Judge tosses shareholder lawsuit against Martha Stewart
DOVER, Del. (AP) — A Delaware judge has dismissed a class-action lawsuit filed by former stockholders of Martha Stewart Living Omnimedia over the company’s 2015 acquisition by Sequential Brands.
The lawsuit said that Stewart leveraged her position as controlling stockholder to secure greater consideration for herself than was paid to other stockholders. They also accused Sequential of aiding and abetting Stewart’s alleged breach of her fiduciary duties.
The judge said Friday that Stewart was entitled to the deference given to corporate leaders under Delaware’s “business judgment” rule.
He also said the plaintiffs likely could not prove that Stewart engaged in a conflicted transaction or that they suffered any damages as a result. The judge said that the consideration Sequential offered to Martha Stewart stockholders actually increased after negotiations with her began.