Business Judgment Rule

News & Analysis as of

Mergers & Acquisitions Alert: Controlling Stockholder Squeeze-Outs May Be Structured to Achieve Deferential “Business Judgment...

In Kahn v. M&F Worldwide Corp. (Del. Mar. 14, 2014), the Delaware Supreme Court recently decided that a going private transaction sponsored by the controlling stockholder of a Delaware corporation may, under certain...more

Delaware Supreme Court Tells Controlling Shareholders “If You Look Out For Your Minority, We’ll Look Out For You”

On March 14, 2014, the Delaware Supreme Court unanimously affirmed an important Delaware Court of Chancery decision issued in 2013 that offered a roadmap to companies and their directors on how to obtain the protections of...more

Update: Landmark Decision By Delaware's High Court Affirms Deferential Business Judgment Review For Controlling Stockholder...

Last summer, in our post titled Protecting Your Business Judgment: Recent Developments in Delaware Law on M&A Deals Involving Controlling Stockholders, we alerted you that two trial courts in the nation’s leading forum for...more

Securities Update - March 2014

In December 2013, the Staff of the Securities and Exchange Commission’s Division of Corporation Finance issued to Congress its “Report on Review of Disclosure Requirements in Regulation S-K” (the S-K Study) that originally...more

Kahn v. MF Worldwide Corp. The Delaware Supreme Court Affirms In re MFW Holding That a Going-Private Transaction May Gain the...

On March 14, 2014, the Delaware Supreme Court decided Kahn v. MF Worldwide Corp. and unanimously affirmed the Chancery Court’s ruling in In re MFW. As we discussed previously, in In re MFW, then-Chancellor (now Chief Justice)...more

Delaware Supreme Court Affirms Criteria for Applying the Business Judgment Rule to Controlling Stockholder Going-Private...

In Kahn, et al. v. M & F Worldwide Corp., et al., 2014 WL 996270 (Del. Mar. 14, 2014), the Delaware Supreme Court unanimously affirmed that, when certain procedural safeguards are implemented at the outset of negotiations, a...more

M&F Worldwide: Delaware Supreme Court Upholds Business Judgment Review In Controlling Stockholder Transaction

When a controlling stockholder’s buyout of a company has been challenged by minority stockholders, Delaware courts have generally subjected the transaction to entire fairness review, the most rigorous standard of review in...more

The Impact of Kahn v. M&F Worldwide Corp.: Delaware Supreme Court Affirms That Business Judgment Review Applies to Properly...

In Kahn v. M&F Worldwide Corp., the Delaware Supreme Court unanimously affirmed the Court of Chancery’s decision that the more deferential business judgment rule standard of review, rather than an entire fairness standard of...more

Delaware Supreme Court Upholds Chancery Court Ruling that Applied Business Judgment Rule to Going Private Transaction with...

In Kahn v. M&F Worldwide Corp., the Delaware Supreme Court unanimously upheld the Chancery Court’s decision in In re MFW Shareholders Litigation. In that decision, the Chancery Court had granted summary judgment in favor of...more

The More Things Change? Delaware Supreme Court Applies Business Judgment Standard of Review in Going-Private Transaction

Kahn v. M&F Worldwide Corp. - On March 14, 2014, the Delaware Supreme Court issued its decision in the widely followed case Kahn v. M&F Worldwide Corp. (“M&F Worldwide”), providing a blueprint for a controlling...more

Kahn v. M&F Worldwide Corp., C.A. No. 6566 (Del. Mar. 14, 2014)

In this en banc decision, the Delaware Supreme Court affirmed the Court of Chancery’s decision to grant summary judgment to the defendants and addressed an issue of first impression: what standard of review will apply where a...more

Delaware Supreme Court Deals Blow to Merger Litigation Plaintiffs

On Friday, the Delaware Supreme Court adopted the business judgment rule standard of review for some controlling stockholder freeze-out mergers and potentially other interested party transactions. In Kahn, et al. v. M&F...more

M&A Update: Delaware Court’s Orchard Enterprises Decision Provides Key Insights For Special Committees In Controlling Stockholder...

On March 14, 2014, the Delaware Supreme Court upheld the Court of Chancery’s 2013 decision in In re MFW Shareholders Litigation, holding that in going-private mergers where there is a controlling stockholder, the use of both...more

Delaware Upholds Business Judgment Review for Controlling Stockholder Mergers If Minority Is Protected

On Friday, March 14th, the Delaware Supreme Court held that controlling stockholder mergers should be subject to deferential business judgment review, rather than the more stringent entire fairness standard, where minority...more

In re MFW Decision Upheld by Delaware Supreme Court

Last week in Kahn v. M&F Worldwide Corp. (Del. March 14, 2014), the Delaware Supreme Court upheld the decision of the Court of Chancery in the In re MFW Shareholders Litigation (Del. Ch. May 29, 2013) case and also upheld the...more

Delaware Supreme Court Affirms Application of Business Judgment Review to Merger with Controlling Stockholder

In Kahn v. M&F Worldwide Corp, the Delaware Supreme Court unanimously affirmed the Court of Chancery's 2013 decision that a going-private merger with a controlling stockholder may be subject to the deferential business...more

M&A Update: Delaware Supreme Court Upholds Business Judgment Rule Review For Certain Controlling Stockholder Transactions With...

On March 14, 2014, the Delaware Supreme Court upheld the Court of Chancery’s 2013 decision in In re MFW Shareholders Litigation, holding that in going-private mergers where there is a controlling stockholder, the use of both...more

Delaware Supreme Court Confirms That Appropriate Procedural Safeguards Will Result In Business Judgment Review Of Going-Private...

In a 2013 decision, the Delaware Court of Chancery ruled that the business judgment standard of review should apply to a going-private transaction where certain procedural safeguards were implemented to protect minority...more

Financial Services Law - Jan 30, 2014

Swipe Fee Settlement Yields More Litigation - Although the parties reached a $7.25 billion class action settlement of the antitrust suit brought by merchants against Visa and MasterCard over swipe fees, the case is far...more

Top 5 Delaware Case Developments in 2013 for M&A Practitioners

During 2013, in addition to the important changes to the Delaware General Corporation Law (“DGCL”) and the Limited Liability Company Act, described here, the Delaware courts issued a number of decisions that have a direct...more

Two Certified Issues to the Georgia Supreme Court Will Address Application of the Business Judgment Rule to Bank Officers and...

In an unexpected turn of events, two recent cases arising out of the U.S. District Court for the Northern District of Georgia have resulted in two sets of certified questions to the Georgia Supreme Court that will likely have...more

The Business Judgment Rule

Canadian Courts, like their American counterparts, have developed a rule of deference to business decisions called the “business judgment rule”, whereby courts will defer to the directors’ business judgment as long as an...more

Eleventh Circuit Certifies Questions On Georgia Business Judgment Rule In Bank Officer Case, Declines To Apply “No Duty” Rule To...

On December 23, the U.S. Court of Appeals for the 11th Circuit certified questions to the Georgia Supreme Court regarding whether bank directors and officers can be subject to claims for ordinary negligence under the state...more

Can Your Director Bank On The Business Judgment Rule?

Ever had one of those days where you think you’re acting with good faith, diligence, and care, and yet you still get sued by the FDIC? The directors and officers of the now defunct Buckhead Community Bank in Georgia find...more

Federal Court Allows FDIC D&O Suit Involving Business Judgment Rule To Proceed

On November 14, the U.S. District Court for the Southern District of West Virginia denied motions to dismiss filed by former officers and directors of a failed federal thrift who allegedly contributed to the bank’s collapse...more

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