Chancery's Approach To Board Seat Agreement Disputes
Law360, New York ( June 23, 2015, 10:30 AM EDT) -- In Partners Healthcare Solutions Holdings LP v. Universal American Corp. (June 17, 2015), the Delaware Chancery Court granted summary judgment to defendant Universal American Corp. , rejecting the contentions of one of UAM's largest stockholders, Partners Healthcare Solutions Holdings, that UAM had breached a board seat agreement by imposing conditions on the seating of Partners' designee to the UAM board that were not provided for in the agreement. Partners, a subsidiary of a private equity firm, acquired its stake in UAM through, and the board seat agreement had been entered into in connection with, UAM's acquisition of a subsidiary of Partners (the "portfolio company"). The dispute relating to the seating of Partners' board designee arose at the same time that UAM and Partners were involved in a separate fraud litigation arising from the portfolio company's performance after the merger. . . .
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