Chancery Court Again Refuses Preliminary Dismissal due to Well-Pled Allegations that Sale Process Orchestrated by Target Company Fiduciary Failed To Satisfy Revlon Standards
Robert S. Reder & Victoria D. Selover | 74 Vand. L. Rev. En Banc 407 (2021) |
Several recent decisions of the Delaware Court of Chancery (“Chancery Court”) have considered the interplay between two iconic Delaware Supreme Court decisions rendered in the corporate sale context: Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986) (“Revlon”); and Corwin v. KKR Fin. Holdings LLC, 125 A.3d 304 (Del. 2015) (“Corwin”). In Revlon, the Delaware high court proclaimed that, “in the change-of-control context, the duty of loyalty requires ‘the maximization of the company’s value at a sale for the stockholders’ benefit’ ” (quoting Mindbody here and throughout the piece unless otherwise noted). The Revlon court also designated “enhanced scrutiny” as the applicable standard of review for claims questioning corporate fiduciary adherence to their so-called “Revlon duties” (quoting Kahn).
AUTHORS:
Robert S. Reder
Victoria D. Selover