(Reuters) - Noble Energy Inc’s directors dodged former shareholders’ proposed class action accusing them of pushing for Chevron Corp’s $5 billion buy of the oil and gas producer over higher offers to improve their pandemic-hit stock packages, a Delaware judge said Wednesday.
Vice Chancellor Sam Glasscock III of the Delaware Chancery Court dismissed the lawsuit, finding that the board did not need to disclose information about a prior offer or explain why the directors' compensation packages increased as part of the 2020 deal.
Noble’s board has denied wrongdoing.
The shareholders sued the Noble board in January 2021, alleging that the directors used the deal to trigger an agreement that would increase their compensation packages if Noble was acquired. The complaint also accused the directors of rejecting a $6 billion offer for the company in 2018 because it would not have improved the board's pay.
Share price drops amid a nosedive in demand caused by the pandemic and a global oil bidding war had lowered the value of the directors' compensation packages, the investors said in the complaint.
In moving to dismiss the case in April, the board said it had not omitted any vital information about the 2020 deal and that the Chevron transaction was an “overwhelmingly popular merger formed during a historically challenging period.”
In Wednesday’s opinion, Glasscock agreed that Noble’s shareholders were fully informed enough to vote on the deal.
Attorneys for the shareholders and the Noble board did not immediately respond to requests for comment, and neither did a representative for Chevron.
The case is Galindo v. Stover, Delaware Court of Chancery, No. 2021-0031.
For the shareholders: Juan Monteverde of Monteverde & Associates
For the board: Robert Harrell, Charles Kelley, Joseph De Simone and Michael Rayfield of Mayer Brown.