After being bought and sold several times, U.S. video game maker Atari was acquired by Infogrames, a French publisher of video games. Infogrames later sold Atari shares in a secondary public offering, eventually reducing the parent's share to 51.6 percent, creating a complicated two-tier ownership and management structure that made it cumbersome to operate. Atari was generating losses and defaulting on its debt, and was faced with the possibility of liquidation without more working capital.

Atari's board of directors received an unsolicited offer from Infogrames to purchase all of the shares from minority shareholders. The offer and the company's cash shortage gave them very little time to pursue other options, but they were committed to responding in a way that adhered to principles of good corporate governance.