TPG-Axon, beneficial owner of 7.3 percent of the outstanding shares of SandRidge Energy, Inc. (NYSE: SD) (“SandRidge” or the “Company”), noted Delaware Chancery Court Judge Leo E. Strine Jr.’s ruling that SandRidge Energy’s Board of Directors violated its fiduciary duty to shareholders by refusing to approve TPG-Axon's slate of highly-qualified director nominees for purposes of the Company's "Proxy Puts".
As a result of this "fundamental offense to the dignity of the corporate office," the Court barred SandRidge from continuing to solicit consent revocations until TPG-Axon's director nominees are approved for purposes of the Proxy Puts and invalidated all consent revocations already received.
In regards to the ruling, TPG-Axon notes that it is not surprised by the Court’s decision and reiterates its strong belief that throughout its consent solicitation SandRidge’s current Board of Directors has acted in a manner to entrench themselves and prevent a fair process from playing out. TPG-Axon believes the ruling further demonstrates why SandRidge directors must be replaced – time and time again, they have shown disregard for stockholder, obsequiousness to CEO Tom Ward, and persistently prioritized their own self-interest.
In its 38-page decision, the Court notes the following:
- “…the board has likely acted with an absence of good faith and reasonableness inconsistent with their fiduciary duties.”
- “…the incumbent board’s behavior is redolent more of the pursuit of an incremental advantage in a close contest, where a small margin may determine the outcome, than of any good faith concern for the company, its creditors, or its stockholders.”
- “…the incumbent board has admitted it has no basis to doubt the integrity of the TPG slate or the basic qualifications of that slate to serve with competence as the directors of a public company…”
- “Having failed to exercise its discretion in a reasonable manner, the incumbent board should be enjoined from soliciting consent revocations, voting any proxies it received from the consent revocations, and impeding TPG’s consent solicitation in any way until the incumbent board has approved the TPG slate.”