Nixon v. Blackwell

VEASEY, Chief Justice:

In this action we review a decision of the Court of Chancery holding that the defendant directors of a closely-held corporation breached their fiduciary duties to the plaintiffs by maintaining a discriminatory policy that unfairly favors employee stockholders over plaintiffs. The Vice Chancellor found that the directors treated the plaintiffs unfairly by establishing an employee stock ownership plan (“ESOP”) and by purchasing key man life insurance policies to provide liquidity for defendants and other corporate employees to enable them to sell their stock while…