Litigation developments: core M&A and corporate governance doctrines
Compliance Perspectives: Due Diligence and Ultimate Beneficial Ownership (UBO)
Controlling stockholders owe fiduciary duties to other stockholders that minority stockholders do not. A holder of over 50% of a corporation’s voting power is clearly a controlling stockholder. As a consequence, transactions...more
On April 4, 2024, the Delaware Supreme Court held in In re Match Group Inc., Derivative Litigation that the entire fairness standard of review applies to all controlling stockholder transactions in which a controller receives...more
On January 17, 2024, the Delaware Supreme Court issued a significant decision affirming that the Delaware General Corporation Law (the DGCL) does not require companies with multiple classes of common stock to obtain separate...more
Below is our Corporate / M&A decisions update covering decisions in the third quarter of 2021. This update is designed to highlight selected important M&A, corporate, and commercial court decisions on a quarterly basis. The...more
On September 23, 2021—in United Food and Commercial Workers v. Zuckerberg—the Delaware Supreme Court endorsed a new universal three-part demand futility test. The decision will likely have far-reaching consequences, including...more
On September 20, 2021, the Delaware Supreme Court took the highly unusual step of overruling its prior decision in Gentile v. Rossette. An oft-criticized precedent from 2006, Gentile created an exception allowing minority...more
On September 20, 2021, the Delaware Supreme Court overruled its 2006 decision in Gentile v. Rossette, eliminating so-called "dual natured" simultaneous direct and derivative claims for breach of fiduciary duty. The decision...more
Earlier this week, the Delaware Supreme Court issued a significant decision reinforcing Delaware's strong policy favoring private ordering and giving effect to agreements among sophisticated stockholders. The decision...more
IN RE DELL TECHNOLOGIES INC. CLASS V STOCKHOLDERS LITIGATION There has been a growing deference in Delaware courts for transactions approved by independent special committees and minority stockholders. In the context of a...more
Consistent with trends in recent years, in 2019 Delaware corporation law largely was shaped by post-closing suits for money damages against directors who had approved mergers and acquisitions. Two Delaware Supreme Court...more
Corporate Governance and Securities Law Developments - Directors Can Be Held Liable for Failure to Oversee “Mission Critical” Regulatory Compliance - On October 1, the Delaware Court of Chancery refused to dismiss a...more
On April 5, 2019, the Delaware Supreme Court reversed in part and affirmed in part a decision of the Delaware Court of Chancery that had dismissed a stockholder challenge to an all-stock business combination between...more
Under Corwin v. KKR Financial Holdings LLC1 and its progeny, “when disinterested, fully informed, uncoerced stockholders approve a transaction absent a looming conflicted controller,” the irrebuttable business judgment rule...more
In Flood v. Synutra Int’l, Inc., No. 101, 2018, 2018 Del. LEXIS 460 (Del. Oct. 9, 2018), the Delaware Supreme Court (Strine, C.J.) held that a controlling stockholder who pursues a merger with the controlled company will have...more
In two recent cases, the Delaware Court of Chancery provided informative guidance on when stockholders that hold less than 50% of a corporation’s stock are nevertheless considered to be controlling stockholders. This inquiry...more
The Delaware Supreme Court found in In re Investors Bancorp Stockholders Litigation that director equity grants based on director discretion are subject to an entire fairness standard of review. ...more
On October 12, 2017, the Supreme Court of Delaware affirmed a decision by the Delaware Court of Chancery to dismiss breach of fiduciary duty claims against the directors of Clear Channel Outdoor Holdings, Inc. (“CCOH”) in...more
Delaware law provides important tools for directors to maintain control of derivative lawsuits.1 One such tool is the “demand requirement” embodied in Court of Chancery Rule 23.1, which requires that before a stockholder acts...more
The Delaware Supreme Court recently issued an important decision on the subject of director independence. In Sandys v. Pincus, No. 157, 2016 (Del. Dec. 5, 2016), the Delaware Supreme Court held that certain directors of...more
This issue focuses on important, developing areas of Delaware corporation law and deal litigation, including the Court of Chancery’s clarification of its evolving views about disclosure-based deal litigation settlements;...more
New York’s highest court earlier this month adopted a more lenient standard for reviewing certain types of corporate transactions between companies and controlling shareholders, similar to that adopted two years ago by...more
In re Kenneth Cole Productions, Inc. Shareholder Litigation - We previously reported on the Delaware Supreme Court’s landmark decision in Kahn v. M&F Worldwide Corp. (MFW) applying the deferential, defendant-friendly...more
We are pleased to share with you the inaugural issue of Insights: The Delaware Edition, a periodic publication addressing significant Delaware deal litigation and corporation law developments. In This Issue: - Q&A...more
In an October 2, 2015 decision, Corwin, et al. v. KKR Financial Holdings LLC., et al., the Delaware Supreme Court clarified that once a merger closes, as long as it has been approved by a fully informed vote of the...more
Prohibition on Fee-Shifting Provisions - The legislation signed into law last week responds to the Delaware Supreme Court’s decision in ATP Tour, Inc. v. Deutscher Tennis Bund, 91 A.3d 554 (Del. 2014) in which the Court...more