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SFF-TIR, LLC v. Stephenson

United States District Court, N.D. Oklahoma

August 29, 2017

SFF-TIR, LLC; STUART FAMILY FOUNDATION, INC.; ALAN STUART 2012 GST FAMILY TRUST; STUART 2005 GST FAMILY TRUST; CELEBRATION, LLC; ANURAG AGARWAL; PETER BUCKLEY; VINCENT SIGNORELLO and RODNEY M. REYNOLDS, Plaintiffs,
v.
CHARLES C. STEPHENSON, JR.; CYNTHIA A. FIELD; PETER BOYLAN, III; LAWERENCE FIELD; CYPRESS ENGERGY PARTNERS-TR, LLC; CEP CAPITAL PARTNERS, LLC; CYPRESS ENERGY HOLDINGS, LLC and TULSA INSPECTION RESOURCES, LLC, Defendants.

          Jamison A. Diehl Akin Gump Strauss Hauer & Feld LLP (NY) New York, New York R. Stratton Taylor Mark H. Ramsey Clinton Derek Russell Taylor Burrage Foster Mallett Downs Ramsey & Russell Claremore, Oklahoma, Stuart Kagen Daniel A. Cohen Joshua C. Gillette Kyla Janine Grant Kagen & Caspersen New York, New York Attorneys for the Plaintiffs

          Toney Daniel Foster Taylor Burrage Foster Mallett Downs Ramsey & Russell Claremore, Oklahoma Attorneys for Plaintiff Stuart 2005 GST Family Trust

          Frederic Dorwart Paul DeMuro Sarah Wishard Poston Nora Rose O'Neill Fredric Dorwart Lawyers Tulsa, Oklahoma Attorneys for the Defendants

          MEMORANDUM OPINION AND ORDER

         THIS MATTER comes before the Court on the Defendants' Motion for Reconsideration of Order Granting Plaintiffs' Motion for Partial Summary Judgment on Breach of Fiduciary Duty (Doc. 272) and Memorandum Opinion and Order (Doc. 274), filed May 9, 2017 (Doc. 280)(“Motion for Reconsideration”). The Court held hearings on April 26, 2017, and June 29-30, 2017. The primary issues are: (i) whether the Court erred in its interpretation and application of Delaware's entire-fairness standard in its Order, filed April 12, 2017 (Doc. 272), and in its Memorandum Opinion, filed April 25, 2017 (Doc. 274)(“MO”); and (ii) whether the Court correspondingly erred when it granted the Plaintiffs' request for partial summary judgment on breach of fiduciary duty. The Court analyzes the Defendants' Motion for Reconsideration under the United States Court of Appeals for the Tenth Circuit's multifactor test in Servants of the Paraclete v. Does, 204 F.3d 1005 (10th Cir. 2000), and takes the further step of using its permitted discretion to examine an interlocutory order using de novo review. The Court concludes that this analysis provides no sound reason for the Court to grant the Defendants' Motion for Reconsideration. The Court, accordingly, denies the Motion for Reconsideration.

         FACTUAL BACKGROUND

         The Court adopts the factual background it previously stated in its Memorandum Opinion and Order, filed April 25, 2017 (Doc. 274). Defendant “Charles Stephenson is the owner of Regent Private Capital.” Defendants' Motion for Summary Judgment on Acquiescence Defense and Brief in Support ¶ 1, at 7, filed April 3, 2015 (Doc. 83)(“Defendants' Acquiescence MSJ”)(stating this fact).[1] See Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment on Acquiescence Defense ¶ 1, at 8, filed April 20, 2015 (Doc. 84)(“Response to Defendants' Acquiescence MSJ”)(not disputing this fact). “Defendant Cynthia Field is the daughter of Defendant Charles Stephenson.” Plaintiffs' Memorandum of Law in Support of Motion for Partial Summary Judgment on Breach of Fiduciary Claims ¶ 1, at 3, filed September 14, 2015 (Doc. 157)(“Plaintiffs' MSJ”)(stating this fact). See Defendants' Response in Opposition to Plaintiffs' Motion for Partial Summary Judgment on Breach of Fiduciary Duty Claims (Doc. 157), at 2, filed October 5, 2015 (Doc. 170)(“Response to Plaintiffs' MSJ”)(not disputing this fact). “Defendant Lawrence Field is the husband of Defendant Cynthia Field and the son-in-law of Defendant Charles Stephenson.” Plaintiffs' MSJ ¶ 2, at 3 (stating this fact). See Response to Plaintiff's MSJ at 2 (not disputing this fact). “Defendant CEP-TIR, LLC['s] . . . principals are Defendants Stephenson, Cynthia Field and Peter Boylan, [sic] III.” Plaintiffs' MSJ ¶ 3, at 3 (stating this fact).[2] “In 2009, Regent and Mr. Stephenson individually became together TIR Inc.'s largest shareholder owning approximately 40% of the TIR Inc. shares.” Defendants' Acquiescence MSJ ¶ 1, at 7 (stating this fact).[3] “At the same time a number of the Plaintiffs associated with Alan Stuart acquired a minority interest in TIR Inc.” Defendants' Acquiescence MSJ ¶ 3, at 7 (stating this fact).[4] “Alan Stuart is a ‘seasoned, successful, long-term investor with more than 40 years' experience in business development, investment management, and corporate governance.'” Defendants' Acquiescence MSJ ¶ 4, at 7 (stating this fact).[5] “The Defendant Lawrence Field, the son-in-law of Mr. Stephenson and an officer of Regent, became the chairman, and Alan Stuart became a member of the board of directors of TIR Inc.” Defendants' Acquiescence MSJ ¶ 5, at 7 (stating this fact). See Response to Defendants' Acquiescence MSJ ¶ 1, at 8 (not disputing this fact). “In February 2013, Alan Stuart prepared a proposal for Mr. Field, which he named ‘Project Poirot' to acquire control of TIR, Inc. at $369, 507 per share which he later increased to $385, 175.” Defendants' Acquiescence MSJ ¶ 6, at 7 (stating this fact).[6] “On February 11, 2013, Stuart purchased individual shareholder J.W. Lorett's TIR Inc. shares for $275, 000 per share.” Defendants' Acquiescence MSJ ¶ 7, at 7 (stating this fact).[7] “On March 21, 2013, Stuart presented an offer to the TIR board for TIR Inc. shares of $380, 382 per share.” Defendants' Acquiescence MSJ ¶ 8, at 7 (stating this fact).[8] “On May 16, 2013, Alan Stuart revised his offer to the board, increasing the repurchase price to $413, 143 per share.” Defendants' Acquiescence MSJ ¶ 9, at 8 (stating this fact).[9] “The Defendants [Charles C.] Stephenson, [Peter] Boylan, and [Cynthia A.] Field were principals in Cypress Energy Partners-TIR, LLC (“Cypress Energy Partners”). Defendants' Acquiescence MSJ ¶ 10, at 8 (stating this fact)(brackets added). See Response to Defendants' Acquiescence MSJ ¶ 1, at 8 (not disputing this fact). “In 2013, two TIR Inc. directors (Alan Stuart on the one hand and Lawrence Field on the other hand) [sought] to acquire control of TIR Inc.” Defendants' Acquiescence MSJ ¶ 11, at 8 (stating this fact)(relying on Videotape Deposition of Rodney Reynolds Taken on Behalf of the Defendants (taken November 17, 2014), filed April 3, 2015 (Doc. 83-11)(“Reynolds Depo.”).[10] “In June 2013, the Defendants [completed] the bidding process to acquire control of TIR Inc.” Defendants' Acquiescence MSJ ¶ 13, at 8 (stating this fact)(relying on Affidavit of Randall Lorett, filed April 3, 2015 (Doc. 83-2)(“Lorett Aff.”).[11]

         “On June 26, 2013, Defendant CEP-TIR, LLC acquired 26.45 shares of TIR from certain other shareholders, known as the Pooled Shareholders, in voluntary sales transactions.” Plaintiffs' MSJ ¶ 4, at 3 (emphasis in the original)(stating this fact). See Response to Plaintiffs' MSJ at 2 (not disputing this fact). “Defendants subsequently referred to this share acquisition as the ‘Control Acquisition.'” Plaintiffs' MSJ ¶ 5, at 3 (stating this fact). See Response to Plaintiff's MSJ at 2 (not disputing this fact). “Between June 2013 and October 2013, CEP-TIR LLC also [acquired] certain other outstanding shares of TIR.” Plaintiffs' MSJ ¶ 6, at 3 (stating this fact).[12] “As a result of these transactions, Defendants CEP-TIR, LLC, Stephenson, and Cynthia Field . . . became, collectively, the majority shareholders of TIR, owning at least 69.4% of the outstanding shares.” Plaintiffs' MSJ ¶ 7, at 3 (stating this fact). See Response to Plaintiffs' MSJ at 2 (not disputing this fact). CEP-TIR, LLC, Stephenson, and Field “thereby collectively gained control of TIR.” Plaintiffs' MSJ ¶ 8, at 4 (stating this fact). See Response to Plaintiffs' MSJ at 2 (not disputing this fact).

         “From June 2013 through December 23, 2013, the Plaintiff SFF-TIR, LLC was represented by legal counsel.” Defendants' Acquiescence MSJ ¶ 14, at 8 (stating this fact).[13]“From June 2013 through December 23, 2013, the Plaintiffs Stuart Family Foundation, Inc.; Alan Stuart 2012 GST Family Trust; Stuart 2005 GST Family Trust; and Celebration, LLC were represented by legal counsel.” Defendants' Acquiescence MSJ ¶ 15, at 8 (stating this fact).[14]“Each of the individual Plaintiffs executed and delivered a proxy to SFF-TIR, LLC to act on his or her behalf with respect to his or its TIR Inc. shares which proxies were in effect on November 2, 2013.” Defendants' Acquiescence MSJ ¶ 16, at 8 (stating this fact).[15] “[T]he Plaintiffs, led by Alan Stuart, attempted to negotiate a sale of their minority block of shares to Cypress for a substantially higher share price.” Defendants' Acquiescence MSJ ¶ 19, at 9 (stating this fact).[16]“Following the June 26, 2013 Control Acquisition, and after certain resignations, TIR's Board of Directors had three members as of October 31, 2013: Defendant Lawrence Field, Defendant Peter Boylan, and Randall Lorett, the President and CEO of TIR.” Plaintiffs' MSJ ¶ 10, at 4 (stating this fact).[17] “On September 20, 2013, Cypress Energy Partners Limited Partnership filed a Registration Statement (including the prospectus) for the public offering of partnership units of TIR shares, pursuant to the confidentiality provisions of the Jumpstart Our Business Startups Act.” Defendants' Acquiescence MSJ ¶ 20, at 9 (stating this fact). See Response to Defendants' Acquiescence MSJ ¶ 1, at 8 (not disputing this fact). “As of November 2, 2013, all plaintiffs had granted proxies to Plaintiff SFF-TIR to vote their TIR Inc. shares and agreed among themselves not to sell their TIR Inc. shares for less than $654, 632.” Defendants' Acquiescence MSJ ¶ 21, at 9 (stating this fact).[18] “On October 31, 2013, Cypress and TIR Inc. made a Tender Offer [Letter from Cypress Energy Partners to Shareholders of Tulsa Inspection Resources, Inc. (dated October 31, 2013), filed September 15, 2015 (Doc. 158-3)(Tender Offer)] to TIR Inc.'s remaining shareholders, including the Plaintiffs, for $451, 000.” Defendants' Acquiescence MSJ ¶ 22, at 9 (stating this fact). See Response to Defendants' Acquiescence MSJ ¶ 1, at 8 (not disputing this fact).

The Tender Offer disclosed (i) that the Registration Statement had been filed, (ii) that Cypress Energy intended to enter into an underwriting agreement for the public offering of master limited partnership units and that the equity of TIR Inc. might be dropped into the new publicly traded entity, and (iii) the purchase of shares (and share prices) by which the Defendants acquired TIR Inc. shares.

         Defendants' Acquiescence MSJ ¶ 23, at 9 (stating this fact)(relying on Videotaped Deposition of Anurag Agarwal (taken September 29, 2014), filed April 3, 2015(Doc. 83-20)(“Agarwal Depo. Ex. 1”).[19] In a section called “Certain Conflicts of Interest, ” the Tender Offer states:

“As a result of the June Acquisition, Mr. Boylan, and Mr. Field (who is affiliated with Mr. Stephenson and Ms. Field) may each be deemed to have a conflict of interest related to this Offer.” Id. [Tender Offer] at 2.
“As a result of the foregoing potential conflicts of interest, the TIR Board has not been asked to and is not making any recommendation to you regarding this Offer.” Id. [Tender Offer at 2]
“None of the Purchasers, nor any of their respective affiliates has performed or commissioned any appraisal, or engaged any independent financial advisor or other third party to perform any valuation analysis or provide any opinion respecting the value of the Shares in connection with this Offer.” Id. [Tender Offer at 2]

         Plaintiffs' MSJ ¶ 12, at 4 (stating this fact)(internal citation omitted). See Response to Plaintiffs' MSJ at 2 (not disputing this fact). The merger between TIR, Inc. and TIR, LLC “enabled the Controlling Shareholder Defendants to exchange their own TIR shares for equity in the new entity, Defendant TIR LLC, in proportion to their prior shareholders in TIR.” Plaintiffs' MSJ ¶ 15, at 4 (stating this fact). See Response to Plaintiffs' MSJ at 2 (not disputing this fact). “The Merger was approved and carried out by the following Defendants: [(i)] The Controlling Shareholder Defendants, i.e., Defendants CEP-TIR, LLC, Stephenson, and Cynthia Field; and [(ii)] TIR Directors Lawrence Field and Peter Boylan III . . . .” Plaintiffs' MSJ ¶ 16, at 4-5 (bullets and internal citations omitted)(stating this fact). See Response to Plaintiffs' MSJ at 2 (not disputing this fact). “TIR's Rule 30(b)(6) witness, Dan O'Keefe, admitted that because the Board composition had not changed, the same conflicts of interest that existed at the time of the Tender Offer also existed at the time of the Merger.” Plaintiffs' MSJ ¶ 18, at 5 (stating this fact). See Response to Plaintiffs' MSJ at 2 (not disputing this fact).

         “On November 13, 2013, Cypress Energy's SEC Registration Statement containing the prospectus for the sale of partnership units in the master limited partnership became public.” Defendants' Acquiescence MSJ ¶ 24, at 9 (stating this fact). See Response to Defendants' Acquiescence MSJ ¶ 1, 8 (not disputing this fact). “Shortly after November 13, 2013, the Plaintiffs analyzed or had analyzed by one or more of their representatives the Registration Statement.” Defendants' Acquiescence MSJ ¶ 25, at 9 (stating this fact).[20] “By November 26, 2013, the Plaintiffs had received and either personally reviewed the October 31 Tender Offer or had had the October 31 Tender Offer reviewed by legal counsel or SFF-TIR, LLC on their behalf.” Defendants' Acquiescence MSJ ¶ 26, at 9 (stating this fact).[21] “The Plaintiffs did not accept the October 31 Tender Offer.” Defendants' Acquiescence MSJ ¶ 27, at 9 (stating this fact). See Response to Defendants' Acquiescence MSJ ¶ 1, at 8 (not disputing this fact). “The Plaintiffs could not have tendered their shares in response to the Tender Offer no matter what the Offer said or did not say; the Plaintiffs had contractually agreed prior to the Tender Offer not to sell their TIR Inc. shares for less than $654, 632.” Defendants' Acquiescence MSJ ¶ 28, at 9 (stating this fact).[22] “By November 26, 2013, the Plaintiffs had received and either (i) personally reviewed or (ii) had had reviewed by legal counsel or SFF-TIR, LLC on their behalf the Cypress Energy Partners Limited Partnership registration Statement.” Defendants' Acquiescence MSJ ¶ 29, at 10 (stating this fact).[23]

The SEC Registration Statement included the following information respecting Cypress Energy Partners Limited Partnership and the Initial Public Offering: (a) Prospectus; (b) List of risks to its business; (c) Capitalization; (d) Cash distribution policy, projections and partnership agreement provisions relating to cash distributions; (e) Historical and projected financial data: (f) Management discussion and analysis of financial condition; (g) detailed descriptions of the industries in which Cypress Energy Partners was engaged, Cypress' business and Cypress' management; (h) Cypress Energy Partners' partnership agreement; (i) Underwriting information; (j) complete audited financial statements (as of September 30, 2013).

         Defendants' Acquiescence MSJ ¶ 30, at 10 (stating this fact)(relying on Austin Aff.) .[24] “As of November 2013, TIR had (a) revenues of $346.6 million, which was and [sic] 28 percent higher than TIR's budgeted figure; (b) pretax profits of $1.6 million; and (c) $9 million year to date, which were all were [sic] the ‘highest numbers [TIR] had had historically” as of that time. Plaintiffs MSJ ¶ 26, at 6 (last set of bracketed material in the original)(stating this fact)(citing O'Keefe Depo. at 297:16-299:13). See Response to Plaintiffs' MSJ at 2 (not disputing this fact). “TIR did not do a valuation [to inform] its merger consideration offer.” Plaintiffs' MSJ ¶ 27, at 6 (internal quotation marks omitted)(stating this fact).[25] “Defendants did not disclose to Plaintiffs TIR's internal October and November 2013 financial statements . . . showing record-breaking revenues or TIR's November 16, 2013 management projections . . . of even higher revenues through 2018.” Plaintiffs' MSJ ¶ 28, at 6 (internal citations omitted)(stating this fact). See Response to Plaintiffs' MSJ at 2 (not disputing this fact). “On November 26, 2013, the plaintiffs claimed each share of TIR Inc. was worth $650, 000.” Defendants' Acquiescence MSJ ¶ 32, at 10 (stating this fact).[26] “On November 29, 2013, Defendants advised that the Defendants could not negotiate any purchase during the tender offer period.” Defendants' Acquiescence MSJ ¶ 33, at 10 (stating this fact).[27]

         “The TIR Board unanimously approved the Merger in a consent dated December 9, 2013 signed by all three Directors.” Plaintiffs' MSJ ¶ 19, at 5 (stating this fact). See Response to Plaintiffs' MSJ at 2 (not disputing this fact). “CEP-TIR, LLC, Stephenson, and Cynthia Field, the majority shareholders in TIR, approved the Merger in a similar consent dated December 9, 2013 signed by all three of the majority shareholders.” Plaintiffs' MSJ ¶ 20, at 5 (stating this fact). See Response to Plaintiffs' MSJ at 2 (not disputing this fact). “Plaintiffs were all minority shareholders of TIR at the time of the Merger, owning the 32.882 outstanding shares that were canceled by the Merger.” Plaintiffs' MSJ ¶ 21, at 5 (stating this fact). See Response to Plaintiff's MSJ at 2 (not disputing this fact). “The Merger Agreement stated in its ‘Governing Law' provision . . . that ‘the provisions of this Agreement relating to mechanics or the effects of the Merger under Delaware law shall be governed by and construed and enforced in accordance with the laws of the State of Delaware.'” Plaintiffs' MSJ ¶ 22, at 5 (stating this fact)(quoting Merger Agreement at § 8.04).[28]

         “On December 9, 2013, Cypress and TIR exercised their statutory right to cash-out the Plaintiffs . . . .” Defendants' Acquiescence MSJ ¶ 34, at 10 (stating this fact)(relying on Notice to Former Shareholders of Tulsa Inspection Resources, Inc. of Shareholder Action and Appraisal Rights (dated December 11, 2013), filed April 3, 2015 (Doc. 83-27).[29] “On December 11, 2013, the Plaintiffs received timely after-the-fact notice of the Merger and their appraisal rights in accordance with the Oklahoma statutes.” Defendants' Acquiescence MSJ ¶ 37, at 11 (stating this fact). See Response to Defendants' Acquiescence MSJ ¶ 1, at 8 (not disputing this fact). “The Merger Agreement (dated December 9, 2013), filed April 3, 2015 (Doc. 83-27), provides that:

For the avoidance of doubt, any former shareholder who surrenders his, her or its share certificate (or acceptable evidence of share ownership for payment of Merger Consideration pursuant to Section 2.02 [payment provisions], shall be deemed to have (a) accepted the Merger Consideration and (b) forever waived any appraisal rights pursuant to this Section 2.03 [provisions respecting dissenting share], Section 1091 of the [Oklahoma General corporation Act], or otherwise.

         Defendants' Acquiescence MSJ ¶ 38, at 11 (citing Agarwal Depo. Ex. 7)(stating this fact). See Response to Defendants' Acquiescence MSJ ¶ 1, at 8 (not disputing this fact). “On December 18-20, 2013, each Plaintiff delivered his or its TIR Inc. share certificates to the Defendant CEP-TIR, along with stock powers, pursuant to the provisions of the Merger Agreement.” Defendants' Acquiescence MSJ ¶ 39, at 11 (stating this fact).[30] “On December 23, 2013, the Defendant TIR LLC paid . . . Plaintiffs . . . the $451, 000 per share Merger Consideration.” Defendants' Acquiescence MSJ ¶ 40, at 11 (stating this fact).[31] “As of December 9, 2013 (the date on which the Merger was consummated) and as of December 18-20, 2013 (the date on which the Plaintiffs surrendered their TIR Inc. shares . . .), the Plaintiffs knew the Defendants had acquired control of TIR Inc.” Defendants' Acquiescence MSJ ¶41, at 11 (stating this fact).[32] “As of December 9, 2013 (the date on which the Merger was consummated) and as of December 18-20, 2013 (the date on which the Plaintiffs surrendered their TIR Inc. shares . . .), the Plaintiffs knew the transactions by which the Defendants acquired controlling shares of TIR, Inc. and the prices paid for those shares.” Defendants' Acquiescence MSJ ¶ 42, at 11 (stating this fact).[33]

         “Defendants admit that they did not: [(i)] Form a special committee of disinterested directors or other disinterested persons to consider the proposed merger; [(ii)] Engage any independent financial advisor or other third party valuation analysis; or [(iii)] Require a majority-of-the-minority vote for the Merger to be approved.” Plaintiffs' MSJ ¶ 23, at 5-6 (bullets and internal citations omitted)(stating this fact). See Response to Plaintiffs' MSJ at 3 (not disputing this fact). “There is no other evidence that Defendants employed any of the above devices at the time of, and in connection with, the Merger.” Plaintiffs' MSJ ¶ 24, at 6 (stating this fact). See Response to Plaintiffs' MSJ at 3 (not disputing this fact).

As of December 9, 2013 (the date on which the Merger was consummated) and as of December 18-20, 2013 (the date on which the Plaintiffs surrendered their TIR Inc. shares . . .), the Plaintiffs knew the Defendants' conflicts of interest between their positions as officers, directors and shareholders of TIR Inc. and their positions as officers, directors, and equity owners of Cypress Energy and its Affiliates.

         Defendants' Acquiescence MSJ ¶ 43, at 11 (stating this fact)(relying on Allen Depo. at 108:3-112:3).[34]

As of December 9, 2013 (the date on which the Merger was consummated) and as of December 18-20, 2013 (the date on which the Plaintiffs surrendered their TIR Inc. shares . . .), the Plaintiffs knew the intentions of the Defendants respecting the organization of a master limited partnership, the exchange of shares of TIR Inc. for units of ownership in the master limited partnership, and an initial public offering of units of ownership in the master limited partnership.

         Defendants' Acquiescence MSJ ¶ 44, at 12 (stating this fact)(relying on Allen Depo. at 191:8-193:4).[35]

As of December 9, 2013 (the date on which the Merger was consummated) and as of December 18-20, 2013 (the date on which the Plaintiffs surrendered their TIR Inc. shares . . .), the Plaintiffs knew the Defendants had not performed or commissioned any appraisal, or engaged any independent financial advisor or other third party to perform any valuation analysis or provide any opinion respecting the value of the TIR, Inc. shares.

         Defendants' Acquiescence MSJ ¶ 45, at 12 (stating this fact)(relying on Allen Depo. at 99:5-104:24, Agarwal Depo. at 42:1-44:17, and Agarwal Depo. Ex. 1).[36]

As of December 9, 2013 (the date on which the Merger was consummated) and as of December 18-20, 2013 (the date on which the Plaintiffs surrendered their TIR Inc. shares . . .), the Plaintiffs knew the Defendants had not obtained the approval of a majority of the minority in effecting the Merger: the Plaintiffs were the remaining TIR Inc. minority shareholders. As a group, the Plaintiffs had demanded in September to sell their shares for a price in excess of $600, 000 per share, and in November had agreed amongst themselves not to accept the Tender Offer.

         Defendants' Acquiescence MSJ ¶ 46, at 12 (stating this fact).[37] “As of December 9, 2013 (the date on which the Merger was consummated) and as of December 18-20, 2013 (the date on which the Plaintiffs surrendered their TIR Inc. shares . . .), the Plaintiffs knew the Defendants had not formed a special committee to consider the proposed Merger.” Defendants' Acquiescence MSJ ¶ 47, at 12 (stating this fact)(relying on Allen Depo. at 272:3-273:17).[38]

As of December 9, 2013 (the date on which the Merger was consummated) and as of December 18-20, 2013 (the date on which the Plaintiffs surrendered their TIR Inc. shares . . .), the Plaintiffs had been provided the financial statements of TIR Inc. for 2011 and 2012, and for the nine month period ending September 30, 2013.

         Defendants' Acquiescence MSJ ¶ 48, at 12 (stating this fact)(relying on Allen Depo. at 83:18-84:1, 223:21-224:3).[39] “As of December 9, 2013 (the date on which the Merger was consummated) and as of December 18-20, 2013 (the date on which the Plaintiffs surrendered their TIR Inc. shares to obtain the Merger consideration), the Plaintiffs had received the Registration Statement.” Defendants' Acquiescence MSJ ¶ 49, at 12 (stating this fact)(relying on Allen Depo. at 194:2-11).[40]

As of December 9, 2013 (the date on which the Merger was consummated) and as of December 18-20, 2013 (the date on which the Plaintiffs surrendered their TIR Inc. shares . . .), the Plaintiffs believed that the Defendants did not believe (and had no reasonable basis to believe) that $451, 100 per TIR Inc. share represented a premium over the fair value of such shares.

         Defendants' Acquiescence MSJ ¶ 50, at 13 (stating this fact)(relying on Allen Depo. at 206:11-208:25).[41]

As of December 9, 2013 (the date on which the Merger was consummated) and as of December 18-20, 2013 (the dates on which the Plaintiffs surrendered their TIR Inc. shares . . .), Plaintiffs believed both Plaintiffs' financial presentations and Defendants' financial presentations showed the TIR Inc. shares were worth several multiples of $451, 000.

         Defendants' Acquiescence MSJ ¶ 51, at 13 (stating this fact)(relying on Complaint, filed July 3, 2014 (Doc. 1)).[42]

         On February 4, 2014, Plaintiff SFF-TIR, LLC by its Managing Member, Alan Stuart, sent a letter to the investors in Plaintiff SFF-TIR in the form and content of [Letter from Alan Stuart to SFF-TIR, LLC investors (dated February 12, 2014), filed April 3, 2015 (Doc. 83-31)(“Letter to SFF-TIR, LLC Investors”)], which stated, in part, as follows

“We are pleased to inform our investors in SFF-TIR, LLC (‘SFF[-]TIR') we were able to liquidate our equity position in Tulsa Inspection Resources, Inc. (‘TIR'). On December 23, 2013 we received cash consideration of $451, 000 per share for a total cash consideration of $5, 763, 780. The investment in TIR has generated 2.47x our original investment with a net annualized IRR of 40.42%.”

         Defendants' Acquiescence MSJ ¶ 53, at 13 (stating this fact)(quoting Letter to SFF-TIR, LLC Investors 1, filed April 3, 2015 (Doc. 83-32)).[43]

After . . . December 18-20, 2013, Defendants CEP-TIR, Charles Stephenson, and Cynthia Field, believing the Plaintiffs to have waived all claims to additional consideration for their shares, contributed 50.1% of the member interest in TIR LLC to Cypress Energy Partners Limited Partnership, and Cypress Energy Partners Limited Partnership effected a sale of partnership units to the public pursuant to the Registration Statement.

         Defendants' Acquiescence MSJ ¶ 54, at 13 (stating this fact)(relying on Austin Aff. ¶ 5, at 2-3). “On July 3, 2014, the Plaintiffs filed this action.” Defendants' Acquiescence MSJ ¶ 55, at 13 (stating this fact)(relying on Complaint). See Response to Defendants' Acquiescence MSJ ¶ 1, at 8 (not disputing this fact).

         PROCEDURAL BACKGROUND

         With this Memorandum and Opinion, the Court resolves and decides the Defendants' Motion for Reconsideration. In this section, the Court will summarize the Motion for Reconsideration, the Plaintiffs' response, and the Defendants' reply. The Court also recapitulates the parties' arguments during the motion hearing, during which the parties largely adhered to the points and arguments they raised in their briefings.

         1. Plaintiffs' Motion for Partial Summary Judgment on Breach of Fiduciary Duty Claims.

         The Plaintiffs filed Plaintiffs' Memorandum of Law in Support of Motion for Partial Summary Judgment on Breach of Fiduciary Duty Claims on September 14, 2015. See Plaintiffs' Memorandum of Law in Support of Motion for Partial Summary Judgment on Breach of Fiduciary Duty Claims, filed September 14, 2015 (Doc. 157)(“Plaintiffs' MSJ”). With this motion, the Plaintiffs seek partial summary judgment on two claims: (i) the Plaintiffs' First Claim for Relief against the Controlling Shareholder Defendants; and (ii) the Plaintiffs' Second Claim for Relief against the Director Defendants, for breach of fiduciary duty. See Plaintiffs' MSJ at 7.

         In relation to these claims, the Plaintiffs first petition the Court to grant partial summary judgment holding that the entire-fairness standard governs the merger, because the merger was a self-dealing transaction.[44] See Plaintiffs' MSJ at 9-10. The Plaintiffs insist that a showing of self-dealing suffices to require the Court to apply the entire-fairness doctrine, see Plaintiffs' MSJ at 11, and that the undisputed material evidence shows that the merger was self-dealing, as corporate fiduciaries stood on both sides of the transaction and -- the Plaintiffs assert -- did nothing to disable themselves from this conflict, see Plaintiffs' MSJ at 12-13. The need for the entire-fairness standard to apply is especially acute in this case, the Plaintiffs contend, because (i) the Defendants had a direct interest in making the “fair value” as low as possible as owners and directors of the surviving entity, Plaintiffs' MSJ at 13; and (ii) the Defendants made a determination to allocate different consideration to themselves and to the Plaintiffs when they obtained for themselves the benefit of TIR, Inc.'s rapidly increasing cash flow as qualified income for the profitable MLP[45] IPO they planned to conduct and to award themselves equity in that public entity while denying the same benefit to the Plaintiffs, see Plaintiffs' MSJ at 13-14.

         The Defendants also petition the Court to grant partial summary judgment holding that the Defendants bear the burden throughout the trial to prove the merger's entire fairness, because they used no procedural mechanisms to cure their conflict of interest. See Plaintiffs' MSJ at 9-10, 15. As the Plaintiffs read Delaware law, the Defendants may shift the burden of persuasion on the entire-fairness issue only by either (i) showing that a well-functioning committee of independent directors approved the transaction; or (ii) showing that a majority of the minority shareholders approved the merger transaction via an informed vote. See Plaintiffs' MSJ at 15. The Plaintiffs insist that the Defendants took neither of these curative measures. See Plaintiffs' MSJ at 15-17. Accordingly, the Plaintiffs seek for the Court to grant summary judgment that the Defendants bear the burden to prove entire fairness at trial. See Plaintiffs' MSJ at 17.

         Under the entire-fairness standard, the Plaintiffs argue, the undisputed material facts show that the Defendants breached their fiduciary duty of fair dealing. See Plaintiffs' MSJ at 17. The Plaintiffs allege that the Defendants intentionally structured the merger so that it was not negotiated with the Plaintiffs and never obtained the Plaintiffs' approval. See Plaintiffs' MSJ at 18. The Plaintiffs assert that the Defendants intended the merger transaction to eliminate the Plaintiffs as stockholders to prevent them from receiving any benefit from the planned Cypress Energy Partners, L.P. IPO and that the Defendants forced the Plaintiffs out at a price which greatly underestimated the true share value. See Plaintiffs' MSJ at 18-20. As the Plaintiffs see it, the Defendants' alleged failure to use any procedures to determine independently fair value, by itself, establishes their breach of duty, even if the Defendants believed that the price they offered is fair. See Plaintiffs' MSJ at 20-21. The Plaintiffs reject the proposition that the Defendants could have discharged their duties simply by following the statutory merger procedure and offering the Plaintiffs an appraisal. See Plaintiffs' MSJ at 21. The Defendant, therefore, reiterate their request that the Court grant partial summary judgment that: (i) the entire fairness standard governs the Plaintiffs' claims for breach of fiduciary duty; and (ii) the Defendants bear the burden of proving that the merger satisfies the entire fairness standard. See Plaintiffs' MSJ at 22. The Defendants further ask the Court to grant partial summary judgment holding that Defendants CEP-TIR, LLC, Stephenson, C. Field, L. Field, and Boylan are liable for breaches of the duty of entire fairness, reserving for trial the issue of damages. See Plaintiffs' MSJ at 22.

         2. The Defendants' Response to the Plaintiffs' MSJ.

         The Defendants filed the Defendants' Response in Opposition to Plaintiffs' Motion for Partial Summary Judgment on Breach of Fiduciary Duty Claims (Doc. 157) on October 5, 2015. See Defendants' Response in Opposition to Plaintiffs' Motion for Partial Summary Judgment on Breach of Fiduciary Duty Claims, filed October 5, 2015 (Doc. 170)(“Response to Plaintiffs MSJ”). The Defendants argue that the Court should deny the Plaintiffs' MSJ for four reasons: (i) the Plaintiffs, being fully informed, acquiesced in the merger and cannot now be heard to challenge it; (ii) the undisputed facts establish that the merger process was fair as a result of the statutory appraisal which was the Plaintiffs' exclusive remedy; (iii) Oklahoma common-law clean-hands doctrine and the Oklahoma common law of estoppel bar the Plaintiffs' breach-of-fiduciary-duty claims; and (iv) the Plaintiffs have waived their breach-of-fiduciary-duty claims contractually and by conduct under the Oklahoma common law of waiver. See Response to Plaintiffs' MSJ at 7.

         The Defendants insist, first, that the Plaintiffs, being fully informed, acquiesced in the merger and cannot now be heard to challenge it. See Response to Plaintiffs' MSJ at 7-9. Referring the Court to its discussion on this point in the Defendants' Acquiescence MSJ, the Defendants maintain that the only facts relevant to this proposition are the facts establishing the Plaintiffs' knowledge when they surrendered their share in exchange for the payment of the merger consideration pursuant to the merger agreement's terms. See Response to Plaintiffs' MSJ at 8. According to the Defendants, if the Plaintiffs had knowledge of the facts they allege in their Complaint on the date that the Plaintiffs surrendered their shares, the defense of acquiescence bars their claims. See Response to Plaintiff's MSJ at 8. The Defendants then contend that the Plaintiffs admit having had such knowledge at that time. See Response to Plaintiff's MSJ at 8.

         Revisiting a taxonomy that they had used in earlier briefings, the Defendants indicate that the Plaintiffs had only four choices regarding how to proceed when they confronted a merger which they opposed: (i) obtain payment of the merger consideration; (ii) have their shares appraised; (iii) seek a statutory appraisal of their shares, and sue for rescission and rescissionary damages; or (iv) file suit seeking rescission and rescissionary damages. See Response to Plaintiffs' MSJ at 8-9. The Defendants emphasize that the Plaintiffs did not have the option to obtain the merger consideration, and then file suit seeking rescission and rescissionary damages. See Response to Plaintiffs' MSJ at 9.

         Switching gears, the Defendants then assert that the undisputed facts establish that the merger process was fair, and that the alleged lack of an independent committee or appraisal does not “support a claim for a quasi-appraisal trial on the Merger price.” Response to Plaintiffs' MSJ at 9-10. The Defendants argue that the Plaintiffs fundamentally misconceive the entire fairness doctrine, which the Defendants say shifts the burden to a defendant to prove both fair process and fair price. See Response to Plaintiffs' MSJ at 10. By definition, the Defendants maintain, entire fairness cannot apply where the undisputed facts show that the merger process was fair. See Response to Plaintiffs' MSJ at 11. The Defendants insist yet again that it was fair under Oklahoma law, which expressly grants the majority the right to cash out a merger without the consent of, or even prior notice to, the minority shareholders. See Response to Plaintiffs' MSJ at 11. According to the Defendants, minority shareholders have a right under Oklahoma law to have a court appraise their shares but not to the formation of an independent committee. See Response to Plaintiffs' MSJ at 11.

         After walking the Court through a condensed chronology of the merger and the events leading to it, see Response to Plaintiffs' MSJ at 11-15, the Defendants turn their attention to the clean-hands doctrine, see Response to Plaintiffs' MSJ at 16. As the Defendants read the doctrine, Oklahoma common law requires that, to receive equity, a person must do equity. See Response to Plaintiffs' MSJ at 16 (citing Krumme v. Moody, 910 P.2d 993 (Okla. 1995)).[46] The Defendants insist that Stuart orchestrated the litigation after having (i) illicitly vied for TIR, Inc.'s control of in 2012 and 2013; (ii) directly solicited TIR, Inc.'s shareholders; (iii) attempted to hold the merger hostage with the end of extracting a higher price; and (iv) delivering his shares -- with braggadocio -- when he discovered that he lacked veto power over the merger. See Response to Plaintiffs' MSJ at 17. The Defendants urge the Court not to lend its aid to one who allegedly “has been guilty of such inequitable conduct.” Response to Plaintiffs' MSJ at 17.

         The Defendants then insist that the Oklahoma common law of estoppel also bars the Plaintiffs' breach-of-fiduciary-duty claims. See Response to Plaintiffs' MSJ at 17. As the Defendants read the law, equitable estoppel prevents a party from taking a legal position inconsistent with an earlier statement or action that places the counterparty at a disadvantage. See Response to Plaintiffs' MSJ at 17 (citing W. Keeton et al., Prosser and Keeton on the Law of Torts § 05, at 733 (5th ed. 1984)). Drawing on a 1956 case from the Supreme Court of Oklahoma, the Defendants explain that “[e]quitable estoppel holds a person to . . . a position assumed, where otherwise inequitable consequences would result to another, who, having a right to do so under the circumstances, has in good faith relied thereon.” Response to Plaintiffs' MSJ at 17-18 (quoting Apex Siding and Roofing Co. v. First Federal Savings and Loan Ass'n, 1956 OK 195, 195, 301 P.2d 352, 355)(internal quotation marks omitted)(ellipses in the Response to Plaintiffs' MSJ). According to the Defendants, the Plaintiffs are estopped to unwind the merger, because the Defendants, in reliance on the Plaintiffs' “voluntary and knowing surrender of their share certificates, ” (i) contributed 50.1% of their member interests in TIR, Inc. LLC to Cypress Energy Partners Limited Partnership; and (ii) effected a sale of partnership units to the public pursuant to the Registration Statement. Response to Plaintiffs' MSJ at 18.

         As the Defendants see it, the Plaintiffs also waived their breach-of-fiduciary-duty claims contractually and by conduct under the Oklahoma common law of waiver. See Response to Plaintiffs' MSJ at 18. Under Oklahoma law, the Defendants say, waiver is the “intentional relinquishment of a known right.” Response to Plaintiffs' MSJ at 18 (citing Barringer v. Baptist Healthcare of Okla., 2001 OK 29, 22 P.3d 695, 700). Dusting off a Supreme Court of Oklahoma case from nearly a century ago, the Defendants explicate that waiver “may be achieved contractually, provided that the contract is founded on a valuable consideration and made by the party whose benefit is being waived.” Response to Plaintiffs' MSJ at 18 (citing Smith v. Minneapolis Threshing Mach. Co., 1923 OK 84, 214 P.2d 178, 180). The Defendants then intone their earlier repeated assertion that, in December, 2013, the Plaintiffs delivered their share certificates to the Defendants “to induce the Defendants to pay the Merger consideration, ” and in accordance with a merger agreement that expressly provided that any former shareholder who surrendered share certificates would be deemed to have forever waived any appraisal rights “pursuant to the Oklahoma appraisal statute or otherwise.” Response to Plaintiffs' MSJ at 18. Extending their argument on this point, the Defendants insist that the Plaintiffs even waived their right to a quasi-appraisal under Oklahoma common law, as delivering the share certificates and accepting merger consideration for them constitutes an implied waiver in Oklahoma. See Response to Plaintiffs' MSJ at 19 (citing Barringer v. Baptist, 22 P.3d at 701).

         3. The Plaintiffs' Reply to the Plaintiffs' MSJ.

         The Plaintiffs filed the Plaintiffs' Reply Memorandum of Law in Further Support of Motion for Partial Summary Judgment on Breach of Fiduciary Duty Claims on October 19, 2015. See Plaintiffs' Reply Memorandum of Law in Further Support of Motion for Partial Summary Judgment on Breach of Fiduciary Duty Claims, filed October 19, 2015 (Doc. 177)(“Reply to Plaintiffs' MSJ”). The Plaintiffs first assert that the undisputed material facts establish that the Plaintiffs are entitled to judgment as a matter of law that the controlling shareholders and director defendants breached their fiduciary duty of fair dealing. Reply to Plaintiffs' MSJ at 3. According to the Plaintiffs, the Defendants could have created a level playing field designed to protect the Plaintiffs' interests as minority shareholders by (i) appointing an independent special committee; (ii) engaging an independent financial advisor or other third party to perform a valuation analysis; (iii) condition merger approval on a fully informed vote of the majority of minority shareholders; or (iv) providing an “opportunity for genuine negotiations regarding the merger.” Reply to Plaintiffs' MSJ at 3 (quoting In re Sunbelt Beverage Corp. S'Holder Litig., 2010 WL 26539, at *5 (Del. Ch. January 5, 2010)(Chandler, C.). The Plaintiffs assert that the Defendants undertook none of these protections and that “[l]iability inexorably follows, ” where the Defendants “approved a squeeze out merger, devoid of procedural protections, as a final means of forcing [the Plaintiffs] out of the company and obtaining [their] . . . stake . . . .” Reply to Plaintiffs' MSJ at 4-5 (bracketed material and first set of ellipses in the Reply to Plaintiffs' MSJ)(quoting Sunbelt, 2015 WL 5052214, at *5). According to the Plaintiffs, the Defendants admit that they did not go through the motions of establishing fair dealing and that there is no fact left warranting a trial on the issue, because the “Defendants cannot possibly prove the independence of measures they never took.” Reply to Plaintiffs' MSJ at 5 (emphatic italics removed).

         Turning to the fair price issue, the Plaintiffs insist that fair price is relevant only to the amount of damages which the Defendants must pay on account of their failure to deal fairly with the Plaintiffs. See Reply to Plaintiffs' MSJ at 6. For three reasons, the Plaintiffs insist, the fair price issue is not before the Court on the Plaintiffs' MSJ or on any other pending motion, and must abide trial. See Reply to Plaintiffs' MSJ at 6. First, the Plaintiffs note, neither the Plaintiffs nor the Defendants has moved for summary judgment on fair price, and fair value is “a quintessentially factual -- and sharply-disputed -- issue, which can only be resolved at trial by expert testimony.” Reply to Plaintiffs' MSJ at 6. Second, the Plaintiffs contend, the Defendants fail to address the underlying procedure used to adopt the merger. See Reply to Plaintiffs' MSJ at 6. Third, the Plaintiffs emphasize, fiduciaries employing grossly inadequate process can be found liable even if the transaction price might otherwise be considered fair. See Reply to Plaintiffs' MSJ at 6 (citing In re Nine Sys. Corp. S'Holders Litig., 2014 WL 4383127, at *47 (Del. Ch. Sept. 4, 2014)).

         The Plaintiffs then dismiss the Defendants' frequent invocation of the Plaintiffs' merger consideration acceptance, arguing that the acceptance is irrelevant to and does not meet the Defendants' burden to prove fair dealing. See Reply to Plaintiffs' MSJ at 7. According to the Plaintiffs, fair dealing required the Defendants to take prophylactic measures to remove the taint of their own conflict; post-merger conduct, e.g., share surrender when fully informed, is irrelevant to a showing of fair dealing. See Reply to Plaintiffs' MSJ at 7-8. Likewise, the Plaintiffs insist, the limited exception to entire fairness for short-form mergers that the Defendants invoke -- the availability of a statutory appraisal -- has no application to this conflicted long-form merger. See Reply to Plaintiffs' MSJ at 8. According to the Plaintiffs, statutory appraisal, unlike the entire-fairness doctrine, does not provide a complete remedy for unfair dealing. See Reply to Plaintiffs' MSJ at 8-9. Furthermore, the Plaintiffs insist, statutory appraisal applies only to short-form mergers, and the Defendants admit that the merger in this case was effected pursuant to 18 O.S. § 1090.2 -- the long-form merger statute. See Reply to Plaintiffs' MSJ at 9.

         In concluding, the Plaintiffs assert that the Defendants cannot escape their personal liability by mischaracterizing the Plaintiffs' fiduciary duty claims as claims for “quasi-appraisal.” Reply to Plaintiffs' MSJ at 10. Distinguishing quasi-appraisal from statutory appraisal, the Plaintiffs maintain that the former is a damages award at the conclusion of a trial in which a defendant's liability for breach of fiduciary duty has been established. See Reply to Plaintiffs' MSJ at 10 (citing In re Orchard Enters., Inc., 88 A.3d 1, 42, 47-48 (Del. Ch. 2014)). The Defendants' lexical legerdemain, the Plaintiffs assert, is “merely a variant of their failed arguments of acquiescence, estoppel, waiver and unclean hands.” Reply to Plaintiffs' MSJ at 10. Accordingly, the Plaintiffs repeat their petition from the Plaintiffs' MSJ that the Court grant partial summary judgment that: (i) the entire fairness standard governs the Plaintiffs' claims for breach of fiduciary duty; (ii) the Defendants bear the burden of proving that the merger satisfies the entire-fairness standard; and (iii) the Defendants CEP-TIR, LLC, Stephenson, C. Field., L. Field, and Boylan are liable for breaching their duty of entire fairness, reserving for trial the damages issue. See Reply to Plaintiffs' MSJ at 10.

         4. December 28, 2016 Hearing.

         The Court held a hearing on the Plaintiffs' MSJ on December 28, 2016. See Transcript of Motion Hearing Before the Honorable James O. Browning United States District Judge at 507:16-543:17, filed January 23, 2017 (Doc. 250)(“December Tr.”)(Court, DeMuro, Kagen). The parties argued the Plaintiffs' MSJ at the end of two days of hearings, and the Court previously had advised the parties that it had a hard deadline for closing the day's hearing so that it could make the return trip to Albuquerque for a separate case. Noting that the day's hard deadline was only an hour away, the Plaintiffs conveyed that they were hesitant to begin discussion on a motion that the parties might not have sufficient time to argue fully. See Tr. at 507:19-508:3 (Kagen). The Court then asked whether it could ask the Plaintiffs a few questions about the Plaintiffs' MSJ then instead of hearing a full-blown argument, and the Plaintiffs readily agreed. See Tr. at 508:4-8 (Court, Kagen).

         The Court first asked the Plaintiffs what the factual basis is for the Plaintiffs' MSJ. See Tr. at 508:10-12 (Court). The Plaintiffs responded that the Plaintiffs' MSJ is based entirely on undisputed facts, but they did not immediately accept the Court's invitation to describe what those facts are. See Tr. at 508:21-509:25 (Kagen). Instead, the Plaintiffs summarized for the Court the three orders that they were seeking to obtain in the Plaintiffs' MSJ. See Tr. at 509:1-510:5 (Kagen). First, the Plaintiffs said, they wanted an order that says that the entire-fairness standard governs the Plaintiffs' claims for breach of fiduciary duty -- a standard that the Plaintiffs asserted the Defendants have conceded applies. See Tr. at 509:1-9 (Kagen). Second, the Plaintiffs indicated, they want an order that the Defendants bear the burden of proof that the merger was entirely fair to the minority shareholders, i.e., that it was the product of both fair dealing and fair price. See Tr. at 509:10-15 (Kagen). Third, the Plaintiffs stated, they want an order that the Defendants are liable for breaching their duty of entire fairness, because the undisputed material facts shows that the Defendants have not and cannot meet their burden to show fair dealing. See Tr. at 509:22-510:2 (Kagen). According to the Plaintiffs, they seek to reserve for trial the issue of damages resulting from that breach of fiduciary duty. See Tr. at 510:2-5 (Kagen).

         The Defendants, seemingly returning full circle to their assertion early in the morning of the hearing's first day that they were bearing tidings of good news, see supra, told the Court:

I think I can simplify this because Mr. Kagen is correct. We've got an area of agreement, which is a great way to end the day for anybody in the courtroom. And that is, we agree that if Your Honor denies the acquiescence motion outright and says it's no longer an issue, or even if you submit that to the trial, which we think you should, the trial court at a minimum, that if we don't get dismissed on acquiescence, okay, and it's a trial issue, we agree that the entire fairness standard applies to the fiduciary duty claims.

         Tr. at 510:10-19 (DeMuro). To ensure that it correctly interpreted what the Defendants were saying, the Court probed the Defendants with a collection of short questions. See Tr. at 510:23-511:19 (Court, DeMuro). Because of the exchange's importance, the Court recites the exchange verbatim here:

THE COURT: But you would agree with his statement that the entire fairness standard governs Plaintiffs' claims for breach of fiduciary duty if the acquiescence motion is denied?
MR. DEMURO: Correct.
THE COURT: And would you also agree that the Defendants bear [the] burden of proving that the merger satisfies the entire fairness standard if the acquiescence motion for summary judgment is denied?
MR. DEMURO: As it pertains to the fiduciary duty claim, yes.

         Tr. at 510:23-511:8 (Court, DeMuro). Inquiring about the Defendants' assertion that they might still quibble what the jury instruction looks like regarding the entire fairness standard and from what specific case law the jury instruction would be pulled, the Court asked the Defendants whether their quibble would just be about the Defendants' liability under the entire-fairness standard. See Tr. at 511:9-10 (Court). The Defendants responded “that's the claim, yes.” Tr. at 511:11 (DeMuro). The Court then turned to the Plaintiffs and asked whether, in writing its opinion, it could subsume all the facts relevant to the Plaintiffs' MSJ into the factual sections combined from the Defendants' two summary judgment motions so that it might write one opinion to decide all the motions which the Court had heard over the previous two days. See Tr. at 511:18-513:7 (Court). The Defendants asserted that the Court could not glean sufficient facts about the merger's history from the Defendants' summary judgment motions to accomplish that feat; the Court, the Plaintiffs asserted, needs also to incorporate facts from Plaintiffs' MSJ. See Tr. at 512:8-516:24 (Kagen). As one example, the Plaintiffs said, if entire fairness rather than the business-judgment rule applies, then the burden to prove entire fairness shifts to the Defendants from the case's beginning to its end. See Tr. at 518:10-521:4 (Kagen)(citing In re Nine Systems, affirmed in Fuchs v. Wren Holdings, LLC, 129 A.3d 882 (Del. 2015).[47] As another example, the Plaintiffs continued, the facts in the Defendants' two summary judgment motions do not provide sufficient detail about the parties involved for the Court to see -- or in the Plaintiffs' opinion, to show -- how none of the individual Defendants was a disinterested actor in the merger transaction. See Tr. at 521:5-523:19 (Kagen).

         Veering a bit from the question at that point, the Plaintiffs began to delve into their legal arguments regarding the liability issue in Plaintiffs' MSJ. See Tr. at 523:20 (Kagen). The Plaintiffs asserted that, because the Defendants were not disinterested actors in the merger transaction, Delaware law required them to put into place protections to safeguard minority shareholders' rights at the time of the merger on December 9, 2013. See Tr. at 524:4-546:13 (Kagen)(citing In re Cornerstone Therapeutics Inc., Stockholder Litig., 115 A.3d 1173 (Del. 2015); In re Sunbelt Beverage Corp. S'holder Litig., 2010 WL 26539 (Del. Ch. Jan. 5, 2010)(Chandler, C.), as revised Feb. 15, 2010; Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983); Zutrau v. Jansing, 2014 WL 3772859 (Del. Ch. July 31, 2014)(Parsons, V.C.); and Rice[48]). The Plaintiffs maintained that the Defendants did not “have to follow a particular recipe” when it came to designing or implementing these protections, but that the Defendants needed to take some protections to avoid entire-fairness review. Tr. at 526:14-18 (Kagen). The Plaintiffs alleged, however, that the Defendants took no prophylactic actions to protect minority shareholders' rights at all. See Tr. at 526:18-24 (Kagen). On account of this lack of prophylactic action and what the Plaintiffs asserted is the Defendants' inability to demonstrate fair process, the Plaintiffs contended that Delaware law says that liability attaches to the Defendants. See Tr. at 527:10-528:23 (Kagen)(citing In re Trados Inc. S'holder Litig., 73 A.3d 17 (Del. Ch. 2013)(Laster, V.C.); Owen v. Cannon, 2015 WL 3819204 (Del. Ch. June 17, 2015)(Bouchard, C.); In re Celera Corp.; and Lampton Welding Supply Co. v. Stobaugh, 2012 WL 5398790 (N.D. Okla. Nov. 2, 2012)(Kern, J.))). After offering the Court their thoughts on how the opinion should be structured, the Plaintiffs then concluded their argument. See Tr. at 530:1 (Kagen). The Court then asked the Defendants the same question it had asked the Plaintiffs -- whether the Defendants objected to the Court's plan to pull the facts from the Plaintiffs' MSJ into one factual pool along with the facts from the Defendants' two summary judgment motions. See Tr. at 530:5-13 (Court). The Defendants responded that this approach is identical to the approach that they would take were they the Court. See Tr. at 530:14-533:2 (DeMuro).

         The Court then permitted the Defendants to present their argument on the liability issue that the Plaintiffs raise in the Plaintiffs' MSJ, asking first whether the Defendants could point to any case that disputes the Plaintiffs' assertion that the Defendants' failure to take prophylactic protections is a per se violation of entire fairness See Tr. at 533:8-13 (Court). The Defendants went even further, indicating that no case exists that supports the Plaintiffs' position. See Tr. at 533:14-25 (DeMuro). The Defendants insisted that having a burden-shifting rule in entire-fairness standard cases would be nonsensical if failure to take steps to protect the minority shareholders resulted in per se violation of the entire fairness standard. See Tr. at 534:18-535:24 (DeMuro).

         The Court asked the Defendants what they would emphasize as proof that their merger process was entirely fair if the burden only shifts rather than that there is a per se violation. See Tr. at 535:25-536:16 (Court). The Defendants adduced (i) the bidding process, by which, the Defendants said, they had established a premium value for the TIR, Inc. shares; (ii) the arm's-length share sales that the Defendants disclosed to shareholders; and (iii) the Plaintiffs' concession that they were fully informed of all the material facts regarding the merger. See Tr. at 536:19-537:25 (DeMuro). The Plaintiffs then quickly argued a reply to Plaintiffs' MSJ, noting that the Court only had twelve minutes left before it would be forced to stop argumentation for the day. See Tr. at 539:14-17 (Kagen). According to the Plaintiffs, their belief that the merger price was fair is insufficient to prevent liability from attaching if the merger transaction and cash-out were not procedurally fair. See Tr. at 539:18-540:24 (Kagen). The Plaintiffs maintained that this insufficiency is evident from In re Nine Systems, in that the minority shareholders in that case “got an amazing price” for their shares, but that the defendant company directors had not provided sufficiently fair process. Tr. at 540:25-541:6 (Kagen). The court in that case, the Plaintiffs contended, decided that the defendant directors still were liable, because of the lack of fair process, ultimately holding that there were no damages to award on account of the fair price but still awarding the plaintiffs millions of dollars in attorney fees. See Tr. at 541:7-13 (Kagen). The Plaintiffs then closed their argument by reiterating and summarizing some of their previous points. See Tr. at 541:22-543:2 (Kagen).

         Starting to draw the hearing to a close, the Court divulged to the parties:

I got to look at these cases, . . . but I'm inclined to agree what I have read so far with Mr. Kagen, that you got to point to something more than the bidding process and those sort of things, you got to have some reasonable substitute for probably the things that pass for procedural fairness. I'm not seeing them here.
So I think if I stick with the inclinations I've had on the two other motions, motions for summary judgment, it's going to lead me to probably grant the motion that the Plaintiff has here on breach of fiduciary duty, leaving us . . . really a valuation trial. So that's what I'm envisioning right at the present time as I head back to Albuquerque to work on this opinion.

Tr. at 543:4-17 (Court).

         5. Memorandum Order and Opinion.

         The Court published the Memorandum Opinion and Order which the Defendants move the Court to reconsider on April 25, 2017. See SFF-TIR, LLC v. Stephenson, 2017 WL 1487439, at *1 (D.N.M. April 25, 2017)(Browning, J.)(“MO”). The MO resolved six motions, turning therefore to an analysis of the Plaintiffs' MSJ on the MO's page 303. See MO at 303, 2017 WL 1487439, at *133. The Court granted the Plaintiffs' request for summary judgment, concluding that: (i) the entire fairness standard governs the Plaintiffs' claims for breach of fiduciary duty; (ii) the Defendants bear the burden of proof that the merger was entirely fair to the minority shareholders; and (iii) the Defendants are liable for breaching their duty of entire fairness, because the undisputed material facts show that the Defendants did not put into place sufficient safeguards protecting minority shareholder rights to meet this burden. See MO at 303, 2017 WL 1487439, at *133. The Court concluded, however, that the Plaintiffs' and the Defendants' competing valuation assumptions, models, projections, and experts do not allow the Court to calculate damages at the time the Court issued the MO. See MO at 303, 2017 WL 1487439, at *133. Accordingly, the Court left a determination of damages to be resolved at trial. See MO at 303, 2017 WL 1487439, at *133.

         As relates to its first conclusion about the entire fairness doctrine's applicability, the Court determined -- through reference to an earlier portion of the MO, see MO at 303, 2017 WL 1487439, at *133 -- that when the Court sits in a diversity case, Erie R. Co. v. Tompkins, 304 U.S. 64 (1938)(“Erie”) requires the Court to interpret state law as the state's highest court would interpret it. See MO at 277, 2017 WL 1487439, at *122 (citing 304 U.S. at 64). Beginning its analysis with Weinberger v. UOP, Inc., the Court noted that the defendants in that case made no attempt to structure the challenged merger transaction on an arm's-length basis. See MO at 277, 2017 WL 1487439, at *122 (citing 457 A.2d at 710). Consequently, the Court wrote, the Delaware Supreme Court had held that: (i) the “lack of structures or procedures that would keep the merger decision at arm's length violated the company's fiduciary duty to its minority shareholders”; (ii) such a violation had no safe harbor under Delaware law; and (iii) the Delaware Supreme Court was required to examine the contested merger under the entire fairness standard. See MO at 277-78, 2017 WL 1487439, at *122.

         The Court then assessed the Delaware Supreme Court's holding four years after Weinberger v. UOP, Inc. in Bershad. See MO at 278, 2017 WL 1487439, at *122. Contrasting the defendants in Weinberger v. UOP, Inc. with the defendants in Bershad, the Court indicated that the defendant company in Bershad took multiple steps to safeguard minority shareholders' rights during the merger process before they were cashed out. See MO at 278, 2017 WL 1487439, at *122 (citing Bershad, 535 A.2d passim). The Court recounted that at the same meeting in which the defendant board of directors in Bershad decided that a merger might be beneficial, it hired a nationally-recognized investment bank the proposed cash-out share offer price's fairness. See MO at 278, 2017 WL 1487439, at *122. After the investment bank had reported its independent opinion that the cash-out share offer price was fair, the Court continued, the defendant board of directors in Bershad scheduled a shareholder meeting at which a large majority of the company's minority shareholders approved of the merger. See MO at 278-79, 2017 WL 1487439, at *122 (citing Bershad, 535 A.2d at 843).

         The Court consequently determined that the Bershad court did not diverge from Weinberger v. UOP, Inc.'s rule that the entire fairness test should apply in cash-out mergers, instead holding that the entire fairness standard is necessary to “‘protect those rights of minority shareholders which have been tainted with unfairness.'” MO at 279, 2017 WL 1487439, at *122 (quoting Bershad. 535 A.2d at 848). The Court nevertheless identified a twist in Bershad, i.e., that in a merger case in which the defendant company put substantial structures in place to ensure that a controlling shareholder did not steamroll minority shareholders, the defendants “‘retain the burden of proving complete disclosure of all material facts relevant to the merger vote.'” MO at 279, 2017 WL 1487439, at *122 (quoting Bershad, 535 A.2d at 846). The Court read Bershad to shift the entire-fairness burden onto a case's plaintiffs, however, if a case's defendants prove complete disclosure of all material facts relevant to the merger vote. See MO at 279, 2017 WL 1487439, at *122 (citing Bershad, 535 A.2d at 846). Phrasing the same conclusion another way, the Court said that a case's plaintiff must -- under such circumstances --bear the burden of proving that the challenged merger was not entirely fair. See MO at 279, 2017 WL 1487439, at *122 (citing Bershad, 535 A.2d at 846).

         Analyzing twenty-eight subsequent cases from the Delaware Courts of Chancery, the Court concluded that three decades of Supreme Court of Delaware and Delaware Court of Chancery cases show that Bershad has withstood the test of time. See MO at 279-282, 2017 WL 1487439, at *122-23. The Court considered it telling, however, that the Supreme Court of Delaware also had not dismantled limits on Bershad that nineteen Delaware Courts of Chancery cases had placed on the Bershad opinion over a span of thirty years. See MO at 281-282, 2017 WL 1487439, at *123. The Court interpreted that silence as a textbook example of the dog that did not bark.[49] See MO at 282, 2017 WL 1487439, at *122 & n.101. The Court accordingly determined that both the Bershad frame and subsequent Delaware Court of Chancery decisions that filled in the jigsaw puzzle of Delaware cash-out merger law indicate that the Court needed to apply the entire-fairness standard when it assesses the merger that the Plaintiffs' contest in this case. See MO at 282, 2017 WL 1487439, at *123.

         The Court then concluded that under Delaware's entire-fairness standard, the burden of proving that the merger transaction was the product of both fair price and fair dealing defaults to the Defendants. See MO at 282, 2017 WL 1487439, at *124. The Court then listed two conditions under which the Court may shift the burden of evidence for proving entire fairness to a plaintiff: (i) the defendants set up a well-functioning committee of independent directors to examine and approve the merger; or (ii) a fully informed majority of the minority shareholders vote to approve the merger. See MO at 282, 2017 WL 1487439, at *124 (citing Kahn v. Lynch Communication Systems, Inc., 638 A.2d 1110 (Del. 2014); In re PNB Holding Co. Shareholder Litigation, 32 Del. J. Corp. L. 654 (2006)(Strine, J.); Clements v. Rogers, 790 A.2d 1222 (2001)(Strine, J.)) Noting that this case's Defendants satisfied neither criterion that the Court deemed necessary to shift the evidentiary burden, the Court concluded that the evidentiary burden for proving the merger's entire fairness remains with the Defendants. See MO at 283, 2017 WL 1487439, at *124.

         The Court then highlighted that the Defendants had agreed with the Plaintiffs at the December, 2016 motion hearing that, if the Court were to deny the Defendants' Acquiescence MSJ outright, that the entire-fairness standard applies to the Plaintiffs' fiduciary duty claims. See MO at 304, 2017 WL 1487439, at *134 (citing Transcript of Hearing Before the Honorable James O. Browning, United States District Judge, December 28, 2016, at 510:10-19 (DeMuro), U.S. 9, 20, 126 S.Ct. 1264, 164 L.Ed 2d 10 (2006). filed January 23. 2017 (Doc. 250)). The Court then reproduced the following short exchange from the December, 2016 hearing on this point, deeming that exchange to be important:

THE COURT: But you would agree with his statement that the entire fairness standard governs Plaintiffs' claims for breach of fiduciary duty if the acquiescence motion is denied?
MR. DEMURO: Correct.
THE COURT: And would you also agree that the Defendants bear [the] burden of proving that the merger satisfies the entire fairness standard if the acquiescence motion for summary judgment is denied?
MR. DEMURO: As it pertains to the fiduciary duty claim, yes.

         MO at 304, 2017 WL 1487439, at *134 (quoting Dec. Tr. at 510:23-511:8 (Court, DeMuro)). The Court then recounted that when it inquired about the Defendants' assertion that they might still quibble what the jury instruction looks like regarding the entire-fairness standard and from what specific case law the jury instruction would be pulled, the Court had asked the Defendants whether their quibble would just be about the Defendants' liability under the entire-fairness standard. See MO at 304, 2017 WL 1487439, at *134 (citing Dec. Tr. at 511:9-10 (Court)). The Court noted that the Defendants confirmed that this characterization was correct. See MO at 305, 2017 WL 1487439, at *134 (citing Dec. Tr. at 511:11 (DeMuro)). Seeing “no sound reason to manufacture a controversy or disagreement between the parties, ” see MO at 305, 2017 WL 1487439, at *134, the Court concluded that: (i) the entire-fairness standard applies to the Plaintiffs' fiduciary duty claims; and (ii) the Defendants bear the burden of proving that the merger satisfies the entire-fairness standard with respect to the Plaintiffs' fiduciary-duty claims, see MO at 305, 2017 WL 1487439, at *134.

         Applying the entire-fairness standard to the case's facts, the Court then determined that the Defendants are liable “for breaching their duty of entire fairness, because the undisputed material facts show that the Defendants did not put into place sufficient safeguards protecting minority shareholder rights.” MO at 305, 2017 WL 1487439, at *134 (capitalization omitted). The Court noted that a breach of fiduciary duty, under Delaware law, requires proof both that (i) a fiduciary duty existed; and (ii) the defendant breached that duty. See MO at 305, 2017 WL 1487439, at *134 (citing In re Mobilactive Media, LLC, 2013 WL 297950 (Del. Ch. January 25, 2013)(Parsons, V.C.); Palmer v. Reali, 211 F.Supp.3d 655, 665 (D. Del. September 29, 2016)(Robinson, J.)(applying Delaware law)). Describing these two elements in greater detail, the Court explained:

The entire fairness standard satisfies the first element by requiring a company to ensure that minority shareholders receive fair dealing and a fair price is the company cashes out their shares in a merger's wake. The Defendants can only avoid satisfying the second element in this case if they plausibly can show that they offered the Plaintiffs both fair dealing and fair price in the merger transaction. Under the entire fairness standard, the Defendants could show fair dealing under the following conditions: (i) the Defendants set up a well-functioning committee of independent directors to examine and approve the merger; or (ii) a fully-informed majority of the minority shareholders voted to approve the merger.

         MO at 305-06, 2017 WL 1487439, at *134 (citing Kahn v. Lynch Communication Systems, Inc., 638 A.2d 1110 (Del. 1994); In re PNB Holding Co. Shareholder Litigation, 32 Del. J. Corp. L. 654 (2006)(Strine, J.); Clements v. Rogers, 790 A.2d 1222 (2001)(Strine, J.)). The Court then concluded that the Defendants satisfied neither criterion needed to shift the evidentiary burden. See MO at 306, 2017 WL 1487439, at *135. The Court noted that the Defendants did not form a special committee to consider the merger or schedule and hold a minority shareholder vote on the merger. See MO at 306, 2017 WL 1487439, at *135. Accordingly, the Court granted the Plaintiffs' request for summary judgment on the Defendants' liability for breaching their “fiduciary duty of fair dealing with respect to the merger transaction.” MO at 307, 2017 WL 1487439, at *135.

         The Court was not ready, however, to grant the Plaintiffs' request for summary judgment on damages, indicating that the Plaintiffs' and Defendants' competing valuation assumptions, models, projections, and experts did not allow the Court to calculate damages at the time it issued the MO. See MO at 307, 2017 WL 1487439, at *135. The Court wrote that the Defendants failed to hire an investment bank to appraise TIR, Inc. shares' fair value at the time the merger was effected and that the Plaintiffs involuntarily cashed out their shares. See MO at 307, 2017 WL 1487439, at *135 (citing Dec. Tr. at 138:10-12 (DeMuro)). Complicating proper valuation further, the Court said, were TIR, Inc.'s rapid growth after the time of the board member bidding war and contestable assumptions and classifications built in the parties' competing discounted cash flow models:

Delaware requires the discounted cash flow model, because it looks at the company's future earning value in a systematic and methodical way, and then discounts that value to net present value, discounting the money's time value and capital's weighted average cost. In this case, however, the share valuation math is less clear cut than the share valuation law. The DCF model incorporates substantial amounts of math complete with a fraternity's worth of Greek letters to camouflage relatively straightforward computation. The final summation is at best only as precise, however, as its least precise input. Moreover, precision is not the same as accuracy. This lack of equivalence between precision and accuracy is especially probable when a model uses multiple inputs, the parameters, values, or weights of which incorporate an element of subjective choice.
The valuation issue in this case therefore presents an analytical challenge, because (i) each variable in the DCF model leaves an appraiser with a degree of discretion to choose rates or coefficients that he or she concludes best fits [sic] present data and future trends; and (ii) TIR's status as a pipeline inspection company within the oil and gas industry leaves some [question] as to the proper SIC code for appraisers to use when computing TIR's cost of capital.

MO at 308, 2017 WL 1487439, at *135-36 (citations omitted).

         6. Motion for Reconsideration.

         The Defendants filed their Motion for Reconsideration on May 9, 2017, requesting that the Court reconsider its (i) Order; and (ii) Memorandum Opinion and Order to the extent relevant to the Defendants' alleged breach of fiduciary duty. See Motion for Reconsideration at 1. According to the Defendants, the Court committed three errors of law in its Order and MO. See Motion for Reconsideration at 1. First, the Defendants assert, the Order and MO

“implicitly and erroneously assume the entire fairness doctrine is a liability-imposing device rather than a burden of proof shifting standard of review.” Motion for Reconsideration at 1. Second, the Defendants maintain, the Order and MO implicitly reject the settled law that the entire fairness doctrine is a unitary test based upon an analysis of both the fairness of the process and the fairness of the price, with: (i) fairness of price being the predominant consideration; and (ii) a finding of a “grossly unfair” process being a condition precedent to breach of fiduciary duty where the price is fair.

Motion for Reconsideration at 1 (emphases in original). Third, the Defendants contend, the Order and MO fail, on a motion for summary judgment, to: (i) “resolve all reasonable inferences and doubts in Defendants' favor; and (ii) construe all evidence in the light most favorable to Defendants.” Motion for Reconsideration at 1.

         In a quick preface, they maintain that they never have shied away from their burden to establish the merger's fairness under the entire fairness doctrine. See Motion for Reconsideration at 2. That asserted alacrity notwithstanding, the Defendants maintain that they do not accept the Court's conclusion that the Defendants have breached a fiduciary duty, because they did not (i) “buy” an independent appraisal; (ii) establish a fully functioning independent committee; or (iii) obtain a majority of a minority vote. Motion for Reconsideration at 2. The Defendants do not dispute that they failed to convene an independent committee immediately before the Merger, but insist that TIR, Inc. appointed an independent committee to represent TIR, Inc.'s and shareholders' interests in connection with the 2013 auction between Stuart and Cypress Energy Partners. See Motion for Reconsideration at 2 n.4. The Defendants also do not dispute that they failed to hold a vote of the minority shareholders immediately before the Merger, averring nonetheless that, “for all practical purposes, a majority of the minority did approve the cash-out merger” insofar as “a majority of all TIR shareholders (excluding Defendants) voluntarily sold their shares to Defendants at, or below, the premium $451, 000 cash-out merger price.” Motion for Reconsideration at 2 n.5.

         The Defendants then contend that they exercised their statutory right to effect a merger in which the Plaintiffs were cashed out by written consent and after-the-fact written notice to the Plaintiffs. See Motion for Reconsideration at 2. The Defendants report that Oklahoma law expressly grants their right to conduct a cash-out merger in such a way. See Motion for Reconsideration at 2-3. The Defendants reason that they especially had a right to exercise their statutory right where the Plaintiffs, being fully informed of all material facts: (i) had been offered the opportunity to participate in the Cypress Energy Partners IPO business plan; (ii) rejected the Cypress Energy Partners MLP IPO business plan; (iii) agreed to a winner-take-all auction and then reneged on their agreement; (iv) attempted and failed to take control of TIR, Inc.; (v) attempted to extract a premium for their TIR, Inc. shares, erroneously thinking they had the power to block the Cypress Energy Partners business plan; and (vi) were offered a premium tender price for their TIR, Inc. shares and rejected the offer. See Motion for Reconsideration at 3. The Defendants further reason that, having exercised what they characterize as their undeniable statutory right, they breached no duty to the Plaintiffs as long as the Plaintiffs received fair value for their shares. See Motion for Reconsideration at 3. According to the Defendants, no statute provides, and no case has ever held, that a defendant exercising its statutory right to conduct a merger, who has paid the plaintiff a fair price, has breached a duty to a plaintiff just by: (i) not “buying” an appraisal; (ii) not establishing an independent committee; and (iii) not obtaining a vote of a majority of the minority. See Motion for Reconsideration at 3-4. The Defendants contend that the Court is the first court so to decide and that this decision therefore constitutes an error which the Court should reconsider. See Motion for Reconsideration at 4. The Defendants assert that, in “a minute fraction of Delaware chancery proceedings applying the entire fairness standard, ” some chancellors have -- after conducting a full trial -- found a fair price but have nevertheless awarded attorney fees, costs, or other remedies when the defendants in those cases acted egregiously. Motion for Reconsideration at 4. The Defendants protest that no reading of this case's facts could lead the Court to conclude on a summary judgment motion that the Defendants completed the Merger in such a grossly unfair manner. See Motion for Reconsideration at 4-5.

         Moving to their second argument, the Defendants next aver that, even if the Court were to determine that the merger process was grossly unfair, such a determination would not entitle the Court to conclude that the Defendants failed to meet their burden of proving the merger's entire fairness. See Motion for Reconsideration at 5. According to the Defendants, the determination of entire fairness is “contextual and unitary.” Motion for Reconsideration at 5. In other words, the Defendants say, the Court may not conclude that the Defendants breached their fiduciary duty unless and until the fair price issue is determined as well. See Motion for Reconsideration at 5. Furthermore, the Defendants contend, they have proffered substantial evidence -- creating genuine disputes as to material facts -- that they erected sufficient safeguards to protect the Plaintiffs. See Motion for Reconsideration at 5.

         Circling back to their first argument, the Defendants reassert that entire fairness defines only the Defendants' burden of proof and not the legal duty that the Defendants owed to the Plaintiffs. See Motion for Reconsideration at 6. The Defendants contend that entire fairness is the burden of proof a defendant director or controlling shareholder must meet in an action challenging a merger in which the director or controlling shareholder stands on both sides of the transaction. See Motion for Reconsideration at 6 (citing Kahn v. Lynch Communications Systems, Inc., 638 A.2d 1110, 1115-17 (Del. 1994)). According to the Defendants, the entire-fairness doctrine holds a director and controlling shareholder ordinarily entitled to the business judgment rule's protection to a higher standard of proof when he or she stands on both sides of a transaction. See Motion for Reconsideration at 6. The Defendants insist, however, that the higher standard of proof does not make the director or controlling shareholder liable. See Motion for Reconsideration at 6 (citing Kahn v. Lynch Communications Systems, Inc., 638 A.2d at 1115-17). As the Defendants read Delaware case law, the Delaware courts have held that a defendant can avoid this shift of the burden of proof to the defendant if the defendant undertakes one or more procedural safeguards, including: (i) a fully functioning committee of independent directors; or (ii) a vote by the majority of the minority shareholders to approve the challenged merger. See Motion for Reconsideration at 6 (citing Kahn v. M&F Worldwide Corp., 88 A.3d 635, 644-45 (Del. 2014)).

         The Defendants concede that they did not use any of the established procedural safeguards that would enable them to avoid the shift of the burden of proof to them to prove the merger's entire fairness. See Motion for Reconsideration at 6. This concession notwithstanding, the Defendants emphasize that the entire-fairness standard is a burden of proof and not a burden of per se liability. See Motion for Reconsideration at 7 (citing Cinerama v. Technicolor, 663 A.2d 1156, 1162 (Del. 1995)). The Defendants assert that, under Delaware law:

Because the decision that the procedural presumption of the business judgment rule has been rebutted does not establish substantive liability under the entire fairness standard, such a ruling does not necessarily present an insurmountable obstacle for a board of directors to overcome. Thus, an initial judicial determination that a given breach of a board's fiduciary duties has rebutted the presumption of the business judgment rule does not preclude a subsequent judicial determination that the board action was entirely fair, and is, therefore, not outcome-determinative per se. To avoid substantive liability, notwithstanding the quantum of adverse evidence that has defeated the business judgment rule's protective procedural presumption, the board will have to demonstrate entire fairness by presenting evidence of the cumulative manner by which it otherwise discharged all of its fiduciary duties.

Motion for Reconsideration at 7 (quoting Cinerama v. Technicolor, 663 A.2d at 1163)(emphases in Cinerama v. Technicolor). The Defendants then reinforce this same position with citations to two subsequent Delaware Court of Chancery cases. See Motion for Reconsideration at 7 (citing Reis v. Hazelett Strip-Casting Corp., 28 A.3d 442, 465 (Del. Ch. 2011); In re Trados Inc. Shareholder Litigation, 73 A.3d 17, 79 (Del. Ch. 2013)). The Defendants assert, therefore, that, even if the Court assumes that the Defendants did not use sufficient safeguards, that assumption does not of itself establish that the Defendants breached a fiduciary duty; it only establishes that the Defendants bear the burden to show the merger was fair. See Motion for Reconsideration at 7-8. The Defendants therefore maintain that the Court erred when it concluded in its Order and Opinion that the Defendants breached a fiduciary duty by failing the entire fairness standard. See Motion for Reconsideration at 8.

         Circling back to their second argument, the Defendants then reasserted that the entire-fairness standard is a unitary test which precludes a finding of breach of fiduciary duty before a trial on fair price. See Motion for Reconsideration at 8. The Defendants contend that entire fairness requires a determination of both fair process and fair price, with fair price being the predominant factor. See Motion for Reconsideration at 8. The Defendants stress that there is no authority for the conclusion that a procedural device such as an appraisal, an independent committee of independent directors, or approval of a majority of the minority is the only way to establish entire fairness. See Motion for Reconsideration at 8. According to the Defendants, logic rejects such a conclusion, because it would convert the entire-fairness doctrine into a liability test rather than a standard of review. See Motion for Reconsideration at 8-9.

         The Defendants maintain that it is clear that fair process “embraces questions of when the transaction was timed, how it was initiated, structured, negotiated, disclosed to the directors, and how the approvals of the directors and the stockholders were obtained.” Motion for Reconsideration at 9 (quoting Weinberger, 457 A.2d at 711). As the Defendants understand it, these considerations extend far beyond the question whether directors employed one or more procedural devices to encompass the entire merger process. See Motion for Reconsideration at 9 (citing Kahn v. Lynch, 638 A.2d 1110, 1112-13 (Del. 1994)). Moreover, the Defendants contend, the Plaintiffs have acknowledged on the record that the specific procedural devices mentioned above are not the exclusive means to prove a fair process. See Motion for Reconsideration at 9 (citing Transcript of Motion Hearing December Tr. at 68:21-69:7 (Kagen)). The Defendants therefore conclude that the absence of these particular safeguards does not and cannot by itself justify a finding of unfair process -- much less a finding of a breach of fiduciary duty -- without consideration of fair price. See Motion for Reconsideration at 10.

         The Defendants then aver that fair price is the predominant factor in the entire-fairness analysis, so that a court cannot find a breach of fiduciary duty without first analyzing price. See Motion for Reconsideration at 20. Referring the Court to the Supreme Court of Delaware's decision in Gatz Properties, L.L.C. v. Auriga Capital Corp., 59 A.3d 1206 (Del. 2012), the Defendants assert that the test for entire fairness “is not a bifurcated one as between fair dealing and fair price. All aspects of the use must be examined as a whole, since the question is one of entire fairness. Thus, all aspects of the transaction must be considered before making an [sic]

unitary determination.” Motion for Reconsideration at 10 (quoting Gatz Properties, L.L.C. v. Auriga Capital Corp., 59 A.3d at 1214). Recapitulating their argument on this point as they framed it at the case's February motion hearing, the Defendants quote verbatim from the hearing transcript:

In the Trados decision, your Honor, the court held that the court cannot make a finding of breach of fiduciary duty solely on the basis of finding that there was an unfair process and that the analysis is unitary. Therefore, until the jury or the finder of fact has an opportunity to analyze the entire process, which means price and process, it would be error for this Court, in my view, based upon the Trados case . . . to find a breach of fiduciary duty until the trier of fact also considered whether there was a fair price.

Motion for Reconsideration at 10 (quoting Transcript of Hearing Before the Honorable James O. Browning, United States District Judge 554:2-11, filed February 26, 2017 (Doc. 255)(“February Tr.”)(DeMuro). Digging more deeply into In re Trados, the Defendants assert that, in that case, Vice Chancellor Noble addressed the situation where, after a trial, the process was deemed unfair but the merger price fair. See Motion for Reconsideration at 10. The Defendants maintain that the In re Trados court determined that the fair price satisfied that case's defendants' fiduciary duties, even though the merger process was unfair on account of a lack of sufficient safeguards. See Motion for Reconsideration at 10. Then invoking a separate decision by Vice Chancellor Noble, the Defendants contend that In re Nine Systems Corporation Shareholders Litigation, 2014 WL 4383127 (Del. Ch. April 11, 2014)(“In re Nine Systems”), confirms that the entire-fairness doctrine is a unitary test based on an analysis of process and price, with price fairness being the predominant consideration. See Motion for Reconsideration at 10. The Defendants recount that the In re Nine Systems decision came only after an eleven-day trial, and that Vice Chancellor Noble concluded that the defendants who breached their fiduciary duties were not liable for monetary damages even though he granted the plaintiffs leave to petition the court for an award of attorneys' fees and costs on the grounds that

[t]he entire fairness standard of review has long mandated a dual inquiry into ‘fair dealing and fair price' that this Court should weigh as appropriate to reach a ‘unitary' conclusion on the entire fairness of the transaction at issue. Delaware courts have contemplated this issue before. What united the resulting range of explications of this area of Delaware law is the principle that the entire fairness standard of review is principally contextual. That is, there is no bright-line rule on what is entirely fair.

Motion for Reconsideration at 12 (quoting In re Nine Systems, 2014 WL 4383127, at *1)(italicized emphasis in original, underlined emphasis added, and internal footnotes omitted). The Defendants assert that, taken together, Trados and In re Nine Systems stand for the proposition that, even though there may be an exception when the unfair process is grossly unfair, the entire-fairness standard is a unitary test. See Motion for Reconsideration at 12-13. The Defendants therefore ask the Court to reconsider pages 305-307 of its MO. See Motion for Reconsideration at 14.

         Circling at that point to their third proposition, the Defendants contend that they have adduced substantial evidence to establish that the merger process was fair. See Motion for Reconsideration at 14. The Defendants first remind the Court that, when deciding a summary judgment motion, it must: (i) resolve all reasonable inferences and doubts in the favor of the nonmovant party; (ii) construe all evidence in the light most favorable to the nonmovant party; and (iii) refrain from deciding credibility issues. See Motion for Reconsideration at 15. Reciting their version of the merger story, the Defendants assert that overwhelming evidence exists that TIR, Inc. had engaged in a “more than fair process” to determine the company's value before the cash out. Motion for Reconsideration at 16 (emphasis omitted). According to the Defendants, they offered the Plaintiffs an opportunity to participate in the merger and established an independent special committee to establish an auction process before the alleged bidding war between fully-informed rival camps of shareholders. See Motion for Reconsideration at 16-21. The Defendants maintain that these facts establish -- at least to the standard that summary judgment requires -- that the Defendants employed a more than adequate procedural substitute for an independent committee at the time of the merger. See Motion for Reconsideration at 21. The Defendants insist that a minority shareholder vote at the time of the merger would have been futile, because the Plaintiffs -- the only remaining minority shareholders -- had contractually bound themselves to accept no share price less than $654, 632.00. See Motion for Reconsideration at 22. The Defendants reason that, construing all facts in the light most favorable to the Defendants and resolving all inferences in the Defendants' favor, the Court cannot conclude as a matter of law that the process leading up to the Merger was unfair to the Plaintiffs. See Motion for Reconsideration at 22.

         7. Response to Motion for Reconsideration.

         The Plaintiffs filed Plaintiffs' Brief in Opposition to Defendants' Motion for Reconsideration on May 30, 2017. See Plaintiffs' Brief in Opposition to Defendants' Motion for Reconsideration, filed May 30, 2017 (Doc. 281)(“Response to Motion for Reconsideration”). The Plaintiffs insist that the Court should deny the Motion for Reconsideration. See Response to Motion for Reconsideration at 3. According to the Plaintiffs, the Court must restrict its review of a motion to reconsider an interlocutory order using three standards. See Response to Motion for Reconsideration at 3. First, the Plaintiffs assert, the Court must limit its review in proportion to how thoroughly the earlier ruling addressed the specific findings or conclusions that a motion to reconsider challenges. See Response to Motion for Reconsideration at 3. Second, the Plaintiffs contend, the Court must consider the case's overall progress and posture, the motion for reconsideration's timeliness relative to the ruling it challenges, and whether parties have significantly relied on the Court's ruling. See Response to Motion for Reconsideration at 3. Third, the Plaintiffs maintain, the Court must consider the holding of Servants of the Paraclete v. Does, 204 F.3d 1005 (10th Cir. 2000), which suggests that a court should grant motions for reconsideration only when the movant presents: (i) new controlling authority; (ii) new evidence; or (iii) a clear indication that the Court erred. See Response to Motion for Reconsideration at 3 (citing New Mexico v. Valley Meat Co., LLC, 2015 WL 9703255, at *19 (D.N.M. 2015)(Browning, J.)(citing Servants of the Paraclete v. Does, 204 F.3d at 1005)). According to the Plaintiffs, the Court should deny the Motion for Reconsideration under those standards. See Response to Motion for Reconsideration at 3.

         Scrutinizing the Motion for Reconsideration under the first standard, the Plaintiffs argue that the Court's MO thoroughly addresses the specific conclusions that the Defendants challenge. See Response to Motion for Reconsideration at 3. The Plaintiffs note that the Court's MO (i) makes thirty-nine pages of extensive factual findings that the record evidence supports; (ii) dedicates twenty-six pages to describing the arguments that the parties made in their respective briefs; (iii) spends eighty-seven pages recounting the arguments that the parties' counsel made at oral argument; (iv) extensively discusses case law governing the entire-fairness standard and minority shareholder rights in the context of a cash-out merger; and (v) explains its determination of liability in an orderly and logical process. See Response to Motion for Reconsideration at 3. Descrying a forest from these trees, the Plaintiffs opine that the Court thoroughly considered -- and rejected -- the Defendants' arguments on the issues it now moves the Court to reconsider. See Response to Motion for Reconsideration at 3-4.

         Examining the Motion for Reconsideration under the second standard, the Plaintiffs then contend that reopening the liability determination would cause delay and confusion. See Response to Motion for Reconsideration at 4. The Plaintiffs maintain that the decision whether to reconsider an earlier ruling is properly affected by the stage a proceeding has reached. See Response to Motion for Reconsideration at 4. Asserting that stability becomes increasingly important as the proceeding nears final disposition lest reopening issues cause further delay or confusion, the Plaintiffs remind the Court that they filed Plaintiffs' MSJ more than twenty months ago. See Response to Motion for Reconsideration at 4. The Plaintiffs aver that both the “parties and the Court have poured massive amounts of time, energy and money into getting the liability determination right the first time.” Response to Motion for Reconsideration at 4. According to the Plaintiffs, they have begun to prepare for trial in anticipation of the pending pretrial conference, and reopening the liability determination would significantly broaden the scope of issues to be tried. See Response to Motion for Reconsideration at 4. This broadening, the Plaintiffs maintain, in turn potentially would require the parties to revisit other pretrial motions that they argued and that the Court decided in conjunction with the liability determination, thereby further delaying what already has been a highly-protracted process. See Response to Motion for Reconsideration at 4. The Plaintiffs therefore conclude that the proceeding's late stage, the exhaustive opportunities which the Defendants have had to present their arguments, and the delay and confusion that would result were the liability determination reopened counsel against granting the Motion for Reconsideration. See Response to Motion for Reconsideration at 4.

         Evaluating the Motion for Reconsideration under the third standard, the Plaintiffs insist that none of the factors which Servants of the Paraclete v. Does requires are present. See Response to Motion for Reconsideration at 4. The Plaintiffs assert that the Defendants do not present any new law or facts to support their motion, bottoming their Motion for Reconsideration on what the Plaintiffs contend are specious arguments that the Court committed three errors of law. See Response to Motion for Reconsideration at 4. According to the Plaintiffs, each supposed error of law is chimerical. See Response to Motion for Reconsideration at 4.

         With regard to the Court's first supposed error of law -- that the “order and Opinion implicitly and erroneously assume the entire fairness doctrine is a liability-imposing device rather than a burden of proof shifting standard of review, ” Response to Motion for Reconsideration at 5 (quoting Motion for Reconsideration at 1)(emphasis added in the Response to Motion for Reconsideration), the Plaintiffs maintain that the Defendants misread the Court's MO. See Response to Motion for Reconsideration at 5. The Plaintiffs agree with the Defendants that the entire-fairness standard is a test that seeks to determine whether a director or controlling shareholder has complied with his or her fiduciary duties. See Response to Motion for Reconsideration at 5 (citing Reiss v. Hazelett Strip-Casting Corp., 28 A.3d 442, 465 (Del. Ch. 2011)). The Plaintiffs then say that finding that a transaction is not entirely fair subjects an interested party to liability for breach of his or her duty of loyalty. See Response to Motion for Reconsideration at 5 (citing In re Cornerstone Therapeutics Inc. Stockholder Litigation, 115 A.3d 1173, 1180-81 & n.30 (Del. 2015)). The Plaintiffs read the MO to conclude that Stephenson, Boylan, C. Field, and L. Field breached that duty, because the merger was not entirely fair to the Plaintiffs. See Response to Motion for Reconsideration at 5. According to the Plaintiffs, the MO's text makes it evident that the Court correctly applied the entire-fairness doctrine. See Response to Motion for Reconsideration at 5. The Plaintiffs insist that the MO correctly describes what must be proven to satisfy the entire fairness standard and who bears the burden of proof, stating:

Under Delaware's entire-fairness standard, the burden of proving that the merger transaction was the product of both fair price and fair dealing defaults to the Defendants. The Court may shift the burden of evidence for proving entire fairness to the plaintiff under the following conditions: (i) defendants set up a well-functioning committee of independent directors to examine and approve the merger; and (ii) a fully informed majority of the minority shareholders voted to approve the merger.

         Response to Motion for Reconsideration at 5 (quoting MO at 306, 2017 WL 1487439, at *124). The Plaintiffs assert that the Court does not implicitly assume that the Defendants' failure to implement these burden-shifting procedures established per se liability. See Response to Motion for Reconsideration at 5. Instead, the Plaintiffs maintain, the MO cites this failure as a factor evincing unfair dealing. See Response to Motion for Reconsideration at 5 (citing MO at 306, 2017 WL 1487439, at *124). The Plaintiffs report that the Delaware Court of Chancery has taken the same approach in similar circumstances. See Response to Motion for Reconsideration at 5-6 (citing Seagraves v. Urstact Property Co., Inc., 1996 WL 159626, at *5 (Del. Ch. April 1, 1996)

It is undisputed that the defendants did not institute any procedural safeguards designed to replicate arm's length bargaining or to assure that the interests of minority stockholders would be adequately protected. . . . [The] board's failure to implement any of these procedural safeguards is a factor evidenc[ing] the absence of fair dealing.

         The Plaintiffs also note that the MO observes that the Defendants did not give Plaintiffs advance notice of the merger, characterizing this observation as another factor evidencing the absence of fair dealing, because advance notice is a fundamental fair process which cannot be dispensed with. See Response to Motion for Reconsideration at 6 (citing MO at 306, 2017 WL 1487439, at *124; Cole v. Kershaw, 2000 WL 1206672, at *8 (Del. Ch. August 15, 2000); Ross Holding and Management Co. v. Advance Realty Group, LLC, 2014 WL 4374261, at *19 (Del. Ch. 2014)).

         The Plaintiffs assert that the liability determination also finds support in the MO's conclusions that: (i) the Defendants did not obtain a fairness opinion in connection with the Merger; and (ii) as a result, the Defendants were in the dark about a fair cash-out share price. See Response to Motion for Reconsideration at 6. Quoting at length from the MO, the Plaintiffs note that the Court said:

The Defendants did not hire an investment bank to conduct a discounted cash flow analysis at the time of the merger. Indeed, the Defendants did not contend that it [sic] hired an investment bank to calculate a fair price at the time of the merger at all. The Defendants asserted at the motion hearing that this was a fiduciary choice, as the Defendants did not wish to pay a substantial amount of money for an investment bank fairness opinion that (i) would duplicate the Halifax[] Group['s] December 2012 appraisal; and (ii) would solicit whatever valuation the Defendants[] want[ed] to hear.” Were this the case about the merger of a mature corporation with little change in its market capitalization over short periods of time, the Defendants' argument might withstand some scrutiny. As corporate financials demonstrate, however, revenues grew rapidly in the year after the December, 2012 appraisal, sprinting forward at an uneven pace month by month but generally running at a sixty percent year-on-year YTD growth. To borrow a management consulting term, TIR was a rare corporate “star.” TIR's choice not to commission an updated investment bank fairness opinion kept even the Defendants in the dark about a fair cash-out price even if the Court were to interpret the facts in the light most favorable to Defendants.

         Response to Motion for Reconsideration at 6-7 (quoting MO at 285-86, 2017 WL 1487439, at *124)(emphasis added, internal citations omitted). According to the Plaintiffs, failure to obtain a fairness opinion is a recognized factor that may evidence unfair dealing. See Response to Motion for Reconsideration at 7 (citing Cole v. Kershaw, 2000 WL 1206672, at *8). Likewise, the Plaintiffs continue, a director's failure to be adequately informed about the basis for the price paid in a transaction subject to entire-fairness review, is another factor that may evidence unfair dealing. See Response to Motion for Reconsideration at 7 (citing In re Nine Systems Corp. Shareholders Litigation, 2014 WL 4383127, at *36). Summarizing, the Plaintiffs assert that the MO's liability determination rests on conclusions that: (i) the Defendants did not set up a well-functioning committee of independent directors to examine and approve the Merger; (ii) a fully informed majority of the minority shareholders did not vote to approve the Merger; (iii) the Defendants did not give the Plaintiffs advance notice of the Merger; (iv) the Defendants did not commission a fairness opinion in connection with the Merger; and (v) Defendants were in the dark about a fair cash-out share price. See Response to Motion for Reconsideration at 7. The Plaintiffs maintain that, based on these conclusions, the MO concludes that the “‘Defendants did not put into place sufficient safeguards protecting minority shareholder right to meet'” their “‘burden of proof that the merger was entirely fair to the minority shareholders.'” Response to Motion for Reconsideration at 7 (quoting Opinion at 303). According to the Plaintiffs, this holding has ample support in case law imposing liability where the defendants failed to implement adequate safeguards to protect minority shareholders' interest. See Response to Motion for Reconsideration at 7-8 (citing In re Sunbelt Beverage Corp. Shareholder Litig., 2010 WL 26539, at *5 (Del. Ch. 2010)(Chandler, C.); Reis, 28 A.3d at 464; Oliver v. Boston Univ., 2006 WL 1064169, at *25 & n.38 (Del. Ch. 2006)(Noble, V.C.)).

         The Plaintiffs then argue that the Court may determine entire fairness without a trial on fair price. See Response to Motion for Reconsideration at 8. According to the Plaintiffs, it is well established that, once entire fairness applies, a defendant must establish “‘to the court's satisfaction that the transaction was the product of both fair dealing and fair price.'” Response to Motion for Reconsideration at 8 (quoting Cinerama, Inc. v. Technicolor, Inc., 663 A.2d 1156, 1163 (Del. 1995))(emphasis in original)(internal citation omitted in Response to Motion for Reconsideration). The Plaintiffs insist that Delaware courts “‘examine the transaction as a whole and both aspects of the test must be satisfied; a party does not meet the entire fairness standard simply by showing that the price fell within a reasonable range that would be considered fair.'” Response to Motion for Reconsideration at 8 (quoting William Penn Partnership v. Saliba, 13 A.3d 749, 756-57 (Del. 2011)). The Plaintiffs maintain that Delaware courts accordingly oftentimes conclude that fairly priced transactions are not entirely fair on account of the absence of fair dealing. See Response to Motion for Reconsideration at 8-9 (citing Oliver, 2006 WL 1064169, at *21-25 & n.238; Ross, 2014 WL 4374261, at *34; In re Nine Systems, 2014 WL 4383127, at *47; Dole Food, 2015 WL 505214, at *2 & 38).

         Furthermore, the Plaintiffs contend, fair price is not necessarily the preponderant consideration in an entire-fairness analysis. See Response to Motion for Reconsideration at 9. According to the Plaintiffs, the Supreme Court of Delaware clarified its decision in Weinberger v. UOP, Inc., 457 A.2d 701, 710-11 (Del. 1983), two years later in Rabkin v. Phillip A. Hunt Chem. Corp., 498 A.2d 1099 (Del. 1985), in which it explained:

“While this duty of fairness certainly incorporates the principle that a cash-out merger must be free of fraud or misrepresentation, Weinberger's mandate of fair dealing does not turn solely on issues of deception. We particularly noted broader concerns respecting the matter of procedural fairness. Thus, while ‘in a non-fraudulent transaction . . . price may be the preponderant consideration, ' it is not necessarily so.”

         Response to Motion for Reconsideration at 10 (quoting Rabkin v. Phillip A. Hunt Chem. Corp., 498 A.2d at 1104-05)(emphasis in Rabkin v. Phillip A. Hunt Chem. Corp.). The Plaintiffs then refer the Court to the Supreme Court of Delaware's opinion in International Telecharge, Inc. v. Bomarko, 766 A.2d 437 (Del. 2000), in which the Supreme Court of Delaware doubled down on Rabkin v. Phillip A. Hunt Chem. Corp., indicating: “‘When making a determination of a transaction's entire fairness[, ] courts examine the transaction as a whole[, ] looking at both fair price and fair dealing, without focusing on one component over another.'” Response to Motion for Reconsideration at 10 (quoting International Telecharge, Inc. v. Bomarko, 766 A.2d at 440).

         The Plaintiffs then note that the Defendants assert that a finding of grossly unfair process is the sole exception to a general rule that a court may not find a breach of fiduciary duty without first determining whether the price was fair. See Response to Motion for Reconsideration at 10. According to the Plaintiffs, the cases that the Defendants proffer in support of their position undermines it. See Response to Motion for Reconsideration at 10. In neither of the two cases, the Plaintiffs argue, did Vice Chancellor Noble assert that such gross unfairness is the only exception to the rule. See Response to Motion for Reconsideration at 10. The Plaintiffs insist that Vice Chancellor Noble rather held that gross fairness may be sufficient but is not necessary to such a liability finding. See Response to Motion for Reconsideration at 10-11. The Plaintiffs then propose that other Delaware courts' opinions echo Vice Chancellor Noble's position. See Response to Motion for Reconsideration at 11 (citing Oliver, 2006 WL 1064169, at *25; Ross, 2014 WL 4374261, at *33-34). As the Plaintiffs see it, in this case, as in Oliver, the Defendants have failed to prove fair dealing, because “‘they did not put into place sufficient safeguards protecting minority shareholder rights.'” Response to Motion for Reconsideration at 11 (quoting MO at 303, 2017 WL 1487439, at *133). Consequently, the Plaintiffs contend, the MO's liability determination fully comports with the normative and policy considerations animating similar decisions in the Delaware Court of Chancery. See Response to Motion for Reconsideration at 11-12.

         The Plaintiffs then aver that a liability determination may, notwithstanding the Defendants' protestations, be made on summary judgment. See Response to Motion for Reconsideration at 12. The Plaintiffs argue that the Defendants cite no authority to the contrary, and that courts repeatedly have made liability determinations on summary judgment based on a defendant's failure to demonstrate fair dealing. See Response to Motion for Reconsideration at 12 (citing Merritt v. Colonial Foods, Inc., 505 A.2d 757, 765 (Del. Ch. 1986)(Allen, C.); Pereira v. Cogan, 267 B.R. 500, 509 (Bankr. S.D.N.Y. 2001)(Sweet, J.)). Threading a needle, the Plaintiffs insist that, even though “a unitary analysis of both fair price and fair dealing must be undertaken, it is not necessary to decide, on summary judgment or even after trial, whether the fair price prong is satisfied, because a finding of liability may be based on an absence of fair dealing alone.” Response to Motion for Reconsideration at 12. In a footnote, the Plaintiffs then accuse the Defendants of misquoting the case on which they rely to argue to the contrary -- Gatz Properties, L.L.C. v. Aguriga Capital Corp. See Response to Motion for Reconsideration at 12 n.5. According to the Plaintiffs, the Defendants altered the Supreme Court of Delaware's opinion by “erroneously inserting into the quote the following non-grammatical sentence: ‘Thus, all aspects of the transaction must be considered before making an [sic] unitary determination.'” Response to Motion for Reconsideration at 12 n.5 (quoting Motion for Reconsideration at 10). The Plaintiffs insist that the “phrase ‘unitary determination' was authored by Defendants, not the Gatz court.” Response to Motion for Reconsideration at 12 n.5 (emphasis added in the Motion for Reconsideration).

         Turning their argument at that point to the summary judgment standards, the Plaintiffs take issue with the Defendants' argument that the MO and Order fail to (i) resolve all reasonable inferences and doubts in the Defendants' favor; and (ii) construe all evidence in the light most favorable to the Defendants. See Response to Motion for Reconsideration at 12. The Plaintiffs dismiss the argument as unsound, noting that the MO and Order both determine liability entirely on facts that neither party disputes, save a finding that the Defendants' failure to obtain a fairness opinion in connection with the merger left the Plaintiffs “‘in the dark about a fair cash-out share price.'” Response to Motion for Reconsideration at 12 (quoting MO at 286, 2017 WL 1487439, at *126). According to the Plaintiffs, the Court made this last conclusion only after interpreting the undisputed facts in the light most favorable to the Defendants. See Response to Motion for Reconsideration at 12. Furthermore, the Plaintiffs continue, the Defendants, in their Motion for Reconsideration, simply rehash the same arguments that they made or could have made when they responded to Plaintiffs' MSJ or during the hearing on the motion. See Response to Motion for Reconsideration at 13. The Plaintiffs urge the Court not to grant the Defendants a “mulligan on their failure to present persuasive argument and evidence” when they initially opposed the Plaintiffs' MSJ. Response to Motion for Reconsideration at 14 (quoting New Mexico v. Valley Meat Co., LLC, 2015 WL 9703255, at *20 (D.N.M. 2015)(Browning, J.)).

         As the Plaintiffs see it, the Defendants' contentions in the Motion for Reconsideration also are insufficient on their face to warrant reconsideration for two additional reasons. See Response to Motion for Reconsideration at 14. First, the Plaintiffs say, the Defendants' assertion that “‘in any reasonable business person's judgment' the history of sales of TIR shares at a price of $451, 000 per share was ‘a more than adequate substitute for an appraisal . . . [and] independent committee'” is irrelevant, because fair dealing is reviewed, not under the business-judgment rule, but rather under the more exacting entire-fairness rule. Response to Motion for Reconsideration at 14-15 (quoting Motion for Reconsideration at 21)(citing Kahn v. Tremont Corp., 694 A.2d 422, 428 (Del. 1997)).

         Second, the Plaintiffs argue, the speculative futility of a majority of the minority vote does not excuse the Defendants' unfair dealing. See Response to Motion for Reconsideration at 15. According to the Plaintiffs, what the Plaintiffs would have done if the Merger had been put to a vote of the minority shareholders is inherently unknowable, and the Delaware Court of Chancery ordinarily declines to engage in such speculation when reviewing a transaction for entire fairness. See Response to Motion for Reconsideration at 16 (citing Dole Food, 2015 WL 5052214, at *32; Int'l Discharge, 794 A.2d at 1181-82). The Plaintiffs further contend that the Defendants misconceive how a majority of the minority vote even functions, indicating that such a vote “‘only serves as a robust procedural protection when it is a non-waivable pre-condition to a transaction.'” Response to Motion for Reconsideration at 16 (quoting Frank v. Elgamal, 2012 WL 1096090, at *10 n.71 (Del. Ch. March 30, 2012)(Noble, V.C.)).

         Shifting gears, the Plaintiffs then argue that the Court should reaffirm its determination of the Defendants' liability if it decides to reconsider its Opinion. See Response to Motion for Reconsideration at 17. The Plaintiffs insist that, the Plaintiffs' theories notwithstanding, the history of sales of TIR, Inc. shares is not an appropriate substitute for an independent committee and appraisal. See Response to Motion for Reconsideration at 17. First, the Plaintiffs aver, the Defendants did not come to any well-informed judgment that the cash-out price they paid for TIR, Inc. shares was fair. See Response to Motion for Reconsideration at 17-21. Second, the Plaintiffs maintain, any reliance that the Defendants had on TIR, Inc. shares' prior sale prices when they pegged the cash-out price at $451, 000.00 per share is further evidence of the Defendants' unfair dealing, because (i) the Defendants had a duty to consider TIR, Inc.'s going concern value as of the merger date; (ii) the sales price that the Defendants derived from the June, 2013, control transaction was stale; (iii) TIR, Inc.'s shares were not actively traded in a liquid market; and (iv) the control transaction was not a reliable fair value discovery mechanism. See Response to Motion for Reconsideration at 21.

         Expanding on this first point, the Plaintiffs note that the Delaware definition of fair value entitles a shareholder to be paid for his or her proportionate interest in a going concern. See Response to Motion for Reconsideration at 22 (citing Merion Capital L.P. v. Lender Processing Services, Inc., 2016 WL 7324170, at *13 (Del. Ch. December 16, 2016)(Laster, V.C.)). The Plaintiffs insist that the Delaware courts eschew reducing going concern value to market price on any given date. See Response to Motion for Reconsideration at 22 (citing In re Appraisal of Dell, Inc., 2016 WL 3186538, at *23 (Del. Ch. 2016)(Laster, V.C.)). Reflecting this fact, the Plaintiffs reason, the Defendants had a duty to the minority shareholders to test the market price's reliability as a proxy for TIR, Inc. shares' fair value by estimating TIR, Inc.'s fundamental value as a going concern. See Response to Motion for Reconsideration at 22-23. According to the Plaintiffs, the Defendants' failure to validate the market price's reliability therefore is evidence of unfair dealing. See Response to Motion for Reconsideration at 23.

         Unpacking their second point, the Plaintiffs insist that the cash-out share price that the Defendants derived from the control transaction was stale. See Response to Motion for Reconsideration at 23. After referring to the Court to Sunbelt in support of the proposition that the Delaware courts often have concluded that reliance on outdated valuation data is evidence of unfair dealing, see Response to Motion for Reconsideration at 23 (citing Sunbelt, 2010 WL 26539, at *6-7), the Plaintiffs observe that TIR, Inc.'s rapid revenue growth between the time of the control transaction and the merger date makes it unlikely that the price negotiated in June, 2013, would be the same as the company's fair value six months later, see Response to Motion for Reconsideration at 23. As the Plaintiffs see it, the Defendants, at minimum, had a duty of fair dealing to conduct a more thorough valuation at the time of the merger to determine whether the $451, 000.00 per share price still reflected TIR, Inc.'s value. See Response to Motion for Reconsideration at 23-24.

         Expounding on their third point, the Plaintiffs then contended that TIR, Inc. shares' sale price during the control transaction were especially unreliable, because the shares were not actively traded in a liquid market. See Response to Motion for Reconsideration at 24. Indeed, the Plaintiffs assert, the Delaware Court of Chancery has held that “‘reliance on a price determined in a thinly traded, illiquid[] market is evidence of a price's unfairness.'” Response to Motion for Reconsideration at 24 (quoting Gesoff v. IIC Industries, Inc., 902 A.2d 1130, 1154 & n.134 (Del. Ch. 2006)(Lamb, V.C.)). Adopting the Gesoff v. IIC Industries, Inc. court's stance, the Plaintiffs maintain that the Defendants' similar reliance on inherently unfair prices determined in a thinly traded, illiquid market, over which the Defendants has significant influence, is further evidence of their unfair dealing. See Response to Motion for Reconsideration at 24.

         The Plaintiffs then conclude their Response to Motion for Reconsideration by adding a fourth point that they had not previously signposted, partially revisiting their earlier assertion that the control transaction was not a reliable fair value discovery mechanism for two reasons. See Response to Motion for Reconsideration at 24. First, the Plaintiffs posit, neither Cypress Energy Partners nor Stuart was permitted to make a topping bid, with the resulting structural ceiling on the control transaction price making it a poor talisman for fair value in a competitive bidding environment. See Response to Motion for Reconsideration at 24. Second, the Plaintiffs maintain, it is undisputed that the shareholders who sold to Cypress Energy Partners in the control transaction -- i.e., the pooled shareholders -- were not looking to maximize their shares' value. See Response to Motion for Reconsideration at 25. In analogous circumstance, the Plaintiffs argue, the Delaware Court of Chancery has held that fair value is not evident ...


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