In the case of Katz v. Bregman (431 A.2d 1274 (Del.Ch.1981)) a corporation attempted to sell assets
that constituted more than 51% of the corporations total assets and generated
about 45% of the net sales. When the directors did not hold a shareholder vote
to approve the sale, the shareholders who were opposed to the sale sued to stop
The Court found that Delaware
law (8 Del.C. §271(a)) requires
majority shareholder approval for the sale of "all or substantially
all" of the assets of a Delaware corporation.
The Court found that based on §271(a), an asset sale of this magnitude required a
Compare this case with Gimbel
v. Signal Companies, Inc. (316 A.2d
599 (Del.Ch. 1974)), which found that a shareholder vote was not required
when the corporation was attempting to sell slightly less assets.