The Delaware Court of Chancery applied the rarely-used acquiescence doctrine to dismiss a lawsuit filed by Lehman Brothers Holdings Inc. and T. Rowe Price High Yield Fund Inc. against a company that owns and operates Spanish-language television stations throughout the country. Although the plaintiffs claimed they had acquired certain rights because the defendant had not paid a dividend in four consecutive quarters, the court held that the plaintiffs forfeited those rights because they did nothing to stop the dividend miss from occurring.
“I find that, here, where all information necessary for the plaintiffs’ assessment of their rights was contained in publicly-available documents and disclosures, and where the crucial fact in relation to a [voting rights triggering event] … is uniquely within the interest of the plaintiffs as preferred stockholders with large ownership interests in the instrument, the plaintiffs’ knowledge of the circumstances affecting their rights as stockholders must be imputed to them,” said Vice Chancellor Sam Glasscock III in Lehman Brothers Holdings v. Spanish Broadcasting System. “Such a rule is not inconsistent with this court’s approach to other applications of estoppel.”
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