News & Analysis as of

Minority Shareholders Business Judgment Rule

Cadwalader, Wickersham & Taft LLP

In re Oracle Corporation Derivative Litigation: Delaware Supreme Court Affirms Chancery Court Decision Not to Impose Fiduciary...

On January 21, 2025, the Delaware Supreme Court affirmed the Court of Chancery’s decision in In re Oracle Corp. Derivative Lit., finding that a less than 50% stockholder does not owe fiduciary duties absent evidence of either...more

Sheppard Mullin Richter & Hampton LLP

Delaware Supreme Court Holds Business Judgment Governs Decision to Reincorporate Outside of Delaware For Purpose of Reducing...

In Maffei v. Palkon, No. 125, 2024, 2025 Del. LEXIS 51 (Del. Feb. 4, 2025) (Valihura, J.), the Delaware Supreme Court held that a corporation’s decision to reincorporate in another state purportedly to reduce exposure to...more

Perkins Coie

When Is a Minority Stockholder a Controller? The Delaware Supreme Court Reaffirms the Ground Rules in In Re Oracle Derivative...

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Controlling stockholders owe fiduciary duties to other stockholders that minority stockholders do not. A holder of over 50% of a corporation’s voting power is clearly a controlling stockholder. As a consequence, transactions...more

Cooley LLP

Delaware Supreme Court applies MFW framework to other conflicted transactions

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In In re Match Group, Inc. Derivative Litigation, the Delaware Supreme Court answered some important questions about the standard of review applicable to conflicted transactions under Delaware law. The first question relates...more

Venable LLP

Fiduciary Liability Limitations Under Nevada Law Trigger Entire Fairness Review of Conversion from Delaware Due to Controlling...

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The Delaware Court of Chancery, in Palkon v. Maffei, et al., C.A. No. 2023-0449-JTL (Del. Ch. Feb. 20, 2024), determined that a reduction in the liability exposure of a fiduciary due to the conversion of a Delaware...more

Bodman

Shareholder Oppression Claims in Closely Held Michigan Corporations: A Powerful Remedy Against Abuses of Power

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Most institutions in our society make decisions upon the consent of the majority, from legislatures passing important bills to families deciding on what movie to watch on movie night. ...more

Davies Ward Phillips & Vineberg LLP

Canadian Mergers & Acquisitions: A Guide for Investment Banks, Bidders and Boards, 10th edition

Davies’ Canadian Mergers & Acquisitions guide draws on our substantial cross-border M&A experience to offer guidance on both the legal framework and practical aspects of Canadian mergers and acquisitions, including critical...more

Goodwin

A Win for Deal Certainty, Delaware Court of Chancery Orders Closing of Cake Supplier Acquisition

Goodwin on

A Win for Deal Certainty, Delaware Court of Chancery Orders Closing of Cake Supplier Acquisition; Under Armour to Pay $9M to Settle SEC Charges Involving Disclosure Failures; First Circuit Upholds Decision Applying Federal...more

Skadden, Arps, Slate, Meagher & Flom LLP

Recent MFW-Related Developments in Delaware Courts

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

Gray Reed

Controlling Shareholder’s Discussions with Minority Stockholders Results in Application of Entire Fairness Standard

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The Delaware Court of Chancery (the Court) in In re Homefed Corporation Stockholder Litigation chronicles a controlling stockholder’s failed attempt to use the protections outlined in Kahn v. M & F Worldwide Corp. (MFW) to...more

Cadwalader, Wickersham & Taft LLP

Delaware Court of Chancery Further Clarifies the “Ab Initio” Requirement in Finding That Discussions Between the Controlling...

In In re HomeFed Corp. Stockholder Litigation (“HomeFed”), the Delaware Court of Chancery considered on a motion to dismiss whether a squeeze-out merger by a controlling stockholder complied with the procedural framework set...more

Sheppard Mullin Richter & Hampton LLP

Board Guidance: Getting To Business Judgment Rule Deference When You Have A Controlling Stockholder

IN RE DELL TECHNOLOGIES INC. CLASS V STOCKHOLDERS LITIGATION There has been a growing deference in Delaware courts for transactions approved by independent special committees and minority stockholders. In the context of a...more

Fox Rothschild LLP

N.C. Business Court Declines To Adopt Rule That A Minority Shareholder Exercising “Actual Control” Could Have Fiduciary Duty To...

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The Business Court sorted through the drama of an affiliated outsider who wanted to buy a company, settled for half and became an insider, and then allegedly used that perch to benefit himself and his family in W. Avalon...more

White & Case LLP

Defying gravity: US M&A H1 2019: Three key M&A decisions from Delaware courts

White & Case LLP on

The first half of 2019 saw several decisions from the Delaware courts that will affect M&A dealmaking - Aruba: Supreme Court awards "deal price less synergies" in closely watched appraisal case - Rejecting the Chancery...more

Morris James LLP

Chancery Allows Claims to Proceed Against Stockholder Subjecting It to Entire Fairness Review

Morris James LLP on

An “allegation that a transaction involves a controlling stockholder who stands on both sides is a serious one because it imposes fiduciary duties on the controlling stockholder and potentially strips directors of the...more

Morris James LLP

Delaware Supreme Court Explains MFW’s Timing Requirement

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When challenged, transactions involving a corporation and its conflicted controlling stockholder invoke Delaware’s rigorous form of judicial scrutiny, known as entire fairness review. But not always. With the right...more

Skadden, Arps, Slate, Meagher & Flom LLP

Delaware Corporation Law: Trends Impacting M&A and Corporate Litigation in 2019

On February 20, 2019, Skadden held a webinar titled “2019 M&A and Corporate Litigation Trends.” The panelists were litigation partner and Delaware litigation practice leader Edward Micheletti and litigation counsel Jenness...more

White & Case LLP

Peak performance: US M&A in 2018: Deal changing decisions from Delaware

White & Case LLP on

In the second half of 2018, the Delaware courts once again produced decisions that will guide M&A transactions in the future. Three cases affecting US M&A stood out in 2018....more

Skadden, Arps, Slate, Meagher & Flom LLP

Skadden's 2019 Insights: Key Delaware Corporation Law Developments

The Delaware courts issued a number of significant decisions in 2018 that are likely to have ripple effects throughout 2019. Among them were a series of cases that further developed the parameters of the Corwin and MFW...more

Skadden, Arps, Slate, Meagher & Flom LLP

From the Get-Go: Interpreting MFW’s Ab Initio Requirement

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

Sheppard Mullin Richter & Hampton LLP

Getting to Business Judgment in an Interested Transaction: Controlling Stockholder Must Put Procedural Protections in Place Prior...

In Flood v. Synutra Int’l, Inc., No. 101, 2018, 2018 Del. LEXIS 460 (Del. Oct. 9, 2018), the Delaware Supreme Court (Strine, C.J.) held that a controlling stockholder who pursues a merger with the controlled company will have...more

Wilson Sonsini Goodrich & Rosati

New York Court Finds Failure to Meet MFW Standard in Controlling Stockholder Merger

In another significant M&A decision from the New York Supreme Court, the controlling stockholder of a Delaware corporation failed to obtain judicial deference under the so-called "MFW" framework for its merger with the...more

A&O Shearman

Who’s the Boss? Minority Stockholders That Exercise Control

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In two recent cases, the Delaware Court of Chancery provided informative guidance on when stockholders that hold less than 50% of a corporation’s stock are nevertheless considered to be controlling stockholders. This inquiry...more

A&O Shearman

Delaware Court Of Chancery Holds That Addition Of MFW Protections Following Initial Controller Proposal But Before Negotiations...

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On February 2, 2018, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery dismissed a stockholder challenge to the buyout of Synutra International Inc. (“Synutra”) in a squeeze-out merger by a controlling...more

Skadden, Arps, Slate, Meagher & Flom LLP

Court of Chancery Confirms MFW Applies to Controlled-Company Sale With Disparate Consideration

In 2014, the Delaware Supreme Court affirmed in Kahn v. M&F Worldwide Corp., 88 A.3d 635 (MFW II), that the business judgment rule would apply to controlling stockholder “squeeze-out” mergers if the transaction is conditioned...more

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