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Chancery Court Dismisses Revlon Claims Without Considering Directors’ Potential Corwin Defense

Posted by on Monday, January 25, 2021 in Delaware Corporate Law Bulletins, En Banc, Volume 74.

Robert S. Reder & Anna Choi | 74 Vand. L. Rev. En Banc 1 (2021) |

Essendant reinforces the heightened pleading standard a stockholder-plaintiff must overcome to survive a motion to dismiss its claims of directorial breach of fiduciary duty in the Revlon context. Absent well-pled facts challenging a board’s independence, disinterestedness, or good faith intent “to serve as anchor, [ ] conclusory allegations of domination and control drift over the falls.” Moreover, because Vice Chancellor Slights was comfortable dismissing the Plaintiffs’ complaint for failure to state a valid, non-exculpated claim—finding the preference for cash over stock to fall squarely within the Board’s business judgment—the Vice Chancellor had no need to consider the defendant-directors’ potential Corwin defense.

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Robert S. Reder and Anna Choi