On December 22, 2017, Chancellor Andre G. Bouchard of the Delaware Court of Chancery declined to dismiss a direct breach of fiduciary duty claim brought by a shareholder plaintiff against directors and officers of casino company Twin River Worldwide Holdings, Inc. (“Twin River”) for allegedly misleading disclosures in an offer-to-purchase circular in connection with a tender offer. Chatham Asset Mgmt. LLC, et al. v. Papanier, et al., C.A. No. 2017-0088-AGB (Del. Ch. Dec. 22, 2017). Plaintiff, which sold a portion of its shares in the tender offer, alleged that the circular stated that defendants “may” sell shares “from time to time,” but the “true intent” of defendants was to increase the price of Twin River stock and sell their shares shortly after the tender offer closed (even though they ultimately did not). Plaintiff, however, acknowledged that it participated in the tender offer only because of a regulatory requirement that capped its ownership position. The Court found that the complaint stated a disclosure claim because “stating an outcome as a possibility” when in fact there was a “firm intention by defendants to sell their shares” is misleading. But the Court noted that the “recourse appears to be limited” to nominal damages because plaintiff’s allegations “suggest that it likely will be unable to establish reliance and causation.”

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