Plaintiffs had brought an action for breaches of fiduciary duty and violations of the Securities Exchange Act of 1933 stemming from alleged mismanagement of MAT Five LLC. MAT Five then commenced a tender offer for its own shares, which plaintiffs challenged for inadequate disclosure. A subsequent settlement between the parties provided MAT Five investors the option to tender and receive additional consideration, retain all MAT Five shares, elect to receive the consideration offered in the original tender offer, or opt out of the settlement. The Court of Chancery approved the proposed settlement, finding it fair and reasonable because it significantly improved the disclosures, increased the available monetary value of the tender offer and provided an expansive range of options for the harmed investors. The Court supported its fairness determination by noting that 80% of MAT Five investors chose to participate in the settlement and an opt out clause protected those that did not.
