Ebay announced today that Chancellor William B. Chandler III of the Delaware Court of Chancery ruled in the company’s favor in a shareholder suit filed against Craigslist, and its majority shareholders Jim Buckmaster and Craig Newmark. The ruling overturns a series of unlawful transactions undertaken by Craigslist’s majority shareholders to dilute eBay’s minority share in the company. The ruling rescinds a poison pill and right of first refusal adopted by the controlling shareholders in January 2008 and restores eBay’s 28.4 percent share in Craigslist.
In his opinion Ebay said, Chancellor Chandler found that “Jim and Craig breached their fiduciary duty of loyalty by using their power as directors and controlling stockholders to implement an interested transaction that was not entirely fair to eBay, the minority stockholder.”
Douglas A. McIntyre