## Facts

- News Corporation proposed a reorganization to shift its corporate domicile from Australia to Delaware, conditioned on separate class shareholder approval.
- Institutional investors and proxy advisors objected that Delaware law generally permits a board to adopt and extend a shareholder-rights plan (poison pill) without a shareholder vote.
- Investors sought a charter provision requiring shareholder approval for any poison pill; the company declined but negotiated and announced a board “poison pill policy.”
- The company publicly communicated that if a rights plan were adopted, it would (1) expire after one year unless shareholders approved an extension and (2) not be renewed on substantially similar terms without shareholder approval.
- After these assurances, shareholders approved the reorganization and Delaware reincorporation.
- Soon after reincorporation, the board adopted a poison pill in response to a potential hostile acquirer.
- The board later extended the pill without seeking shareholder approval.
- Shareholders sued, alleging (i) breach of contract and/or promissory estoppel based on the policy and related communications, (ii) fraud/misrepresentation, and (iii) breach of fiduciary duty.
- Defendants moved to dismiss; the opinion addressed which claims were adequately pleaded.

## Issues

1. Whether the company’s poison pill policy and related public communications plausibly constituted a binding contract or enforceable promise restricting pill extensions absent shareholder approval.
2. Whether such a shareholder-facing commitment is invalid as an impermissible restriction on the board’s statutory authority to manage the corporation under DGCL § 141(a).
3. Whether the complaint adequately pleaded fraud/misrepresentation and fiduciary duty claims distinct from, and not duplicative of, the contract-based theory.

## Decision

- The court denied the motion to dismiss as to the contract-based claims, holding the complaint plausibly alleged an enforceable commitment to submit any poison pill extension to a shareholder vote.
- The court rejected, at the pleading stage, the argument that the alleged commitment was per se invalid under DGCL § 141(a).
- The court granted the motion to dismiss as to the fraud/misrepresentation and fiduciary duty claims.

## Legal Principles

- At the motion-to-dismiss stage, a court must accept well-pleaded facts as true and determine only whether the plaintiff has stated a plausible claim for relief.
- Public corporate communications tied to obtaining shareholder approval for a transaction can plausibly support an inference of a bargained-for, enforceable governance commitment rather than a purely revocable internal guideline.
- DGCL § 141(a) limits directors’ ability to surrender statutory management authority, but it does not automatically void every agreement that conditions or structures board action; enforceability may be fact-dependent.
- Where the alleged wrongdoing is failure to perform a specific negotiated commitment to shareholders, contract-based remedies may be the proper vehicle; overlapping fraud and fiduciary duty claims may be dismissed when inadequately pleaded or duplicative.

## Conclusion

The court allowed shareholders to proceed on a theory that the company made an enforceable commitment, in exchange for support of Delaware reincorporation, to submit any extension of a poison pill to a shareholder vote, while dismissing the accompanying fraud and fiduciary duty claims at the pleading stage.


UniSuper Ltd. v. News Corp., 2005 WL 3529317 (Del. Ch. Dec. 20, 2005)