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Developments in Delaware Corporation Law | Skadden, Arps, Slate, Meagher & Flom LLP


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The Delaware Court of Chancery’s docket exploded with expedited “broken” deal litigation in 2020, driven by the impact of COVID-19. Beyond pandemic-related merger litigation, stockholder plaintiffs remained focused on claims involving controlling stockholders and increased focus on claims against officers for breaches of the duty of care. There were also significant developments in connection with stockholder statutory books-and-records requests.
Broken Deals
Transaction participants in 2020 faced extraordinary and unprecedented circumstances due to COVID-19. In addition to the crisis’ uncertain economic impact, many companies faced employee health concerns and government-mandated shutdowns of core business operations, among other things. (See “US M&A Outlook: Rebounding Market Fuels Optimism for Deal Activity in 2021.”) As merger parties grappled with the pandemic and its impact on pending deals, ....

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Recent MFW-Related Developments in Delaware Courts | Skadden, Arps, Slate, Meagher & Flom LLP


In 2014, the Delaware Supreme Court’s landmark
Kahn v. M&F Worldwide Corp.
MFW) decision established that the deferential business judgment standard of review could apply to controlling stockholder “squeeze-out” mergers under certain circumstances. Six necessary conditions must be satisfied for a transaction to obtain business judgment review under
MFW: (i) the transaction is conditioned
ab initio, or “from inception,” on the approval of a special committee and a majority-of-the-minority majority vote; (ii) the special committee is independent; (iii) the special committee is empowered to freely select its own advisers and to say no definitively; (iv) the special committee meets its duty of care in negotiating a fair price; (v) the vote of the minority is informed; and (vi) there is no coercion of the minority. ....

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