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Fiduciary Duty Business Judgment Rule DE Supreme Court

Perkins Coie

When Is a Minority Stockholder a Controller? The Delaware Supreme Court Reaffirms the Ground Rules in In Re Oracle Derivative...

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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

Cadwalader, Wickersham & Taft LLP

Delaware Supreme Court Expands MFW Applicability in Conflicted Controller Transactions

On April 4, 2024, the Delaware Supreme Court issued a much-anticipated decision, In re Match Group Derivative Litigation (“In re Match Group”), extending the MFW doctrine more broadly to all conflicted controller...more

Mayer Brown

In re Match Group, Inc.: Delaware Supreme Court Clarifies Standard of Review for Controlling Stockholder Transactions

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In a recent decision, the Delaware Supreme Court clarified the proper standard to apply to a non-freeze-out merger transaction involving a controlling stockholder. Litigators who practice in the Delaware Court of Chancery are...more

Goodwin

Delaware Supreme Court Holds That Boards Must Satisfy the MFW Framework in Controller Transactions to Obtain Business Judgment...

Goodwin on

In 2014, the Delaware Supreme Court held in Kahn v. M&F Worldwide Corp. (“MFW”) that a court will apply the entire fairness standard of review to freeze-out merger transactions between a controlled corporation and its...more

Lowenstein Sandler LLP

Delaware’s New Universal Demand-Futility Test

Lowenstein Sandler LLP on

On Sept. 23, the Delaware Supreme Court endorsed a new universal three-part demand-futility test in United Food and Commercial Workers Union and Participating Food Industry Employers Tri-State Pension Fund v. Zuckerberg, et...more

Skadden, Arps, Slate, Meagher & Flom LLP

Insights: The Delaware Edition - December 2020

This issue covers important, developing areas of Delaware corporation law and deal litigation, including an increased focus on officer-related actions in merger litigation, the treatment of Caremark claims after Marchand and...more

Skadden, Arps, Slate, Meagher & Flom LLP

Recent MFW-Related Developments in Delaware Courts

In 2014, the Delaware Supreme Court’s landmark Kahn v. M&F Worldwide Corp.1 (MFW) decision established that the deferential business judgment standard of review could apply to controlling stockholder “squeeze-out” mergers...more

Skadden, Arps, Slate, Meagher & Flom LLP

A Brief Response Regarding Stakeholder Governance

The recently published “The Friedman Essay and the True Purpose of the Business Corporation” defends a view of stakeholder governance that reflects the following two basic flaws...more

Troutman Pepper Locke

Fraud on the Board: Material Conflicts Must Be Disclosed to the Board to Warrant Business Judgment Review

Troutman Pepper Locke on

A recent decision by the Delaware Supreme Court emphasizes the importance of fully disclosing material director and officer conflicts of interest in connection with proposed M&A transactions. Indeed, as the Court’s ruling...more

Stinson - Corporate & Securities Law Blog

Director’s Undisclosed Conflict Prevents Application of Business Judgment Rule in Acquisition

City of Fort Myers General § Employees’ Pension Fund v Haley, which was commenced in the Delaware Court of Chancery, grew out of the merger of equals between Towers Watson & Co. and Willis Group Holdings Public Limited...more

Sheppard Mullin Richter & Hampton LLP

COVID-19 Directors’ Duties of Oversight: Reporting and Monitoring

Boards of directors have a duty to exercise oversight and to monitor the company’s operational viability, legal compliance and financial performance during this COVID-19 pandemic. In Marchand v. Barnhill, the Delaware Supreme...more

Skadden, Arps, Slate, Meagher & Flom LLP

Key Developments in Delaware Corporation Law

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

Womble Bond Dickinson

Recent Director and Executive Compensation Lawsuits Heighten Need for Robust Corporate Governance

Womble Bond Dickinson on

Over the past two years, there has been an uptick in the number of lawsuits challenging director and executive compensation. Cases such asIn Re: Investors Bancorp, Stein v. Blankfein, Hertz v. Frissora and, most recently,...more

Orrick, Herrington & Sutcliffe LLP

What's New in Corporate Governance and Securities Law - October 18, 2019

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

Wilson Sonsini Goodrich & Rosati

Delaware Supreme Court Provides Guidance on Board Oversight Obligations

On June 18, 2019, the Delaware Supreme Court issued an opinion addressing the fiduciary obligation of directors and officers to exercise proper oversight over the corporation and to implement a system of controls to ensure...more

Wilson Sonsini Goodrich & Rosati

Delaware Court Provides Further Guidance on Stockholder Challenges to Director Compensation

On May 31, 2019, Vice Chancellor Sam Glasscock of the Delaware Court of Chancery issued a decision refusing to dismiss a stockholder's fiduciary duty claims challenging the compensation of Goldman Sachs' board of directors.1...more

Troutman Pepper Locke

Delaware Supreme Court Reemphasizes Importance of Deal Price in Reversing Aruba Appraisal Decision

Troutman Pepper Locke on

On April 16, 2019, the Delaware Supreme Court, in a per curiam decision in Verition Partners Master Fund Ltd. v. Aruba Networks, Inc., reversed the Court of Chancery’s determination that the fair value of Aruba’s stock for...more

A&O Shearman

Delaware Supreme Court Revives Stockholder Claims, Finding MFW Protections Were Not In Place Prior To Economic Negotiations

A&O Shearman on

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

Morris James LLP

Delaware Supreme Court Rejects MFW Defense Because of Delay in Safeguards

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Olenik v. Lodzinksi, No. 392, 2018 (Del. Apr. 5, 2019). Under Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014), deferential business judgment review governs mergers between a controlling stockholder and the controlled...more

Skadden, Arps, Slate, Meagher & Flom LLP

‘Partial and Elliptical Disclosures’ May Preclude Corwin Doctrine

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

Skadden, Arps, Slate, Meagher & Flom LLP

From the Get-Go: Interpreting MFW’s Ab Initio Requirement

The Delaware Supreme Court’s seminal decision in Kahn v. M&F Worldwide Corporation (MFW) offers a pathway for having challenges to controlling stockholder “squeeze-out” mergers reviewed under the highly deferential business...more

Cadwalader, Wickersham & Taft LLP

M&A Update: Delaware Supreme Court Clarifies the “Ab Initio” Requirement for Business Judgment Review of Controlling Stockholder...

In Flood v. Synutra Int’l Inc., the Delaware Supreme Court clarified its holding in Kahn v. M&F Worldwide Corp. (“MFW”). ...more

Sheppard Mullin Richter & Hampton LLP

Getting to Business Judgment in an Interested Transaction: Controlling Stockholder Must Put Procedural Protections in Place Prior...

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

Morris James LLP

Delaware Supreme Court Reverses Corwin Dismissal and Stresses Importance of Disclosures

Morris James LLP on

Morrison v. Berry, No. 445, 2017 (Del. July 9, 2018) - Corwin holds that approval of a transaction by a fully-informed, uncoerced majority of the disinterested stockholders invokes the deferential business judgment...more

A&O Shearman

Who’s the Boss? Minority Stockholders That Exercise Control

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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

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