Restaurant Brands International (RBI) has scored a critical legal victory, smoothing the path for its multibillion-dollar acquisition of Burger King China. A Delaware court tossed out a shareholder lawsuit aiming to derail the deal, reinforcing the company’s governance structure and sidestepping potential liability landmines.
The ruling, handed down late Friday by Vice Chancellor Paul A. Fioravanti, found that shareholders failed to present compelling evidence of bad faith or conflicted decision-making by RBI’s board. The dismissal removes a key obstacle from RBI’s ambitious expansion plans in China.
Legal Showdown in Delaware’s Corporate Battlefield
The lawsuit, filed by shareholders in May 2022, targeted an equity-based compensation package tied to the acquisition. The plaintiffs argued that the arrangement, potentially worth billions, unfairly benefited RBI’s leadership while sidestepping shareholder interests.
The case landed in Delaware’s Court of Chancery, a venue that has become ground zero for high-stakes corporate governance battles. The plaintiffs contended that several RBI directors were too conflicted to fairly assess the deal. However, Fioravanti’s 86-page opinion dismantled these claims, asserting that the plaintiffs relied on exaggerated allegations rather than hard evidence.
