Litigation developments: core M&A and corporate governance doctrines
Compliance Perspectives: Due Diligence and Ultimate Beneficial Ownership (UBO)
On June 21, 2024, Vice Chancellor Nathan A. Cook of the Delaware Court of Chancery granted a motion to dismiss a putative stockholder class action asserting breach of fiduciary duty claims against the officers and directors...more
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
In a landmark decision, In re Sears Hometown & Outlet Stores, Inc. Stockholder Litigation,1 the Delaware Court of Chancery held that a controlling stockholder did not breach his fiduciary duties when he amended company bylaws...more
On May 1, 2023, Vice Chancellor Morgan T. Zurn of the Delaware Court of Chancery denied a motion to dismiss a putative stockholder class action asserting a breach of fiduciary duty claim against the directors of a...more
On January 4, 2023, and again on March 1, 2023, Vice Chancellor Lori Will of the Delaware Court of Chancery denied motions to dismiss claims against directors and controlling shareholders of GigCapital-affiliated special...more
When a court reviews contested business transactions of a Delaware corporation, they typically rely on one of two standards of review: the “business judgment rule” or the “entire fairness standard.” The business judgment rule...more
On February 14, 2022, Vice Chancellor Lori W. Will of the Delaware Court of Chancery entered judgment in favor of Lee Enterprises, Inc. (the “Company”) and its directors following an expedited trial on claims for breach of...more
The decision adopts enhanced scrutiny of director fiduciary duties for de-SPAC transactions, but suggests dismissal may be appropriate when stockholders exercise redemption rights on a fully informed basis. On January 3,...more
On January 3, 2022, Vice Chancellor Lori W. Will of the Delaware Court of Chancery largely denied a motion to dismiss a putative class action brought by the stockholders of Churchill Capital Corp. III, a special purpose...more
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
In re HomeFed Corporation Stockholder Litigation, C.A. 2019-0592-AGB (Del. Ch. July 13, 2020) - This case illustrates that the Court of Chancery will apply the entire fairness standard to review a squeeze-out merger by a...more
On February 27, the Delaware Court of Chancery issued important guidance to boards of directors seeking to utilize special committees of disinterested and independent directors to insulate themselves from fiduciary liability...more
In the latest Delaware decision to expound MFW and the structuring of controller transactions, the Delaware Supreme Court clarified the requirement for a controlling stockholder to condition its offer “up front” on MFW’s dual...more
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
In a decision with potentially far-reaching implications for private equity sponsors and other controlling stockholders, the Delaware Court of Chancery expanded the potential for liability for foreign-based controllers by...more
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
Most directors and officers are aware of Section 144 of the Delaware General Corporation Law, which provides that a corporate transaction involving an interested director or officer is not void solely because of that reason,...more
Developments in appraisal law, the application of Corwin v. KKR Financial Holdings LLC in post-closing damages actions and the potential expansion of Kahn v. M&F Worldwide Corporation (MFW) — a case examining the standard of...more
In a recent decision, the Delaware Court of Chancery granted a motion to dismiss a complaint asserting breach of fiduciary duty claims arising out of a stock issuance proposed by a controlling stockholder. IRA Trust f/b/o...more
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
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 plaintiffs in In Re Volcano Corp. Stockholder Litigation were former public stockholders of a company that was acquired for $18 per share in an all-cash merger. Just five months prior, the target company had declined an...more
This issue focuses on important, developing areas of Delaware corporation law and deal litigation, including the Court of Chancery’s clarification of its evolving views about disclosure-based deal litigation settlements;...more
The Delaware Court of Chancery recently issued a trio of notable opinions involving stockholder derivative actions. The opinions addressed fundamental issues of law such as whether particular kinds of stockholder claims are...more
We are pleased to share with you the inaugural issue of Insights: The Delaware Edition, a periodic publication addressing significant Delaware deal litigation and corporation law developments. In This Issue: - Q&A...more