Preview:

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

BRUNO RUGGIERO, FRANCESCO RUGGIERO, VINISHA AGNOHOTRI, ANMOL AGNOHOTRI, Plaintiffs, v. FUTURAGENE, plc., a corporation organized under the laws of England and Wales (f/k/a Overnet Data, plc.), MARK PRICHARD, an individual, PETER TOYNTON, an individual, MICHAEL FROMM, an individual, and KANNAN GRANT, an individual, Defendants.

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

C.A. No. 2661-VCL

MEMORANDUM OPINION AND ORDER Submitted: November 13, 2007 Decided: February 1, 2008 Kenneth J. Nachbar, Esquire, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, Delaware; LELAND, PARACITINI, STEINBERG, MATZGER & MELNICK, LLP, San Francisco, California, Attorneys for the Plaintiffs. Gregory V. Varallo, Esquire, Geoffrey G. Grivner, Esquire, RICHARDS, LAYTON & FINGER P.A., Wilmington, Delaware; Michael S. Poulos, Esquire, Kenneth L. Schmetterer, Esquire, Emily S. Schlesinger, Esquire, DLA PIPER USA LLP, Chicago, Illinois, Attorneys for the Defendants.

LAMB, Vice Chancellor.

An Indiana corporation engaged in a stock-for-stock merger with an English corporation, which created a Delaware subsidiary to effectuate the merger. The former stockholders of the Indiana corporation who are now stockholders in the English corporation sue the English corporation and its directors for breach of the merger agreement and breach of fiduciary duties. The defendants move to dismiss seeking, primarily, dismissal of the claims against the directors of the English corporation for lack of personal jurisdiction. Because no basis on which to rest the exercise of personal jurisdiction over these individuals is either alleged or argued to exist, the motion will be granted. I. The plaintiffs are some, but not all, of the former stockholders of FuturaGene, Inc., an Indiana corporation. Defendant FuturaGene, plc is organized under the laws of England and Wales. Mark Pritchard, Peter Toynton, Michael Fromm, and Kannan Grant (the "Individual Defendants") are directors and officers of FuturaGene, plc. They reside, respectively, in England, Nebraska, and Indiana. FuturaGene, Inc.'s business plan was to assemble a portfolio of intellectual property rights in the area of agricultural biotechnology and to license these rights to others. The company built its portfolio by acquiring exclusive commercial rights from scientists and institutions. In 2004, OverNet Data, plc, an English corporation and the predecessor to FuturaGene, plc, offered to purchase 1

FuturaGene, Inc. To that end, OverNet Data created a Delaware subsidiary called Project Greenfield Acquisition Corporation in order to effectuate the merger. Although not alleged in the complaint, it appears that Toynton, Fromm, and Grant were directors of Project Greenfield.1 On May 19, 2004, OverNet Data and Project Greenfield entered into a Merger Agreement with FuturaGene, Inc. and its stockholders. Under the Merger Agreement, Project Greenfield merged with and into FuturaGene, Inc., resulting in FuturaGene, Inc. becoming a wholly owned subsidiary of OverNet Data. Following the merger, OverNet Data changed its name to FuturaGene, plc. The Merger Agreement provides that the plaintiffs would exchange their shares of FuturaGene, Inc. for approximately 10.2 million shares, or approximately 30% of the total shares outstanding, of OverNet Data. In addition, the Merger Agreement provides that the FuturaGene, Inc. stockholders could receive three additional payments, totaling up to 26 million additional shares, if FuturaGene, plc achieved certain "milestone events." The milestone events include events such as FuturaGene, plc being granted an exclusive license over three new gene discoveries, or receiving offers from third parties to license any element of the company's intellectual property.2 Section 7.7 of the Merger Agreement specifies

1 2

See Hr'g Tr. 17. See Merger Agmt.

Download 102600.pdf

Delaware Law