## Facts

- Sun Chemical Corp., a Delaware corporation, proposed acquiring all assets of Ansbacher-Siegle Corp., a smaller New York corporation engaged in organic pigments.
- Norman E. Alexander, Sun’s president, directly or indirectly owned all of Ansbacher’s stock.
- The transaction was structured as a sale of assets: Sun would take all Ansbacher assets and assume specified liabilities in exchange for Sun stock issued to Ansbacher.
- After the asset transfer, Ansbacher would dissolve and distribute the Sun stock to its shareholder (Alexander).
- Sun submitted the transaction to its stockholders for approval under the Delaware statute governing sales of assets, not the merger statute; the required stockholder majority approved.
- Sun stockholders sued, alleging the transaction was, in substance, a merger that failed to satisfy merger-specific requirements (including a two-thirds vote and appraisal-related protections) and asserting the deal was arranged for Alexander’s benefit.
- The Court of Chancery dismissed the “illegal/de facto merger” claim but allowed a separate claim challenging the transaction as self-interested and unfair to proceed.
- The stockholders appealed only the dismissal of the de facto-merger/illegal-merger claim.

## Issues

1. Whether Sun’s acquisition of all of Ansbacher’s assets for Sun stock, followed by Ansbacher’s dissolution and distribution of Sun stock, must be treated as a de facto merger under Delaware law.
2. Whether a transaction properly carried out under the Delaware asset-sale statute can be recharacterized as a merger to impose merger-specific voting and appraisal-related requirements.

## Decision

- The Delaware Supreme Court affirmed the dismissal of the de facto-merger claim.
- The court held the transaction was a purchase and sale of assets, not a merger, because it was executed pursuant to the statutory asset-sale provision.
- The court declined to import merger-statute requirements and rights (including merger voting thresholds and appraisal-related protections) onto a transaction validly structured as an asset sale.
- The decision left undisturbed the Chancery ruling permitting the separate fairness/self-interest claim to continue.

## Legal Principles

- When a corporate transaction is authorized and completed in compliance with a specific statutory provision, its validity and the stockholder rights it triggers are determined by that provision, even if the transaction produces results similar to those obtainable under another provision.
- Delaware will not treat an asset sale as a merger solely because its practical effect resembles a merger; “de facto merger” recharacterization is limited where the statute provides an independent, permissible transactional form.
- Respect for statutory transactional forms does not bar equitable scrutiny for fiduciary misconduct; statutory characterization and fairness review are distinct inquiries.

## Conclusion

The court held that an all-assets acquisition structured and approved as a statutory asset sale is not reclassified as a merger merely because it has merger-like economic consequences, though claims alleging self-interested or unfair conduct may still proceed on fiduciary-duty grounds.


Heilbrunn v. Sun Chem. Corp., 150 A.2d 755 (Del. 1959)