## Facts

- The Topps Company, Inc., a Delaware corporation, agreed to a cash-out merger led by Tornante Company LLC and Madison Dearborn Partners at $9.75 per share.
- Topps’s CEO and chairman, Arthur T. Shorin, was expected to be retained post-merger along with much of management.
- The merger agreement included a 40-day go-shop permitting solicitation of other bids and acceptance of a superior proposal subject to contractual constraints.
- During the go-shop, Upper Deck (Topps’s principal competitor) expressed interest at $10.75 per share, and later reiterated $10.75 per share without a financing condition.
- Topps had required Upper Deck to sign a standstill restricting public offers and direct communications with Topps stockholders; Topps continued to enforce it while pursuing the $9.75 deal.
- Topps did not designate Upper Deck as an “Excluded Party” (which would have allowed continued post–go-shop negotiations) and moved toward a stockholder vote on the merger.
- The proxy materials supporting the merger described Upper Deck’s interest in a manner the court found likely misleading and did not disclose management-retention assurances relevant to conflicts.

## Issues

1. In a change-of-control transaction, whether the board likely breached its Revlon duties by favoring a management-friendly bid and not reasonably engaging with a higher-priced alternative.
2. Whether fiduciaries may enforce a standstill to prevent a bidder from making truthful, non-coercive communications to stockholders about a superior proposal while a merger vote is pending.
3. Whether the proxy statement was materially misleading or omitted material facts regarding competing bids and management’s post-merger interests, warranting a preliminary injunction.

## Decision

- The Court of Chancery partially granted preliminary injunctive relief.
- The court enjoined the stockholder vote until Topps issued corrective disclosures concerning (i) the seriousness and terms of Upper Deck’s proposals and (ii) management-retention understandings or expectations.
- The court limited enforcement of Upper Deck’s standstill to permit truthful, non-coercive communications to Topps stockholders about Upper Deck’s competing bid.
- The court did not enjoin the merger agreement itself or prohibit Topps from proceeding after curing disclosure defects and allowing stockholders to receive information necessary for an informed vote.

## Legal Principles

- In a sale of control, directors are subject to enhanced scrutiny and must act reasonably to obtain the best value reasonably available (Revlon duties).
- A board may not use deal-protection devices (including standstills) in a manner that materially impairs stockholder choice or prevents stockholders from receiving material information about a credible superior alternative.
- Stockholders voting on a merger must receive full and fair disclosure of material information, including accurate characterization of competing bids and material facts bearing on management conflicts (such as management-retention assurances).
- Preliminary injunctive relief may issue where plaintiffs show a likelihood of success on the merits (often most clearly on disclosure), irreparable harm from an uninformed vote, and equities favoring temporary relief tailored to protect the vote.

## Conclusion

The court required corrective disclosures and relaxed standstill enforcement to ensure an informed stockholder vote and meaningful access to information about a higher competing bid, while declining to block the transaction outright at the preliminary stage under Revlon enhanced scrutiny.


In re The Topps Co. S'holders Litig., 926 A.2d 58 (Del. Ch. 2007)