Storming the Castle
Every Desi has his Lucy, Felix his Oscar and more aptly Mac his PC (let’s just not get into Roberts and Scalia, OK?). So it’s only right that Bob has his Leo. It’s a momentary bafflement, to the plentiful French, English, Chinese, Japanese and South American students why they are being taught by a young guy from Delaware in suspenders and Cordovan shoes. Let alone to the students from New Jersey. They’ve become accustomed to Leo over the past month, rushing in, a blur of energy that is nonstop motion and expression, taking off his jacket and challenging, jabbing and thinking with them, for them. He is the perfect counterpoint to the contemplative and suggestive Clark. At the outset, Strine has taught a little more to the middle than might have been expected. A veteran teacher at Vanderbilt and Penn, he is tucking his wings in a bit with his new course. Law review articles and early case law have all been assigned, as have Wachtell Lipton’s Takeover Law & Practice Guide. Still, it’s one thing to tweak the powerful from a courtroom in Wilmington, it’s another to do so in Pound Hall. Strine rocketed to the top of the Delaware court without a Ph.D. or a Supreme Court clerkship on his notion that today’s practice is dictated by the street, by those who make the money, do the deals and win the cases. He has riled corporate powers by establishing a judicial posture that mirrors the American business landscape, which is to say he calls a greedy swindling backdating pig a greedy swindling backdating pig and allows those who play by well-negotiated contracts the slippage required because, in truth, shit happens. His posture is real, it’s competitive, but it offers few safe harbors to anyone, particularly those who don’t know the street. Strine earned his perspective in “the best job he ever had,” counsel and policy director to Delaware Governor Carper, who oversaw a multibillion-dollar state budget and more than 10,000 employees in a strong gubernatorial system responsible for welfare, prisons, state police and education. The role taught Strine the pressure and time constraints faced by decision-makers. “You can’t get paralyzed, and it’s important to make decisions in real time,” he says, “even though you’ll make mistakes.” Whether on the bench, in class, or laboring over an opinion in solitude, Strine’s impact on American business is like Catfish Hunter’s combination of speed and precision, creating a body of work both reflective and urgent. Though by nature introspective and a little insecure, his need to bring the street to the law pushes every boundary that exists. His legions of admirers worry his candor will inhibit his ascension (not unlike those who worried that Richard Posner’s rampant writing would hold him back), but it may just be that a little fresh air is desirable in a world in which Justice John Roberts seems like a hoot because he followed Justice Rehnquist. In class, Strine is far more buttoned-down, with only the occasional irresistible quiet zinger, leading the students through smart and witty discussions of a fairly straightforward catechism of case law. That has given them good grounding for tonight’s show, “The Merger Agreement As a Contract” in which Leo will teach one of his hallmark cases: In re IBP Inc. Shareholders Litigation, 789 A.2d 14 (Del.Ch.2001). American legal education offers an abundance of precedent of judges and other participants in published decisions who turn around and teach their cases. But typically, they do so in the safety of the third person, at some remove from actual authorship -- the austere precedent no longer being considered the product of human hands. That’s not Leo. He jumps in, rummages around, delights in his prose, gets into his thought process, his take on the players. He’s the Simon Cowell of the nation’s best state judicial bench and he leaves no room for guessing on who will be ejected. IBP may be his most deliriously fun case ever, allowing him to describe cozy negotiations as a lovefest while writing of “an expected trough in the cattle cycle.” IBP, the nation’s number one beef and number two pork producer, agreed to be bought by Tyson, the nation’s leading poultry producer for $30 a share in cash, Tyson stock or a combination of the two. (A competing bid by Smithfield Foods, the nation’s number one pork producer, was devoured, if you will, by Tyson.) “To say that Tyson was eager to win the auction is to slight its ardent desire to possess IBP,” Strine wrote in his opinion. Tyson “hoped to create the world’s preeminent meat products company – a company that would dominate the meat cases of supermarkets in the United States and eventually throughout the globe.” So hardy was Don Tyson’s appetite for IBP, Strine took judicial notice that Don Tyson – who controlled 90 percent of the chicken producer – “had even been dreaming about the companies’ combined balanced sheets at bedtime.” However, after he won the bidding, the fortunes of both Tyson and IBP faltered and Don Tyson sought to get out of the deal, citing a late-discovered SEC investigation. Strine found that Tyson had no legal basis to avoid its obligation to consummate the merger. Specifically, he found that IBP had not suffered a “material adverse effect” under the agreement that would allow it to chicken out. As a result, he ordered Tyson to go through with the merger. The case is a breath of fresh air, as is the professor/judge’s take on it. Together they provide a perfect illustration of the new contextual law, which looks behind the asserted causes and claims to true business motivation as expressed by the players making the decisions and deals. Of the four top executives at IBP, “it is common for ‘big picture’ executives to view and speak about issues from a larger strategic perspective that is less specific and technically precise than executives like CFOs and General Counsels who are charged with getting the details precisely right,” Strine wrote. He takes glee in quoting an executive among whose memorable utterances were “the progeny of a female dog who should be hanged on Main Street in front of a crowd.” He is honest that he hesitated about the correct outcome, and delights in dissecting reps and warranties, the corporate lawyer’s equivalent of original intent. Clark looks on, bemused, watching a protégé’s steps, aware he will stumble, but also that he can run. Page: 2 of 5 pages for this article < 1 2 3 4 > Last »
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