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Delaware Chancery Criticizes Auction Process for Focus on Private Equity Buyers, Among Other Issues
March 27, 2007 Full PDF
The Delaware Chancery Court recently faulted the board of directors of Netsmart Technologies, a provider of enterprise software solutions to healthcare businesses, for running a shoddy auction of the company. While the Court ultimately refused to grant a broad injunction against the pending acquisition of Netsmart by Insight Venture Partners, a private equity firm, the Court was very critical of the board's exclusive focus on private equity buyers and other aspects of its auction process. The opinion is rich with lessons that should be reviewed by any Delaware company considering strategic alternatives.