NRCG obtains summary judgment on merger-related claims brought by preferred stockholder in Delaware Court of Chancery

Client(s) NRCG Group Holdings Corp.; NRC Group Holdings LLC

Jones Day obtained summary judgment on behalf of NRC Group Holdings Corp. and NRC Group Holdings LLC ("NRCG") on breach of contract and other claims asserted by a preferred stockholder in the Delaware Court of Chancery. The preferred stockholder alleged that a proposed merger between NRCG and a third party would unlawfully convert its preferred stock in NRCG into the common stock of a to-be-formed holding company in violation of the preferred stock's Certificate of Designations ("COD") and Delaware law. The preferred stockholder argued that the proposed merger would effectively amend the COD, entitling the preferred stockholders the right to vote as a class on the merger.

NRCG demonstrated that no class vote was required by the COD or Delaware law because, as permitted by Section 251 of the Delaware General Corporation Law, NRCG's certificate of incorporation would remain unaltered after the merger closed. In granting summary judgment from the bench after oral argument, the Vice Chancellor described the arguments set forth on behalf of NRCG as "very precise and very measured, and [they] approached the legal analysis the way ... it should be done, which, while technical and formal, ... is consistent with how these principles evolved under Delaware law."

SBTS, LLC v. NRC Group Holdings Corp., No. 2019-0566 (Del. Ch.)