus, Plaintiff received direct benefits from the Agreement.

         It is reasonable to infer that direct benefits conferred to Plaintiff by the

Agreement were intended. “To determine whether the parties intended to make an

individual a third-party beneficiary, the Court must look to the terms of the contract

and the surrounding circumstances.”68          Here, the terms and the surrounding

circumstances of the Agreement reflect that the Agreement was entered into to

replicate aspects of Section 203’s protections. The benefits of those protections to

Plaintiff, therefore, were not mere coincidence; they were clearly intended.




66
     481 U.S. 69, 91 (1987).
67
  2 R. Franklin Balotti & Jesse A. Finkelstein, The Delaware Law of Corporations &
Business Organizations § 203, at VI-31 (3d ed. 2019) (Comment to Section 203 effective
Feb. 2, 1988).
68
     Hadley, 2003 WL 21960406, at *5.

                                          31
      Turning to the second element, it is reasonable to infer that the benefits

conferred by the Agreement were intended to satisfy pre-existing legal obligations—

those provided by Section 203—and are otherwise a gift.

      Turning to the third element, the anti-takeover protections in the Agreement

are a material part of its purpose. The provisions at issue in this lawsuit appear in

prominently in the first two sections of the Agreement.          The recitals of the

Agreement reflect as its purpose Alon’s desire to impose conditions to Delek’s future

stock purchases. The contract generally reflects an intent to steer any Delek offer to

the Alon Board to avoid a creeping takeover deleterious to stockholder value.

Without the anti-takeover provisions, the Agreement would not achieve that

purpose.

      Because Plaintiff has pled facts sufficient to support all three elements

required to achieve third-party beneficiary status, Plaintiff has standing to sue for

breach of the Agreement.

             2.    The Complaint adequately alleges that Delek breached the
                   Amended Stockholder Agreement.
      The Complaint claims that Delek breached the Standstill Provision, which

states that Delek shall not “own, acquire, offer or propose to acquire, or agree or




                                         32
seek to acquire, or solicit the acquisition of” Alon stock during the Standstill

Period.69

         Defendants contend that the acts proscribed by the Standstill Provision require

“affirmative conduct by Delek.” 70 They focus their argument on “offering or

proposing to acquire,” contending that “offer” means “to present for acceptance or

rejection” and “propose” means “to put forward for consideration, discussion, or

adoption; suggest.”71 Defendants further define “seek” as “to endeavor to obtain or

reach” and “solicit” as “to seek or obtain by persuasion, entreaty, or formal

application[;]” 72 Defendants contend that these verbs all require some affirmative

action by Delek.73

         Even accepting Defendants’ position and proffered definitions as accurate for

the sake of argument, 74 the Complaint alleges facts sufficient to support a claim for

breach of the Standstill Provision. The Complaint alleges that during the Standstill

Period, Delek:



69
     Am. S’holder Agr. § 1.01(a).
70
     Delek Defs.’ Opening Br. at 19; Delek Defs.’ Reply Br. at 4–5.
71
     Delek Defs.’ Opening Br. at 19.
72
     Id. at 19–20.
73
     Delek Defs.’ Reply Br. at 4–5.
74
   The Court faced a similar standstill provision in In re TD Banknorth Stockholders
Litigation, where it adopted an arguably broader definition of propose: “to form a purpose
or intention, or to offer up a plan or scheme.” 938 A.2d 654, 665 (Del Ch. 2007).

                                             33
          •      Publicly announced its intent to acquire Alon;75

          •      Entered into a confidentiality agreement to permit the exchange of non-
                 public information;76

          •      Met with Wiessman six times and over the course of several months to
                 negotiate substantive terms of the merger prior to the expiration of the
                 Standstill Period;77 and

          •      Suggested several terms, including a stock-for-stock merger structure
                 and “an exchange ratio reflecting a discount to current Alon market
                 price.”78

          These are all affirmative actions. And considering these allegations as a

whole, it is reasonably conceivable that Delek was seeking to acquire Alon during

the Standstill Period.

          The finding that Plaintiff has adequately alleged a breach of the Standstill

Provision has a domino effect in this analysis, because the other provisions at issue

parrot the verbiage and encompass the actions prohibited by the Standstill Provision.

          The No Merger Provision states that Delek shall not during the Standstill

Period “offer . . . or seek to enter into, or otherwise be involved in or part of, any

acquisition transaction, merger or other business combination relating to all or part




75
     Second Am. Compl. ¶¶ 59, 72.
76
     Id. ¶ 68.
77
  See id. ¶ 62 (Oct. 30, 2015 meeting); id. ¶ 66 (Dec. 15, 2015 meeting); id. ¶ 70 (Dec. 31,
2015 meeting); id. ¶ 74 (Jan. 27, 2016 meeting); id. ¶ 86 (mid-February 2016 meeting); id.
¶ 89 (Mar. 22, 2016 meeting).
78
     Id. ¶¶ 62, 66, 74, 86, 89, 96.

                                             34
of the Company . . . .” 79 The actions prohibited by the No Merger Provision

encompass the actions prohibited by the Standstill Provision, as seeking to acquiring

stock is an acquisition transaction “relating to” Alon.80 Because Plaintiff has pled

facts sufficient to support a claim for breach of the Standstill Provision, Plaintiff has

adequately alleged a breach of the No Merger Provision. 81

         The No Material Transactions Provision states that Delek shall not take or

enter into “any action or transaction relating to this [Amended Stockholder]

Agreement” during the Standstill Period “without prior Independent Director

Approval or Unaffiliated Stockholder Approval.”82 It is undisputed that Alon never

formed an Independent Director Committee, which is required under the Agreement

to obtain Independent Director Approval.83 It is also undisputed that Alon never

obtained Unaffiliated Stockholder Approval. Thus, the Complaint states a claim that




79
     Am. S’holder Agr. § 1.05(h).
80
  Medtronic Vascular, Inc. v. NanoMedSystems, Inc., 2014 WL 795077, at *1 (Del. Ch.
Jan. 27, 2014) (recognizing that the contractual term “related to” has a “broad scope”);
Pharm. Prod. Dev., Inc. v. TVM Life Sci. Ventures VI, L.P., 2011 WL 549163, at *5 (Del.
Ch. Feb. 16, 2011) (“[O]ur courts have considered the connector ‘relating to’ to be
‘paradigmatically broad[.]’”).
81
  The Complaint also states a claim that Delek breached the No Circumvention Provision,
which states that Delek shall not “take any action intended to circumvent” the No Merger
Provision. Am. S’holder Agr. § 1.05(k).
82
     Am. S’holder Agr. § 2.02(a).
83
     See Delek Defs.’ Opening Br. at 22 n.10; Delek Defs.’ Reply Br. at 10.

                                             35
Delek breached the No Material Transactions Provision if it adequately alleges that

Delek took actions for which approval is required.

         Like the No Merger Provision, the No Material Transactions Provision’s

prohibition on Delek taking “any action . . . relating to this Agreement” without

approval must be read to prohibit Delek from taking actions prohibited by the

Standstill Provision—an action plainly “relating to” the Agreement. 84 Thus, a

violation of the Standstill Provision also violates the No Material Transactions

Provision. Because the former is well pled, so too is the latter. 85

                3.     The Complaint adequately alleges damages.
         Delek argues that Count I must be dismissed, even if it is reasonably

conceivable that Delek violated its contractual obligations, because the Complaint

fails to adequately allege damages. The Court disagrees. At the pleadings stage, it

is sufficient for the Complaint to aver damages resulting from the alleged contractual

breaches generally. 86 And the Complaint has met this standard.


84
     See supra n.80.
85
  Delek’s entry into the First Amendment to the Amended Stockholder Agreement also
breached the No Material Transactions Provision, as such an agreement certainly “relates
to” the Amended Stockholder Agreement and was thus subject to the approval
requirements. See Am. S’holder Agr. § 4.
86
  See, e.g., In re Ezcorp Inc. Consulting Agreement Deriv. Litig., 2016 WL 301245, at *30
(Del. Ch. Jan. 25, 2016) (“Allegations regarding damages can be pled generally.”). To
argue that Plaintiff’s damages allegations are inadequate and should result in dismissal,
Defendants cite H-M Wexford LLC v. Encorp, Inc., 832 A.2d 129 (Del. Ch. 2003). Delek
Defs.’ Opening Br. at 25. In that case, the Court applied a particularity standard to a motion
to dismiss the plaintiff’s fraudulent inducement claim (which it denied), but not to the
                                             36
         As Defendants acknowledge, the Complaint alleges that Delek’s breaches of

the Amended Stockholder Agreement “resulted in Delek acquiring the shares of the

Alon stockholders [in July 2017] on terms far less favorable to Alon stockholders

than if the terms of the [Agreement] had been honored.” 87 Even beyond this general

allegation, the Complaint alleges facts supporting an inference that Delek’s alleged

breaches, including its public statements, depressed Alon’s stock price, thereby

manufacturing more favorable market conditions for Delek in the July 2017

merger. 88 These allegations are sufficient to plead damages resulting from Delek’s

alleged contractual breaches.

               4.     The Complaint fails to state a claim for breach of the
                      Amended Stockholder Agreement against the Director
                      Defendants.
         Count I fails to state a claim as to the Director Defendants because they are

not parties to the Agreement. “It is a general principle of contract law that only a

party to a contract may be sued for breach of that contract.” 89 Here, only Alon and


contract claim. See 832 A.2d at 143–46 & n.28 (“The defendants have also claimed that
Wexford has not adequately pleaded damages for the purported breach, however, based on
the facts that Wexford has alleged, it can reasonably be inferred that, if those facts are true,
Wexford suffered damages in the form of an overpayment for its investment in Encorp.”).
87
     Delek Defs.’ Reply Br. at 13 (quoting Second Am. Compl. ¶ 182).
88
     See Second Am. Compl. ¶¶ 13, 60, 94, 98.
89
  Wallace ex rel. Cencom Cable Income P’rs II, L.P. v. Wood, 752 A.2d 1175, 1180 (Del.
Ch. 1999) (citation omitted); see also Huff Energy Fund, L.P. v. Gershen,
2016 WL 5462958, at *7–8 (Del. Ch. Sept. 29, 2016) (holding that directors who signed
shareholders agreement in a representative capacity could not be held liable for breach of
the agreement). While a non-party to a contract generally cannot be sued for breach of the
                                              37
Delek are parties to the Agreement. 90 The Director Defendants are not personally

obligated to perform under the Agreement and, absent rare circumstances not pled

here, cannot be held liable for breach of the Agreement. 91 Count I is dismissed as to

the Director Defendants. 92

         B.     Violation of Section 203 and Conversion
         Count II asserts that Delek, Holdco, and Alon violated Section 203 by entering

into the merger. Count III asserts that because Section 203 prohibited the merger,

the merger was void ab initio and thus constituted an act of conversion.




contract, as discussed above, the law recognizes that an intended third-party beneficiary of
a contract may have standing to sue for breach of the contract.
90
     Am. S’holder Agr. at pp. 1, 39.
91
   See Huff Energy, 2016 WL 5462958, at *7–8 (“The Director Defendants were not
personally obligated to perform under the contract and cannot be held liable for breach of
the contract.”). Indeed, Plaintiff concedes that the Director Defendants cannot be
personally liable for breaches of the Amended Stockholder Agreement. Pl.’s Ans. Br. at
25–26 n.30. Plaintiff nevertheless asserts that the Director Defendants should be joined
as parties to the breach of contract claim. According to Plaintiff, the Director Defendants,
as the persons through whom Delek and Alon can act to fulfill the Amended Stockholder
Agreement, are necessary to any equitable relief this Court awards against Delek and Alon.
This argument fails. This Court can award equitable relief against a company without the
company’s directors being parties to the litigation. See, e.g., QC Hldgs., Inc. v. Allconnect,
Inc., 2018 WL 4091721, at *11 (Del. Ch. Aug. 28, 2018) (awarding “specific performance
compelling the Company to use the Escrow Agreement to fulfill its obligations under the
Put Agreement” where the company’s directors were not joined as parties).
92
  Defendants do not include in their briefing any argument on Count I as pled against Alon
and Holdco. This failure waives Defendants’ motion for dismissal as to Count I as pled
against Alon and Holdco. See Emerald P’rs v. Berlin, 726 A.2d 1215, 1224 (Del. 1999)
(“Issues not briefed are deemed waived.”).

                                             38
       Plaintiff predicates Counts II and III on the notion that Section 203 applied to

the merger despite the Board’s Section 203 approval. As its primary argument for

why Section 203 applies, Plaintiff contends that by violating the Amended

Stockholder Agreement, Delek vitiated Alon’s Section 203 approval, and thereby

restored Section 203’s protections. This creative argument takes many logical leaps,

which might not ultimately land. At the pleadings stage, however, the claims

survive, solely because the remedy for any breach of the Amended Stockholder

Agreement is not a pleadings-stage determination.

       Defendants offer a silver bullet to Counts II and III. Section 203(a)(3) permits

a board and disinterested stockholders to approve by a two-thirds vote transactions

otherwise prohibited by Section 203.93 Both Alon’s Board and roughly 89% of the

Alon stockholders approved the merger. 94 Thus, Defendants say that even if Section

203 applies to the merger, the satisfaction of Section 203(a)(3)’s requirements

warrants dismissal of Counts II and III. Yet, “[f]or stockholder approval of any




93
  8 Del. C. § 203(a)(3). See generally Craig B. Smith & Clark W. Furlow, Guide to
Takeover Law of Delaware, 28–32 (BNA Corporate Practice Series 1988) (discussing
8 Del. C. § 203(a)(3)).
94
  The Court may consider the stockholder vote at the pleadings stage. In re TIBCO
Software Inc. S’holders Litig., 2015 WL 6155894, at *22 n.90 (Del. Ch. Oct. 20, 2015)
(“The Court may take judicial notice of the results of the vote reported in . . . SEC filings
because they are not reasonably subject to dispute.”).

                                             39
corporate action to be valid, the vote of the stockholders must be fully informed.”95

Because Plaintiff has adequately alleged that the stockholder vote was not fully

informed as discussed below, Defendants cannot argue that the stockholder vote

results in dismissal of Plaintiff’s Section 203 claims.

         C.     Breach of Fiduciary Duty Against Delek and the Director
                Defendants 96

         Counts IV and V respectively assert that by approving the merger, Delek

breached its fiduciary duties as a controlling stockholder and the individual

defendants breached their fiduciary duties as directors. Plaintiff contends that

Delek’s position as a controlling stockholder standing on both sides of the merger

subjects the merger to the entire fairness standard of review, and that the possibility

that the entire fairness standard may apply is sufficient to defeat a motion to dismiss.

         Defendants’ fourfold response is: (1) The Complaint does not adequately

allege that Delek was a controlling stockholder. (2) Even if the Complaint supports

a finding that Delek was a controlling stockholder, Defendants sufficiently restored

the business judgment standard by invoking the MFW conditions. 97 (3) Even if the



95
  In re KKR Fin. Hldgs. LLC S’holder Litig., 101 A.3d 980, 999 (Del. Ch. 2014) (citing
Citron v. E.I. Du Pont de Nemours & Co., 584 A.2d 490, 502–03 (Del. Ch. 1990)), aff’d
sub nom. Corwin v. KKR Fin. Hldgs. LLC, 125 A.3d 304 (Del. 2015).
96
   Count IV is also asserted against Holdco, but the Complaint pleads no facts from which
it can be understood how Plaintiff contends Holdco, the entity into which Alon and later
Delek were merged, owed fiduciary duties to Alon’s stockholders or breached them.
97
     See supra n.1.

                                           40
entire fairness standard applies, the Complaint fails to allege facts sufficient to

support a finding of unfair process or unfair price. (4) The Complaint fails to state

a non-exculpated claim for breach against the Director Defendants in all events.

              1.     It is reasonably conceivable that Delek exercised control
                     over Alon.
       “Entire fairness, Delaware’s most onerous standard” of review, arises when

the board labors under actual conflicts of interest, 98 such as when a controlling

stockholder stands on both sides of a challenged transaction.99

       Although a majority stockholder is a controlling stockholder as a matter of

law, 100 a minority stockholder can also be deemed a controller.101 Under Delaware

law, a plaintiff can demonstrate that a minority stockholder exercised de facto

control by showing that: (a) the stockholder “actually dominated and controlled the

majority of the board generally”; 102 or (b) the stockholder “actually dominated and


98
   In re Trados Inc. S’holder Litig., 73 A.3d 17, 44 (Del. Ch. Aug. 16, 2013); see also Reiss
v. Hazelett Strip Casting Corp., 28 A.3d 442, 460 (Del. Ch. 2011).
99
  Kahn v. Tremont Corp., 694 A.2d 422, 428 (Del. 1997); Kahn v. Lynch Commc’n Sys.,
Inc., 638 A.2d 1110, 1115 (Del. 1994); Weinberger v. UOP, Inc., 457 A.2d 701, 710 (Del.
1983).
100
    See, e.g., Lynch, 638 A.2d at 1113 (observing that a stockholder becomes a fiduciary if
it “owns a majority interest in . . . the corporation” (internal quotation marks omitted)).
101
   See id. (observing that a stockholder becomes a fiduciary if it “exercises control over
the business affairs of the corporation” (emphasis original)).
102
    In re Tesla Motors, Inc. S’holder Litig., 2018 WL 1560293, at *13 (Del. Ch. Mar. 28,
2018); In re Rouse Props., Inc., 2018 WL 1226015, at *12 (Del. Ch. Mar. 9, 2018) (first
citing Sciabacucchi v. Liberty Broadband Corp., 2017 WL 2325152, at *17 (Del. Ch.
May 31, 2017); then citing In re Cysive, Inc. S’holders Litig., 836 A.2d 531, 531 (Del. Ch.
2003), and then citing Lynch, 638 A.2d at 1114–15); see In re Primedia Inc. Deriv. Litig.,
                                             41
controlled the corporation, its board or the deciding committee with respect to the

challenged transaction.” 103 “[T]he question of whether a large block holder is so

powerful as to have obtained the status of a ‘controlling stockholder’ is intensely

factual, [and] is a difficult one to resolve on the pleadings.” 104

            Plaintiff contends that Delek exercised actual control over Alon prior to the

merger. 105 In support, Plaintiff alleges: “Delek owned approximately 48% of Alon’s

outstanding common stock.” 106 Five of Alon’s eleven directors at the time of the

merger were directly affiliated with Delek.107            And one of the remaining six

directors, Wiessman, was beholden to and therefore lacked independence from

Delek. As to Wiessman, Plaintiff specifically alleges that “Wiessman was beholden


910 A.2d 248, 257 (Del. Ch. 2006) (“[T]he plaintiffs need not demonstrate that [the alleged
controller] oversaw the day-to-day operations of Primedia. Allegations of control over the
particular transaction at issue are enough.”).
103
    Cysive, 836 A.2d at 550–51; see also Rouse, 2018 WL 1226015, at *12 (citing
Williamson, 2006 WL 1586375, at *4); Tesla, 2018 WL 1560293, at *13; Basho Techs.
Holdco B, LLC v. Georgetown Basho Inv’rs, LLC, 2018 WL 3326693, at *27 (Del. Ch.
July 6, 2018) (“Broader indicia of effective control also play a role in evaluating whether
a defendant exercised actual control over a decision. Examples of broader indicia include
ownership of a significant equity stake (albeit less than a majority), the right to designate
directors (albeit less than a majority), decisional rules in governing documents that enhance
the power of minority stockholder or board-level position, and the ability to exercise
outsized influence in the board room, such as through high-status roles like CEO,
Chairman, or founder.” (footnotes omitted)).
104
   Tesla, 2018 WL 1560293, at *13–14 (citation omitted) (concluding that the facts alleged
supported a reasonable inference that 22.1% stockholder exercised de facto control).
105
      Second Am. Compl. ¶ 133.
106
      Id.
107
      Id. (“Five of Alon’s eleven directors were Delek executives[.]”).

                                              42
to Delek” because, among other things, Wiessman, as the CEO and stockholder of

the owner of approximately 50% of Alon Israel, benefitted from Delek’s purchase

of Alon Israel’s Alon stock at a time when Wiessman’s business interests were

“crumbling.” 108 Wiessman and his daughter received salaries from Alon and an

indirect subsidiary of Alon, thereby indirectly benefitting from Delek’s status as

Alon’s controlling stockholder.109 And after the merger, Wiessman was appointed

to Holdco’s board of directors and allowed to continue on as the Executive Chairman

of Alon Partners GP. 110

            The allegations concerning Wiessman, coupled with Wiessman’s actions

during the process leading up to the merger, are sufficient to cast doubt on

Wiessman’s independence from Delek at the pleadings stage. But even if Wiessman

were independent from Delek, it is reasonably conceivable that Delek exercised

actual control over Alon.            The Complaint alleges facts from which it can be

reasonably inferred that Delek dominated Alon’s corporate affairs. Specifically, the

Complaint alleges that Delek: exercised its influence to remove and replace two

directors of the Board in order to work the same change upon the composition of the




108
      Id. ¶ 26; see also id. ¶ 33.
109
      Id. ¶ 26.
110
      Id.

                                              43
Special Committee; 111 dictated the timing, structure, and price of the merger; 112 and

effectively muzzled the Special Committee’s public statements to serve Delek’s

interests.113

          This finding of reasonable conceivability as to Delek’s actual control over

Alon comports with the holding of Kahn v. Lynch Communication Systems, in which

the Delaware Supreme Court affirmed a post-trial holding that a 43.3% stockholder

that had designated five of eleven directors was a controlling stockholder.114 The

Supreme Court based this affirmance on the Court of Chancery’s “factual finding

that ‘the . . . [board’s independent] directors deferred to [the 43.3% stockholder on

a corporate decision] because of its position as a significant stockholder and not

because they decided in the exercise of their own business judgment that [the 43.3%

stockholder’s] position was correct.’” 115

          For these reasons, it is reasonably conceivable that Delek is a controlling

stockholder, and the entire fairness standard of review therefore presumptively

applies to the approval of the merger. 116


111
      Second Am. Compl. ¶¶ 75–78.
112
      Id. ¶¶ 105, 110, 114, 118–20, 136, 142, 145.
113
      Id. ¶ 106.
114
      638 A.2d at 1111.
115
      Id. at 1115.
116
    As an alternative basis for applying entire fairness, Plaintiff contends that the majority
of the Board lacked independence from Delek or was interested in the merger. Pl.’s Ans.
Br. at 41, 45–49. Defendants contend that Plaintiff’s allegations do not support a finding
                                              44
                    2.   It is reasonably conceivable that the business judgment
                         standard was not restored under MFW.
          Under MFW, in controller buyouts, the business judgment standard of review

will be restored where “the controller conditions the procession of the transaction on

the approval of both a Special Committee and a majority of the minority

stockholders.”117        Additional conditions must be met to restore the business

judgment standard under MFW, 118 but Defendants’ dismissal argument stands and

falls on this requirement.

          For the business judgment standard to apply under MFW, Delek needed to

have invoked the MFW conditions “ab initio” or at the outset of the process.119

According to Defendants, MFW was properly invoked because the Special

Committee’s first formal offer and Delek’s first formal counteroffer conditioned the

merger on Special Committee approval and a majority-of-the-minority vote.120


that the majority of the Board is conflicted. Delek Defs.’ Reply Br. at 27–30. Because this
decision concludes that Count IV adequately states a claim for breach of fiduciary duty
under a controlling stockholder theory, I do not address Plaintiff’s alternative basis for
invoking entire fairness or Defendants’ response to that alternative argument.
117
      MFW, 88 A.3d at 645.
118
   Id. (a proponent must demonstrate that “(i) the controller conditions the procession of
the transaction on the approval of both a Special Committee and a majority of the minority
stockholders; (ii) the Special Committee is independent; (iii) the Special Committee is
empowered to freely select its own advisors and to say no definitively; (iv) the Special
Committee meets its duty of care in negotiating a fair price; (v) the vote of the minority is
informed; and (vi) there is no coercion of the minority”).
119
      Id. at 642.
120
    Delek Defs.’ Reply Br. at 35–36 (citing Second Am. Compl. ¶¶ 11, 90, 124). Delek
also claims that “Plaintiff . . . admits that the very first offer that was made in connection
                                             45
Defendants’ argument is inconsistent with recent Delaware Supreme Court cases

clarifying the timing requirements of MFW—Flood v. Synutra International, Inc.121

and Olenik v. Lodzinski. 122

          In Synutra, the board considered a preliminary proposal that “did not

condition a potential transaction on both a favorable committee recommendation and

approval by a majority of the disinterested stockholders.” 123 Before the board had

substantively evaluated the proposal, however, the bidder sent a follow-up letter

reaffirming its initial offer and “expressly condition[ing] the transaction on the

approval of the Special Committee and a majority of the minority stockholders.”124

The Court of Chancery held that this timing sufficed to invoke the MFW

protections. 125 The Delaware Supreme Court affirmed the trial court’s holding,



with the Transaction was authorized by the Special Committee and was explicitly
conditioned on majority-of-the-minority approval.” Delek Defs.’ Opening Br. at 41 (citing
Proxy at 89–91). Plaintiff neither authored the Proxy nor made any such admission. In
addition, a proxy cannot be offered on a motion to dismiss for the truth of the matters set
forth therein. White v. Panic, 783 A.2d 543, 547 n.5 (Del. 2001) (“[T]he court may not
employ assertions in documents outside the complaint to decide issues of fact against the
plaintiff without the benefit of an appropriate factual record.”).
121
      195 A.3d 754 (Del. 2018).
122
      -- A.3d ---, 2019 WL 1497167, at *1 (Del. Apr. 5, 2019).
123
    Flood v. Synutra Int’l, Inc., 2018 WL 705702, at *2 (Del. Ch. Feb. 2, 2018) (ORDER),
aff’d, 195 A.3d 754 (Del. 2018).
124
      Id. at *2.
125
   Id. at *3 (“The prompt sending of the Follow-up Letter prevented the Buyer Group from
using the M&F Worldwide conditions as bargaining chips. . . . The plaintiff has not pled
facts sufficient to call into question compliance with the ab initio requirement.”).

                                             46
concluding that the timing requirements of MFW are satisfied “so long as the

controller conditions its offer on the key protections at the germination stage of the

Special Committee process, when [the committee] is selecting its advisors,

establishing its method of proceeding, beginning its due diligence, and has not

commenced substantive economic negotiations with the controller[.]” 126

          In Olenik, the Court of Chancery determined that the timing requirements of

MFW had been satisfied where negotiations commenced between the parties eight

months before the controller imposed the MFW conditions because those

negotiations were merely “exploratory in nature.”127 The Delaware Supreme Court

reversed the holding because the MFW requirements “were not put in place early

and before substantive economic negotiation took place.” 128 The Court found that

“preliminary discussions transitioned to substantive economic negotiations when the

parties engaged in a joint exercise to value” the target, months before the MFW

conditions were imposed.129




126
      195 A.3d at 763.
127
 2018 WL 3493092, at *5, *16 (Del. Ch. July 20, 2018), aff’d in part, rev’d in part, 2019
WL 1497167.
128
      2019 WL 1497167, at *8.
129
      Id. at *9.

                                           47
          Applying the guidance of Synutra and Olenik, Plaintiff has pled facts

supporting a reasonable inferenced that Delek engaged in substantive economic

negotiations before Delek imposed the MFW conditions.

          The Special Committee first raised the MFW conditions in its April 2016

proposal and Delek effectively agreed to this aspect of the proposal through its

October 2016 counteroffer.130 In the six months prior, Yemin on behalf of Delek

met with Wiessman six times to discuss potential deal terms. 131 At the first and

second of these meetings, Yemin is alleged to have proposed a “stock-for-stock

deal” structure and “an exchange ratio reflecting a discount” to Alon’s market

price. 132 Wiessman, on behalf of Alon, responded with price and other deal terms,

“including no discount to Alon’s market price and a $4 per share special

dividend.” 133 Yemin in turn responded that absent an exchange ratio reflecting “a

significant discount to Alon’s stock price[,]” a stock-for-stock deal would not be

attractive, and suggested a “cash-and-stock” deal.134 Wiessman reacted to the

concept of cash-and-stock deal by stating that the Special Committee would expect




130
      See Second Am. Compl. ¶¶ 90, 110–12.
131
      See supra n.77.
132
      Second Am. Compl. ¶¶ 62, 66.
133
      Id. ¶ 67.
134
      Id. ¶¶ 74, 86, 89.

                                             48
a “cash-based premium.” 135 But later, Wiessman rejected the proposed cash-and-

stock deal due to tax consequences and again proposed a special dividend. 136 These

negotiations were substantive in nature.          They concerned the deal structure,

exchange ratio, and price terms. 137 Further, before the Special Committee first

proposed and Delek purportedly agreed to self-disable, the Special Committee

already had engaged J.P. Morgan as its financial advisor and Gibson, Dunn &

Crutcher LLP as its legal counsel,138 and Delek and Alon had “entered into a

confidentiality agreement to permit the exchange of non-public information.”139

          Thus, it is reasonably conceivable that the MFW conditions were not imposed

at the “germination stage,” but rather, many months after.                For this reason,

Defendants are not entitled to business judgment review at the pleadings stage, and




135
      Id. ¶ 86.
136
      Id. ¶ 89.
137
    The first formal proposal Wiessman delivered on April 1, 2016 sought an all-stock deal,
based on an at-the-market exchange ratio of 0.687 Delek shares for each share of Alon
common stock. Second Am. Compl. ¶ 90. Because Plaintiff alleges that the parties
negotiated an exchange ratio for a stock-for-stock transaction and price terms prior to
April 1, 2016, a reasonable inference can be drawn that the April 1 formal proposal merely
reiterates the terms Wiessman and Yemin already negotiated.                     See Olenik,
2018 WL 3493092, at *15–16 nn.199, 206 (noting a justified concern could arise on a
record where a controller “negotiate[s] the material terms of a transaction before submitting
a formal offer, and then claim[s] ab initio status by sweeping those terms, along with the
MFW conditions into its first (and final) formal proposal”).
138
      See Second Am. Compl. ¶ 56.
139
      Id. ¶ 68.

                                             49
it is reasonably conceivable that the merger will be subject to the entire fairness

standard. 140

                  3.     The Complaint adequately alleges unfair process and unfair
                         price.
            “The possibility that the entire fairness standard of review may apply tends to

preclude the Court from granting a motion to dismiss under Rule 12(b)(6) unless the

alleged controlling stockholder is able to show, conclusively, that the challenged

transaction was entirely fair based solely on the allegations of the complaint and the

documents integral to it.”141 “The concept of fairness has two basic aspects: fair

dealing and fair price.” 142 Fair dealing addresses “questions of when the transaction

was timed, how it was initiated, structured, negotiated, disclosed to the directors, and

how the approvals of the directors and the stockholders were obtained.” 143 Fair price



140
    Plaintiff also disputes that the Special Committee was sufficiently independent and
effective so as to satisfy the MFW standard. It also disputes that the stockholder vote
prevailed by a majority of the truly unaffiliated stockholders. Pls.’ Ans. Br. at 70–72;
id. at 19 (“The 4,412,582 million shares collectively held by Morris and Wiessman
constituted approximately 6.2% of the Company’s stock and 11.6% of the non-Delek
public shares, giving Delek a substantial head start toward fulfilling the unaffiliated
stockholder vote requirement.”). Because this decision determines that the facts alleged
support a reasonable inference that Delek failed to invoke the MFW protections at the
relevant time, this decision does not resolve these other arguments.
141
   Klein v. H.I.G. Capital, LLC, 2018 WL 6719717, at *16 (Del. Ch. Dec. 19, 2018). See
also Sciabacucchi v. Liberty Broadband Corp., 2018 WL 3599997, at *15 (Del. Ch.
July 26, 2018) (applying entire fairness “typically precludes dismissal of a complaint
under Rule 12(b)(6)” (citing Orman v. Cullman, 794 A.2d 5, 21 n.36 (Del. Ch. 2002))).
142
      Weinberger, 457 A.2d at 711.
143
      Id.

                                              50
concerns “the economic and financial considerations of the proposed merger,

including all relevant factors: assets, market value, earnings, future prospects, and

any other elements that affect the intrinsic or inherent value of a company’s

stock.”144 “A strong record of fair dealing can influence the fair price inquiry,

reinforcing the unitary nature of the entire fairness test. The converse is equally true:

process can infect price.” 145

            The Complaint pleads facts supporting a reasonable inference that the process

leading to the merger was unfair. According to the Complaint, significant aspects

of the merger were negotiated at a time when Delek was contractually precluded

from making an offer. 146 The Special Committee process was suboptimal. At

critical stages, the committee’s authority was unclear. By design, two directors were

removed from the Alon Board early in the process and replaced with individuals

selected by Delek. 147 The committee allowed negotiations to be conducted by

Wiessman, whose independence and disinterest were questionable.148 Further, the




144
      Id.
145
   Reis, 28 A.3d at 467 (citation omitted). See also Basho, 2018 WL 3326693, at *37
(“[A]n unfair process can taint the price.” (citations omitted)).
146
      See, e.g., Second Am. Compl. ¶¶ 55, 74.
147
      Id. ¶ 78.
148
      See, e.g., id.

                                                51
Complaint contains non-conclusory allegations suggesting that the Special

Committee failed to inform itself adequately. 149

          The Complaint also pleads facts supporting a reasonable inference that the

merger consideration was unfair. According to the Complaint, the merger price paid

failed to capture the “fair intrinsic value” of Alon’s stock for multiple reasons.150

The price was tied to the companies’ respective stock values. 151 As a result, any

decline in Delek’s stock price affected the merger price negatively, 152 and Delek

made multiple public statements that had the effect of pushing down the merger

price. 153 Furthermore, the merger price was at the “low end of the value ranges for

Alon’s common stock” reflected in J.P. Morgan’s analyses, which are in turn alleged

to have undervalued Alon’s common stock. 154 For example, the Complaint asserts

that one set of projections J.P. Morgan relied upon improperly excluded

management’s best estimates of the future impact of planned growth projects.155

And the Complaint alleges that J.P. Morgan’s discounted cash flow analyses


149
      See supra n.30.
150
   Second Am. Compl. ¶ 147. The Complaint alleges that the price “was a substantial
discount” to the price originally paid by Delek for Alon Israel’s stock two years earlier. Id.
¶ 145.
151
      See id. ¶¶ 145–46.
152
      Id. ¶ 146.
153
      Id. ¶¶ 145, 197.
154
      Id. ¶ 148.
155
      Id. ¶¶ 148–55.

                                             52
“employed an unreasonably low perpetual growth rate for Alon, which exerted

additional downward pressure on the resulting valuations.” 156            Finally, the

Complaint alleges that the price failed to reflect the value of the planned acquisition

of the Partnership interests as well as the value of the Partnership’s market

capitalization, and certain Alon assets.157

          Given these alleged problems, it is reasonably conceivable that Delek and the

Director Defendants did not engage in a fair process or negotiate a fair price for

Plaintiff and the class, and thereby breached their fiduciary duties.

                   4.   The Complaint states a claim for breach of fiduciary duties
                        against the Director Defendants.
          Defendants contend that the “fiduciary duty claims against the Delek

Directors must . . . be dismissed because they recused themselves as directors of

Alon from the Special Committee’s and Board’s process of approving” the

merger. 158 In support of this argument, Defendants appear to rely on the Proxy’s

statement that the Delek Defendants recused themselves from the adoption of Board

resolutions approving and recommending the merger. 159 Leaving aside that this

argument finds no basis in the Complaint, merely recusing oneself from the ultimate



156
      Id. ¶ 156.
157
      Id. ¶¶ 157–59.
158
      Delek Defs.’ Opening Br. at 32 n.14. In support of this argument,
159
      See, e.g., Proxy at 118.

                                             53
decision does not absolve a director of his or her fiduciary duties. 160 Here, the

Complaint alleges facts from which it can be reasonably inferred that the Delek

Defendants participated in the process leading to and the approval of the merger.161

Defendants’ recusal argument fails.

         Relying on the exculpatory provision contained in Alon’s charter, the Special

Committee Defendants contend that the Complaint has failed to allege a non-

exculpated claim against them. 162          They argue that the Complaint states only

“conclusory criticisms of the Special Committee process” that do not demonstrate

that the Special Committee acted in bad faith.163 The Special Committee Defendnats

make a good point, and the allegations against the committee members aside from

Wiessman are not extensive. Still, based on the above-discussed deficiencies in the



160
    In support of their recusal argument, the Delek Defendants rely on In re Tri-Star
Pictures, Inc. Litigation, 1995 WL 106520 (Del. Ch. 9, 1995) and Citron v. E.I. Du Pont
de Nemours & Co., 584 A.2d 490 (Del. Ch. 1990). In both of these cases, however, the
directors found to have not breached their fiduciary duties had played no role in the board’s
decision-making process; they had not merely recused themselves from the ultimate
decision rendered. 1995 WL 106520, at *3–4; 584 A.2d at 499. Indeed, the Court in Tri-
Star expressly noted that there is “no per se rule [that] unqualifiedly and categorically
relieves a director from liability solely because that director refrains from voting on the
challenged transaction.” 1995 WL 106520, at *3. In so opining, the Court contemplated
“a scenario in which certain members of the board of directors conspire with others to
formulate a transaction that is later claimed to be wrongful. . . [and] those directors then
deliberately absent themselves from the directors’ meeting at which the proposal is to be
voted upon, specifically to shield themselves from any exposure to liability.” Id.
161
      See, e.g., Second Am. Compl. ¶ 92, 116, 120, 134.
162
      See Special Comm. Defs.’ Opening Br. at 17–18.
163
      Id. at 17–20 (characterizing the Complaint’s allegations as “nitpicking”).

                                               54
Special Committee’s process and issues concerning the merger price, and the below-

discussed disclosure violations, it is reasonably conceivable that the Special

Committee Defendants acted in bad faith. The Complaint therefore states a breach

of fiduciary duty of loyalty claim against the Special Committee Defendants as well

as the other Director Defendants in connection with the merger.

       D.     Disclosure Claims 164
       Through Count V, Plaintiff alleges that the Director Defendants breached their

fiduciary duties due to material misstatements and omissions in the Proxy and

June 21 8-K. 165

       “[D]irectors of a Delaware corporation have a fiduciary duty to disclose fully

and fairly all material information . . . .” 166 “Under Delaware law, when a board

chooses to disclose a course of events or to discuss a specific subject, it has long

been understood that it cannot do so in a materially misleading way, by disclosing


164
   Through Count IV, the Complaint asserts that Delek also breached its fiduciary duties
due to material deficiencies and omissions in Alon’s Proxy. Second Am. Compl. ¶ 198.
Plaintiff does not brief its disclosure claims as pled against Delek; this aspect of Plaintiff’s
Count IV is therefore dismissed. Forsythe v. ESC Fund Mgmt. Co. (U.S.), Inc.,
2007 WL 2982247, at *11 (Del. Ch. Oct. 9, 2007) (“The plaintiffs have waived these
claims by failing to brief them in their opposition to the motion to dismiss.”).
165
   Second Am. Compl. ¶¶ 210–11. Count V also alleges that the Director Defendants
breached their fiduciary duties by failing to enforce the Amended Stockholder Agreement
and violating Section 203. Second Am. Compl. ¶ 203. Defendants did not brief this aspect
of Count V, and Defendants’ motion to dismiss this portion of Count V is therefore waived.
See Emerald P’rs, 726 A.2d at 1224 (“Issues not briefed are deemed waived.”).
166
  Appel v. Berkman, 180 A.3d 1055, 1060 (Del. 2018) (alteration in original) (citation
omitted).

                                              55
only part of the story, and leaving the reader with a distorted impression.”167

“Disclosures must ‘provide a balanced, truthful account of all matters they disclose.’

Partial disclosure, in which some material facts are not disclosed or are presented in

an ambiguous, incomplete, or misleading manner, is not sufficient to meet a

fiduciary’s disclosure obligations.”168 “An omitted fact is material if there is a

substantial likelihood that a reasonable shareholder would consider it important in

deciding how to vote.” 169 “Put another way, there must be a substantial likelihood

that the disclosure of the omitted fact would have been viewed by the reasonable

investor as having significantly altered the ‘total mix’ of information made

available.”170

          Plaintiff identifies seven categories of allegedly deficient disclosures. Six of

these categories hit the mark.

                 1.     The stockholder agreement, the Amended Stockholder
                        Agreement, and the amendment to the Amended
                        Stockholder Agreement
          The Proxy discloses the existence of the original stockholder agreement, the

Amended Stockholder Agreement, and the amendment to the Amended Stockholder



167
      Id. at 1064.
168
      Id. (footnote omitted).
169
  Rosenblatt v. Getty Oil Co., 493 A.2d 929, 944 (Del. 1985) (quoting TSC Indus., Inc. v.
Northway, Inc., 426 U.S. 438, 449 (1976)).
170
      Id. (quoting TSC Indus., 426 U.S. at 449).

                                              56
Agreement. Neither the Proxy nor June 21 8-K describe the terms of the original

stockholder agreement.171 As for the Amended Stockholder Agreement, the Proxy

states that it included “a ‘standstill’ provision prohibiting Delek from acquiring

additional shares that would result in Delek owning more than 49.99% of the

outstanding Alon common stock” before the end of the Standstill Period. 172 The

Proxy does not disclose that Delek was prohibited from taking a host of other broadly

described actions, including “seek[ing] to” acquire Alon common stock. The June

21 8-K provides little additional detail.173 As for the amendment to the Amended

Stockholder Agreement, the Proxy states that it permitted the nomination of Wheeler

and Kacal as directors. 174

         These disclosures are materially incomplete. The stockholder agreement and

its various amendments were put in place to protect stockholders, and a reasonable

stockholder would consider it important to have a full and fair description of these

agreements in deciding how to vote on the merger.

         Defendants note that the Proxy directs stockholders to a May 26, 2015

Schedule 13D attaching a copy of the Amended Stockholder Agreement and a


171
      See generally Proxy at 82.
172
   Id. at 83. The Proxy states, misleadingly, that the Agreement permitted Delek to
nominate its own slate of directors for Alon’s 2016 annual stockholder meeting. Id.
173
   See generally June 21 8-K. This 8-K deletes the Proxy’s allegedly misleading statement
regarding Delek’s ability to nominate its own director slate
174
      See Proxy at 87–88.

                                           57
February 3, 2016 Schedule 13D attaching a copy of the amendment to the Amended

Stockholder Agreement.        Disclosures are not supposed to take the form of a

scavenger hunt. Including directions of where to find copies of some, but not all, of

the relevant agreements did not satisfy the Director Defendants’ disclosure

obligations.175

             2.     J.P. Morgan’s conflict of interests
       The Proxy discloses that J.P. Morgan and its affiliates, in the ordinary course

of their businesses, “may actively trade the debt and equity securities or financial

instruments . . . of Alon or Delek for their own accounts or for the accounts of their

customers . . . .” 176 Plaintiff contends that the language “may actively trade . . .

equity securities” is materially misleading given that J.P. Morgan actually increased

its position in Delek by almost 60% while providing financial advice to the Special




175
    See ODS Techs., L.P. v. Marshall, 832 A.2d 1254, 1262 (Del. Ch. 2003) (“[A]lthough
those agreements are disclosed in the Form 10-KSB, the portions of those agreements
relevant to a reasonable shareholder are neither highlighted nor mentioned directly in
connection with the Amendments.”); see also In re Ebix, Inc. S’holder Litig.,
2014 WL 3696655, at *10 (Del. Ch. July 24, 2014) (“Discovering the alleged harm would
have required a careful and close reading of multiple SEC filings and incorporated exhibits
by a stockholder strongly suspicious of the Board’s disclosures. The Court cannot say, at
the pleading stage, that such effort is required of a reasonably diligent stockholder for
laches purposes.”).
176
   Proxy at 151. Annex F to the Proxy further discloses that J.P. Morgan and its affiliates
“hold on a proprietary basis, less than 1% of the outstanding common stock of each of”
Alon and Delek. Proxy, Annex F at 2–3.

                                            58
Committee during merger negotiations.177 In deciding how to vote on the merger, a

reasonable stockholder would consider it important that the Special Committee’s

financial advisor increased its stake in the acquirer significantly while advising in

negotiations against the acquirer.

                    3.   The Board’s formation of the Special Committee
            The Proxy discloses that “the Special Committee had been operating on the

understanding that the Alon Board had established the Special Committee at its

meeting on July 31, 2015,” but that later “questions arose among the Alon Board

members regarding the establishment of the Special Committee.” 178        The Proxy

further discloses that “the Alon Board formally approved the formation of the

Special Committee and the authority of the Special Committee to engage financial

and legal advisers” on October 30, 2015. 179 The Proxy also discloses that “on

October 27, 2016, the Alon Board adopted resolutions delineating the power and

authority of the Special Committee, including the power to decline any proposal

from Delek and to review and evaluate strategic alternatives[.]” 180




177
   Pl.’s Ans. Br. at 58 (emphasis added); see also Second Am. Compl. ¶ 141 (“JP Morgan
increased its Delek position by almost 60% between August 8, 2016 and November 4,
2016[.]”).
178
      Proxy at 84.
179
      Id.
180
      Id. at 108.

                                            59
            These partial disclosures raise more queries than they answer. Any reasonable

stockholder reading these statements would consider it important to know: What

“questions” were raised at the October 30, 2015 meeting, who raised them, and were

they resolved? Any reasonable stockholder would also consider it important to know

whether the Special Committee understood the scope of its authority before the

Board adopted resolutions on October 27, 2016. The partial nature of the disclosures

on this issue create an ambiguous and potentially misleading narrative and are

insufficient to meet the Director Defendants’ fiduciary obligations.

                   4.   Delek’s nomination of Kacal and Wheeler to the Board
            The Proxy discloses that on January 27, 2016, Yemin proposed that “the

current Alon Board largely be renominated, with two new independent directors

replacing two of the current members of the Alon Board at such time.” 181 The Proxy

further discloses that in February 2015, Wiessman and Yemin discussed replacing

Morris, an Alon employee, “[i]n an effort to ensure compliance with . . . NYSE

listing standards.” 182      Still further, the Proxy discloses that Yemin provided

Wiessman with the names of two individuals—Kacal and Wheeler—who had been

recommended to Delek through industry contacts and Delek Board members. 183



181
      Id. at 87.
182
      Id.
183
      Id.

                                              60
          Plaintiff contends that the Proxy’s disclosures about Kacal’s and Wheeler’s

nomination to the Board are “demonstrably false,”184 and that the “only reason

Wiessman and the rest of the Alon Board approved Wheeler and Kacal to replace

Morris and Pery was that Delek demanded the change.”185 This is inferable because

Morris’s replacement could not conceivably ensure compliance with NYSE listing

standards, according to Plaintiff.

          Accepting Plaintiff’s allegations as true, it is reasonably conceivable that the

disclosures concerning Morris and Pery are deficient. Development of the factual

record will be required to confirm or disabuse Plaintiff’s theory of materiality on this

topic.

                 5.       The Confidentiality Agreement
          The Proxy discloses that “Alon and Delek entered into a confidentiality

agreement to permit the exchange of certain non-public information” on

December 23, 2015, and then amended that agreement on July 8, 2016. 186 Because

“Delek invoked the terms of the Confidentiality Agreement when seeking to bar the

Special Committee from publicly disclosing its proposal to merge with Delek,”187

Plaintiff argues that a reasonable stockholder would consider it important to know


184
      Pl.’s Ans. Br. at 61.
185
      Second Am. Compl. ¶ 78.
186
      Proxy at 86, 100.
187
      Pl.’s Ans. Br. at 63.

                                             61
the terms of the original and amended confidentiality agreement, as well as the

circumstances necessitating the amendment.

            Defendants respond that whether the December 2015 amended Schedule 13D

discloses the execution of the confidentiality agreement is “irrelevant, because the

Proxy does.”188 Defendants further respond that information regarding the reasons

for and terms of the amended confidentiality agreement are not material because the

“Proxy makes clear that the parties exchanged confidential information to facilitate

their respective analyses, particularly regarding synergies.”189            On this point,

Plaintiff fails to state a disclosure deficiency. Disclosing “why” the confidentiality

agreement was amended is unlikely to alter the total mix of information available to

stockholders.190

                 6.    Wiessman and Haddock’s post-merger Board service
            The Special Committee negotiated for the right to appoint post-merger a

director on each of the boards of Holdco and a Delek affiliate, Delek Logistics, and

that Wiessman and Haddock would fill these positions, which the Proxy discloses.191



188
      Delek Defs.’ Opening Br. at 67 (emphasis omitted).
189
      Id.
190
  In re Sauer-Danfoss Inc. S’holders Litig., 65 A.3d 1116, 1131 (Del. Ch. 2011) (“Asking
‘why’ does not state a meritorious disclosure claim.”).
191
   Proxy at 165 (“Alon’s directors and executive officers have interests in the Alon Merger
that may be different from, or in addition to, those of other stockholders of Alon generally.
In the case of Alon’s directors, these interests include . . . potential service on the Delek
Board or the board of directors of the general partner of Delek Logistics if selected by the
                                             62
The Proxy, however, fails to disclose the compensation Wiessman and Haddock

were set to receive for their post-merger Board service and that Wiessman would

continue as Executive Chairman of Alon Partners G.P. It is reasonably conceivable

that Alon’s stockholders would view the post-merger compensation provided to

Alon’s lead negotiator, Wiessman, to be material in deciding how to vote on the

merger. 192

                7.      Delek’s planned post-merger acquisition of the Partnership
         Plaintiff alleges that before the parties announced the merger, Delek

developed a plan to acquire the remaining 18.4% of the Partnership’s publicly held

limited partner interests. The Proxy and June 21 8-K, however, do not disclose that

planned acquisition. Plaintiff contends this omission is material because Delek

negotiated the acquisition contemporaneously with the merger, and a reasonable

stockholder would find this information important in evaluating the terms of the

merger. 193




Special Committee pursuant to its right to nominate one person to each such board of
directors, as described in the merger agreement[.]”).
192
    See In re Xura, Inc., S’holder Litig., 2018 WL 6498677, at *12 (Del. Ch. Dec. 10, 2018)
(disclosure violation pled where it was reasonably conceivable that the public disclosures
failed to disclose that the acquirer’s affiliate “made clear its intention to work with [the
target’s] management . . . after consummation of the Transaction in all of its offer letters
to the Company”).
193
      Pl.’s Ans. Br. at 64–65.

                                            63
       Taking Plaintiffs allegations as true, Alon’s interest in the Partnership was a

material asset. It is reasonably conceivable that a plan to build upon that asset for

the benefit of the post-merger entity would be material to a stockholder deciding

how to vote on the merger. That the plan was publicly disclosed separate and apart

from the Proxy does not absolve the Director Defendants of their responsibility to

include all material information regarding the merger in the Proxy. 194

III.   CONCLUSION
       Count I is dismissed as to the Director Defendants. Count IV is dismissed to

the extent it is pled against Holdco and to the extent it asserts a disclosure claim

against Delek. Count V is dismissed to the extent it asserts a disclosure claim with

respect to the confidentiality agreement.         Defendants’ motions to dismiss are

otherwise DENIED.




194
  See In re Trans World Airlines, Inc. S’holders Litig., 1988 WL 111271, at *10 (Del. Ch.
Oct. 21, 1988) (rejecting argument that failure to disclose fair market value figure in proxy
was cured by its public disclosure in SEC filings), abrogated on other grounds by Lynch,
638 A.2d at 1115–17.

                                             64
