Controlling Stockholders

News & Analysis as of

Stockholder Merger Vote Sets High Bar for Post-Closing Claims

The Delaware Supreme Court's decision in Corwin v. KKR Financial Holdings , 125 A.3d 304 (Del. 2015), reaffirmed the power of fully-informed, uncoerced, disinterested stockholder approval to immunize M&A transactions against...more

Court Of Chancery Applies Corwin Doctrine To Dismiss Non-Exculpated Duty of Care Claims

Under the Corwin doctrine, approval by a majority of the fully-informed, uncoerced, disinterested stockholders invokes the business judgment rule so long as the transaction does not involve a controlling stockholder...more

"Key Developments in Delaware Corporation Law in 2016"

Significant changes in Delaware merger litigation and settlement practice in 2016, as well as noteworthy case law developments and trends, will continue to affect merger parties and litigants in 2017 and beyond....more

Delaying a Bankruptcy for Shareholder Benefit May Benefit the Creditors After All

Equity holders and sponsors be wary - a new arrow may now be available in the quiver of potential causes of action that creditors and trustees can use to maximize their recovery in chapter 11 bankruptcy cases. In a recent...more

"Hong Kong Regulatory Update - December 2016"

This Hong Kong regulatory update provides a brief overview of the principal Hong Kong regulatory developments in the preceding three months relevant to companies listed or proposed to be listed on The Stock Exchange of Hong...more

Supreme Court Chips Away at Concept of Direct And Derivative Claims

Just in time for Christmas, on December 20, 2016, the Delaware Supreme Court issued a Christmas present – or lump of coal, depending on your view – in its opinion in El Paso Pipeline GP Company LLC v. Brinckerhoff. In this...more

"Delaware Supreme Court Rules on Director Independence"

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

Some Pitfalls of Negotiating Your Own Buyout in a Business Divorce

More and more shareholder dispute litigations are settling earlier than ever before, which is obviously a good thing for anyone who does not want to pay a fortune in legal fees (i.e., everyone). The reason is simple – in all...more

CLIENT ALERT: Delaware Supreme Court Relaxes Inquiry into Director Independence in Demand Futility Context

Sandys v. Pincus, No. 157, 2016 (Del. Dec. 5, 2016). In this en banc majority opinion, the Delaware Supreme Court signaled that, at least in the context of a demand futility analysis involving a corporation with a...more

Roadmap for Merger Decision-Making Process in Delaware

In a string of recent cases, the Delaware courts have given public companies a roadmap for structuring the decision-making process in merger transactions. Before delving into the recent decisions, it may help to understand...more

Claims That Controlling Stockholder Received Unique Benefits Dismissed

In GAMCO Asset Management v. iHeartMedia, Delaware's Court of Chancery considered claims that a controlling stockholder's liquidity needs created conflicts in otherwise arm's-length transactions with third parties. As...more

Financial Services Weekly News - November 2016 #4

Editor's Note - Potential CFPB Reform in the Wake of the Election. The November 16 edition of the Roundup indicated that the Financial CHOICE Act (Act) may be a blueprint for legal changes affecting the financial...more

ISS Updates 2017 Voting Policies, Including Adoption of Policy to Recommend Against NCG Committee Members of Companies that...

On November 21, 2016, Institutional Shareholder Services (ISS) released final changes to its voting policies for 2017. One of ISS’s changes is the adoption of a new policy to recommend against the election of Nominating &...more

"Recent Opinions Highlight Different Appraisal Valuation Methods Employed in Merger Transactions by Delaware Courts"

There is a general perception that statutory appraisal challenges have been on the rise over the past several years. The Delaware Court of Chancery has issued a number of opinions during that time that use the merger price...more

"Two Court of Chancery Deal Litigation Decisions Provide Helpful Guidance"

Chelsea Therapeutics: Post-Closing Bad Faith Claim a ‘Rare Bird’ in Delaware Absent Allegations of Self-Interestedness or Lack of Independence - In In re Chelsea Therapeutics International LTD Stockholders Litigation,...more

Business Litigation Reporter - November 2016

On June 12, 2016, the European Commission adopted a new framework for personal data transfers between the European Union (EU) and the United States (US), called the “Privacy Shield.” US companies doing business in Europe may...more

Challenge to a Squeeze-Out Merger Dismissed Under MFW Framework

In a stockholder challenge to a going-private merger by a controlling stockholder to buy out minority stockholders, the operative standard of review is ordinarily the most rigorous judicial review, entire fairness. To obtain...more

"Activist Investing in Europe: A Special Report (September 2016)"

This report offers an overview of the state of activism in Europe, as well as country-specific profiles for the United Kingdom, France, Germany, Italy and Switzerland, including information and commentary on noteworthy...more

Delaware Court of Chancery Dismisses Litigation Arising from Controller Buyout of Books-A-Million Under "MFW" Framework

On October 10, 2016, the Delaware Court of Chancery issued its decision in In re Books-A-Million, Inc. Stockholders Litigation. The decision, authored by Vice Chancellor J. Travis Laster, is important because it applies the...more

Emerging Trends Newsletter - Q3

We are thrilled to bring you the third installment of Stinson Leonard Street's Emerging Trends newsletter. We are proud of the depth and breadth of experience and knowledge across our firm's 13 offices nationwide and are...more

Key Takeaways: Use of Stichtings as an M&A Defence Measure; Contrasting English and Delaware Law

Skadden and Erskine Chambers recently hosted a series of comparative corporate law events in conjunction with the University of Pennsylvania Law School; Queen Mary University of London School of Law; New York University...more

Baker v Sadiq C.A. No. 9464-VCL (Del. Ch. Aug. 16, 2016) (Laster, V.C.)

In this letter opinion, the Court of Chancery awarded $650,000 in attorney’s fees to counsel for the minority stockholders of NavSeeker, Inc. (“NavSeeker”), resolving a dispute regarding how a fee award should be determined...more

Taming the Bull Rider: Chancery Court Reining in Mootness Fee Awards in Merger Litigation

Last month, the Delaware Chancery Court drastically reduced – from $275,000 to $50,000 – a mootness fee award requested by plaintiffs’ counsel in a lawsuit challenging the merger between PayPal and Xoom Corporation, finding...more

Delaware Court of Chancery Addresses the “Cleansing Effect” of Stockholder Approval In Post-Closing M&A Damages Actions

In two recent decisions, City of Miami General Employees’ & Sanitation Employees’ Retirement Trust v. Comstock, C.A. No. 9980-CB, 2016 Del. Ch. LEXIS 133 (Del. Ch. Aug. 24, 2016) (Bouchard, C.) (“Comstock”), and Larkin v....more

The Delaware Plaintiff’s Bar Mines a New Vein of Liability: Limits on Director Compensation

Compensation committees composed of independent outside directors were created as the check-and-balance guardians against management compensation engorgement. But as the Roman philosopher Cicero famously posed, “Who guards...more

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