"We will abide by the rulings of the Delaware Courts," Raleigh, N.C.-based Martin Marietta said in a statement. "Beyond that we have no further comment."
Martin Marietta had asked the high court to reverse a May 4 ruling in which Delaware Chancellor Leo E. Strine Jr. barred the company from pursuing its proxy fight for four months because he found that it had violated the terms of two confidentiality agreements in making a $4.7 billion bid for Vulcan on Dec. 12. As part of the bid, Martin Marietta nominated a slate of four directors who sought election to the Vulcan board, which is staggered. Martin Marietta could resume its bid after the four months have run but would be unable to take control of Vulcan's board until 2014.
All five Supreme Court justices heard the appeal, which began at 10:30 a.m. and lasted about an hour. The judges recessed for about 20 minutes before returning with their decision, which Chief Justice Myron Steele read. He offered little color on the court's reasoning.
Strine warned that the appeal was a long shot at a May 14 teleconference where he rejected Martin Marietta's request to stay his ruling pending the appeal, which would have allowed the bidder to continue with its proxy fight. Strine called the matter "a straightforward contract case" rather than one "about whether Vulcan's board of directors is fulfilling its fiduciary duties to its stockholders."
"It's a very fact-specific case about the specific words used by specific parties in a specific context," the judge said. "I applied settled standards of Delaware contract law. And I made factual findings and specific ones based on a factual record."
The nature of the decision made a reversal from the Delaware Supreme Court very unlikely, since Strine's opinion primarily involved matters of fact and did not confront novel legal issues. Appellate courts are bound to give deference to a trial court judge's findings of fact absent a showing of clear error but may review his conclusions of law.
Robert Zimet, a partner at Skadden, Arps, Slate, Meagher & Flom LLP in New York, argued the appeal for Martin Marietta, while Theodore Mirvis of Wachtell, Lipton, Rosen & Katz in New York advocated for Vulcan. Zimet was Martin Marietta's lead lawyer in a four-day trial before Strine that began on Feb. 28. Wachtell's William Savitt took the lead for Vulcan in the lower court.
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