The recent Delaware Supreme Court decision in Gantler v. Stephens has provided new guidance on a number of issues impacting companies engaging in transaction activity. As expanded below, the Gantler decision contains further insights on standards of review applicable to actions by a board, confirmation that fiduciary duties are owed by officers under Delaware law, and clarification of the scope of shareholder ratification. Specifically, the Delaware court ruled that:

*Absent conflicts of interest, the decision by a board of directors to terminate merger discussions and abandon a sale process is protected by the business judgment rule;

*The enhanced scrutiny standard under Unocal is applicable only where defensive actions are taken by a board beyond merely rejecting an acquisition proposal;

*Officers of Delaware corporations owe the same fiduciary duties of care and loyalty to shareholders as directors owe to shareholders; and

*Shareholder votes cannot serve to ratify a challenged decision of a board of directors where the shareholder vote was itself required by law to approve a particular action.

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