Because of Delaware’s preeminence as a state for incorporating businesses, Delaware is home to a large amount of corporate litigation. It is perhaps because of the familiarity of the Delaware judiciary with corporate matters that the Delaware courts have taken judicial notice of a number of facts relating to corporations.
As certificates of incorporation are obtainable by resort to the office of the Secretary of State,36 a Delaware court may take judicial notice of the contents of certificates of incorporation of Delaware corporations.37 Courts have taken judicial notice of the trading price of stock, 37.1 that the true value of stock may be worth more or less than its par value,38 and that the market value of stock often has little relation to the value of the corporation’s assets.39 They have also noticed that under the most favorable circumstances many stockholders will not take the trouble to vote their stock,40 and many of those who do vote fail to date their proxy.41
Courts have taken judicial notice of the fact that stock certificates endorsed in blank are not infrequently held for some time without presentation to the corporation for registration of transfer.42 It is also common knowledge subject to judicial notice that stockbrokers frequently hold blocks of stock in “street” name for the beneficial owners,43 and that corporations often have more than one class of stock.44
Courts further take notice of the fact that a purchaser of a majority of all of the outstanding stock of the corporation frequently pays a premium price, i.e., a price above the market value.45
36. See 8 Del. C. § 101(a).
37. McPadden v. Sidhu, 964 A.2d 1262, 1273 n.28 (Del. Ch. 2008); In re Baxter International, Inc. Shareholders Litigation, 654 A.2d 1268, 1270 (Del. Ch. 1995); In re Wheelabrator Technologies, Inc. Shareholders Litigation, Cons. C.A. No. 11495, slip op. at 21-22, Jacobs, V.C. (Del. Ch. Sept. 1, 1992).
37.1. Weiss v. Samsonite Corp., 741 A.2d 366, 375 n.26 (Del. Ch.), aff’d mem., 746 A.2d 277 (Del. 1999).
38. Bodell v. General Gas & Electric Corp., 132 A. 442, 445 (Del. Ch. 1926), aff’d, 140 A. 264 (Del. 1927).
39. Delaware Racing Asso. v. McMahon, 320 A.2d 758, 762 (Del. Super. 1974), rev’d and remanded on other grounds, 340 A.2d 837 (Del. 1975).
40. Investment Associates, Inc. v. Standard Power & Light Corp., 48 A.2d 501, 507 (Del. Ch. 1946), aff’d, 51 A.2d 572 (Del. 1947).
41. Investment Associates, Inc. v. Standard Power & Light Corp., 48 A.2d 501, 513 (Del. Ch. 1946), aff’d, 51 A.2d 572 (Del. 1947).
42. In re Metropolitan Royalty Corp., 62 A.2d 857, 859 (Del. Super. 1948).
43. Colonial Realty Corp. v. Reynolds Metals Co., 185 A.2d 754, 758 (Del. Ch. 1962), aff’d, 190 A.2d 752 (Del. 1963).
44. Western Pacific Industries, Inc. v. Liggett & Myers, Inc., 310 A.2d 669, 671 (Del. Ch. 1973).
45. Adams v. R. C. Williams & Co., 158 A.2d 797, 799 (Del. Ch. 1960); Sporborg v. City Specialty Stores, Inc., 123 A.2d 121, 124 (Del. Ch. 1956).
© 2010 David L. Finger