Voyager Pharmaceutical Corp. v. Bowen, April 15, 2008 (Jolly)(unpublished)
Voyager, a company engaged in pharmaceutical research directed at slowing or halting Alzheimer’s disease, was attempting a $100 million public offering in 2005. It alleged in its Complaint that it was unable to complete the IPO due to the actions of one of its directors, Bowen, and one of its employees, Atwood. It made a variety of claims, including claims for breach of fiduciary duty.
The allegations as to what Bowen had done are pretty interesting. Here’s how the Court characterized some of them:
While Voyager’s management was in the 4:30 p.m. conference with Hambrecht, Bowen was in a hospitality suite in the Marriott Marquis Hotel that had been set up to accommodate Voyager’s shareholders. (Compl. ¶ 66.) There, Bowen told one or more shareholders that the IPO was not going to proceed because "God had told him so," and because Voyager had refused to add "the glorification of God" to its mission statement. (Compl. ¶ 66.) Bowen also told the shareholders present that day that any further attempts to complete the IPO would fail until his demands were met, including giving credit to God in Voyager’s mission statement. (Compl. ¶ 66.) Bowen also asked one of the shareholders whether he would be willing to serve as a director of Voyager "when I regain control of the Company." (Compl ¶ 66.) Bowen also falsely told one or more shareholders that there was a problem with the Phase I data that had not been resolved and also falsely stated that when he raised this issue with management, management had locked him out of his office. (Compl. ¶ 68.)
The Court first confronted the issue of choice of law on Voyager’s claims for breach of fiduciary duty. The Court noted that there was little guidance in North Carolina as to the proper application of the internal affairs doctrine. It determined that it would apply the law of Delaware, the state of Voyager’s incorporation, to those claims.
It then rejected Bowen’s argument that his actions were protected by the business judgment rule. It held: