Former HomeFed Corp. shareholders got a green light from a Delaware judge for their challenge to the real estate developer’s take-private buyout by Jefferies Financial Group Inc., which put in place protections for public investors only after reaching a deal with its largest minority shareholders.
“It would be imprudent to endorse a rule that would allow a controller to undermine the effectiveness of a special committee preemptively through direct negotiations with a stockholder,” Chancellor Andre G. Bouchard wrote Monday, saying the side deals tied the committee’s hands.
The Chancery Court complaint, filed last August, targets the $194 million buyout, which ...
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