Litigation developments: core M&A and corporate governance doctrines
Compliance Perspectives: Due Diligence and Ultimate Beneficial Ownership (UBO)
In In re Match Group Deriv. Litig., the Delaware Supreme Court affirmed in part and reversed in part the lower court’s decision on the appropriate standard of review and the application of Kahn v. M & F Worldwide Corp., 88...more
On April 4, 2024, the Delaware Supreme Court issued a much-anticipated decision, In re Match Group Derivative Litigation (“In re Match Group”), extending the MFW doctrine more broadly to all conflicted controller...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 In re Match Group, Inc. Derivative Litigation, the Delaware Supreme Court held that the dual procedural protections announced in the seminal case of Kahn v. M & F Worldwide Corp. (MFW) are required in order to shift the...more
On April 4, 2024, the Delaware Supreme Court issued its opinion in In re Match Group, Inc. Derivative Litigation, clarifying that the heightened entire fairness standard of review applies to judicial review of any transaction...more
In a case with implications for companies with controlling stockholders, the Delaware Supreme Court held that the MWF Doctrine applies to any transaction involving a controlling shareholder receiving a non-ratable benefit,...more
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
On January 30, 2024, the Chancellor of the Delaware Court of Chancery struck down the $55.8 billion compensation plan that Tesla, Inc.’s board of directors had granted to Tesla’s well-known CEO, Elon Musk, finding that the...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
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
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 context of an M&A transaction, practitioners are routinely left to navigate the various standards of review that are applied by the Delaware courts to evaluate whether a Delaware corporation’s directors have complied...more
The Background: A shareholder challenged an extraordinary and extremely lucrative incentive-based compensation package awarded by Tesla to its chair, CEO, and controlling shareholder, claiming a breach of fiduciary duties. ...more
Corporate Governance and Securities Law Developments - Directors Can Be Held Liable for Failure to Oversee “Mission Critical” Regulatory Compliance - On October 1, the Delaware Court of Chancery refused to dismiss a...more
The Delaware Chancery Court rejected an attempt by Tesla’s Board of Directors to dismiss a challenge to CEO Elon Musk’s “extraordinary” 2018 compensation package. Because Musk is also Tesla’s controlling stockholder, the...more
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
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
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
In Olenik v. Lodzinski, the Delaware Supreme Court found that the conditions required for business judgment review of a controlling stockholder transaction under the MFW standard were not in place “at the outset” of the...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
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
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
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