Professor Bainbridge...on law, politics, religion, culture & food

Omnicare v. NCS Healthcare: The § 251 issue

In an earlier post, I discussed the Delaware supreme court's puzzling decision in Omnicare v. NCS Healthcare, 818 A.2d 914 (Del. 2003). We noted therein that the NCS-Genesis merger agreement required NCS’ board to submit the Genesis deal to a shareholder vote even if the board withdrew its recommendation that the shareholders approve the deal. This is known as a § 251 clause. As with so much else in the Omnicare decision, the majority's treatment of § 251 is quite troubling.