A Maryland court reinforced how careful deal process, documentation, and stockholder approval can shield directors from post-closing litigation.

Special Situations Fund III QP, L.P. v. TravelCenters of America Inc., 2025 WL 3280907 (Md. Ct. App. 2025)

When a public company agrees to be sold, its board still must navigate competing bids, deal protections, and stockholder scrutiny. In this Maryland case, TravelCenters’ board negotiated a cash sale to BP at $86 per share after a structured process with multiple potential buyers. A rival bidder, ARKO, later made an unsolicited higher proposal at $92 per share, but the independent directors concluded that ARKO’s bid was not a “superior proposal” under the merger agreement and recommended that stockholders approve the BP deal, which they did.

Stockholders later sued, alleging the directors breached their fiduciary duties and that the company’s landlord (SVC), its manager (RMR), and BP aided and abetted an unfair process by steering the company away from ARKO’s bid. The defendants moved to dismiss, pointing to Maryland’s statutory director-duty framework, the business judgment presumption, an exculpation clause in the charter that eliminated money-damage claims for duty-of-care violations, and the cleansing effect of a fully informed stockholder vote. The trial court granted the motion to dismiss, and the Appellate Court of Maryland affirmed, holding that the complaint did not plead facts sufficient to overcome the board’s statutory protections or to state an aiding-and-abetting claim against the third-party defendants.

For boards, controlling landlords, buyers, and stockholders, this decision underscores how critical the process is in sale-of-company situations.

Documenting why a competing offer is too risky can make the difference between business-judgment deference and protracted litigation.

For buyers, it’s a reminder that a higher headline price may not carry the day if the board can articulate credible concerns. For stockholders evaluating whether to sue over a rejected larger bid, the case illustrates how statutory protections, exculpation clauses, and a fully informed stockholder vote can significantly narrow the path to recovery.