Gail Weinstein is Senior Counsel, and Philip Richter and Warren de Wied are Partners at Fried, Frank, Harris, Shriver & Jacobson LLP. This post is based on a Fried Frank memorandum by Ms. Weinstein, Mr. Richter, Mr. de Wied, Steven Steinman, Randi Lally and Bret T. Chrisope and is part of the Delaware law series; links to other posts in the series are available here.
In connection with a stockholder activist campaign by certain Icahn-affiliated funds (the “Icahn Funds”) against Illumina, Inc., the Icahn Funds (which collectively owned less than 2% of Illumina’s stock) launched a proxy contest for three seats on Illumina’s board. One of the Icahn Funds’ nominees, who was also an employee of a different Icahn-affiliated entity, was elected to the board (the “Icahn-Affiliated Director”). The Icahn-Affiliated Director then obtained and shared confidential and privileged company information with the Icahn Funds, which the Icahn Funds used in crafting a derivative complaint against certain current and former Illumina directors.
In Icahn Partners v. deSouza, the Court of Chancery, in a letter opinion (Jan. 16, 2024), ruled that the Icahn-Affiliated Director was not entitled to share the information with the Icahn Funds. The Delaware Supreme Court, in a letter ruling (Apr. 11, 2024), rejected interlocutory appeal of the issue.