Recent Delaware Chancery Court Rulings

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There have been several recent Delaware Chancery Court decisions of importance to corporate directors. The most recent decision, In Re Cox Radio, Inc. Shareholders Litigation (May 6, 2010), involved a going-private transaction. In this case, the court confirmed that tender offers by controlling stockholders are subject to review under the usual business judgment rule rather than the stricter "entire fairness" standard. In another recent decision in Binks v. DSL.net, Inc. (April 29, 2010), the Delaware Chancery Court ruled that the so-called Revlon standard of seeking the highest value reasonably available to stockholders applied to a company's issuance of convertible debt where conversion of the debt would result in a change of control of the company.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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