L e o S trine
In his office, beyond musical icons, there’s a photo of Brooks
wrote, adding that the legal test for determining whether the sale
Robinson, a childhood hero from Baltimore, where he was
had to be put to a vote was the economic value of the newspaper
born to teenage parents, who understood the leavening effect
“not how cool it would be” to be its publisher.
of education. (Strine’s brother, Michael, holds a Ph.D. in po-
Strine sees corporate law as a kind of democracy in action,
litical science from Johns Hopkins, and is currently executive
where at least in theory, there are checks and balances, such as
vice president and chief operating officer at the University of
boards getting their legitimacy from the election process. The
Virginia.)
challenge for the courts, he says, is to create ground rules that
The gallery includes a former boss, U.S. Sen. Tom Carper,
business people trust and to keep judges out of the middle of
who Strine first came to know as a student campaign organizer
things as much as possible.
at the University of Delaware. When Carper became governor in
Lecturing at the Institute for Law and Economics in Febru-
1993, Strine, by then working in the Wilmington office of Skad-
ary, Strine decried a trend of judges who “make stuff up” to
den, Arps, Slate, Meagher & Flom, with two judicial clerkships
achieve “case specific justice” rather than sticking to existing
under his belt, gave up the corporate law firm life to become his
standards of review or other principles.
legal adviser. The job included selling a skeptical legislature on
his boss’ reform-minded agenda.
existing precedents. Strine has been highly suspicious of transac-
“Leo was my spear carrier,” Carper says in an interview.
tions initiated by controlling shareholders. But he has also been
Carper nominated Strine to the Chancery Court in 1998, and
an advocate of deferring to the corporate decision-makers once
after a politically charged debate, in which critics said he lacked
certain safeguards are in place, such as where an independent
experience and temperament, he was narrowly confirmed, a few
board committee negotiates a deal or where it requires approval
days before his wife, Carrie, an occupational therapist, gave
from a majority of minority shareholders.
birth to the first of their two boys.
The Delaware Supreme Court, which hears appeals from his
At 34, Strine was the brash new kid on the bench, in contrast
court, has a different view, ruling in a 1994 case known as Kahn
to Chandler, the quintessential southern gentleman. But the
v. Lynch that all mergers with controlling stockholders were
men developed a mutual affection and a close working rapport.
subject to judicial review.
“Leo was someone who was very gracious, willing to roll up his
sleeves and help,” Chandler recalls.
lawyers racing to the courthouse to attack buyouts with little
“There was no learning curve,” he adds. “He hit the ground
or no proof of improper conduct, knowing that companies are
running. I gave him very significant, heavy duty corporate law
incentivized to settle quickly to get on with their deals.
cases and he just knocked them right out of the stadium.”
“Lynch has generated perverse incentives for both defense
Strine first attracted attention in 2001, when he ordered up
and plaintiffs’ counsel,” Strine opined in a 2005 shareholder suit
what was in effect a shotgun wedding between Tyson Foods Inc.
attacking a buyout of Cox Communications Inc.
and meatpacking company IBP Inc. Tyson tried to pull out of
the $3.2 billion deal saying that IBP had hidden adverse finan-
lawyers $4.9 million in fees to go away. Calling the suits “hastily
cial information. But Strine found that the information was part
drafted throwaways,” Strine said the lawyers had contributed
of the normal ebb and flow of the beef business, and ordered the
little or nothing to final terms of the buyout, and in a move that
chicken firm to the altar.
jolted the plaintiffs’ bar, cut the fee by more than two-thirds.
In 2004, he ruled that Conrad Black, the Canadian press
But he also thinks that lawyers should be amply rewarded
baron, had breached his fiduciary and contractual duties “per-
where they take genuine risks and succeed, such as in the mining
sistently and seriously” in connection with a proposed sale of
company flap.
Hollinger International Inc., the publishing firm Black then con-
That case involved allegations that Grupo Mexico forced a
trolled.
publicly held subsidiary, Southern Peru Copper Corp., to over-
Later, when Hollinger’s board proposed selling the Daily
pay for a third company, a Mexican mining firm that Grupo
Telegraph, the company’s flagship asset, Strine threw out a law-
owned.
suit by Black seeking to block the sale.
Strine found that the New York investment firm, Goldman
“The Telegraph sale does not strike at International’s heart or
Sachs, which advised Southern Peru, was effectively a tool of the
soul, if that corporation can be thought to have either one,” he
parent, and that a special board committee set up to evaluate the
2 4 w w w. l a w. u p e n n . e d u / a l u m n i
But he also has not hesitated to speak up when he sees flaws in
Strine thinks that leads to a kind of legal extortion: plaintiffs’
As part of a settlement, Cox had agreed to pay the plaintiffs’